Breakout trading is a very interesting trading style, Breakout traders will rely on the market's accumulated breakout momentum to make a profit. Breakout trading can be said to be one of the smartest methods, because if you guess correctly, you will be profitable immediately after entering the order. However, not all Breakout systems win the market, they all have conditions that need to be met.

Breakout System - 1: Trade Breakout follows the trend

When trading Breakout Following trend, brothers will definitely increase the probability of winning immediately.

Simply because during a trend, the breakout will usually continue that trend, and only 1-time breakout price to break an existing trend and reverse to a new trend. The probability of the brothers getting a breakout reversal is low.

For example:


The trends that have been established will continue for a long period of time, while the long period of the trend can be profitable if following the trend.


Breakout System - 2: Look for signs of strength - weakness

You will want to look for signs of - strength - before entering an upside Breakout, and a - weakness, before entering a Down order.

On the contrary, if you want to look for signs of weakness, you will want to see the low peaks gradually squeezing down a descending triangle, or when the price is stuck above the support without rebounding (called buildup):


Conversely, if you want to look for signs of weakness, you will want to see the low peaks gradually squeeze down a descending triangle, or when the price is stuck above the support without rebounding (call is buildup):



Breakout System - 3: Avoid entering the price zone of the overwhelming support/resistance

We will always find the roads with the fewest cars to get to the house early, even if the total distance is a little bit farther but if there is no traffic jam, we will get home earlier.

In Breakout trading too, you want the price to break and go as you please and with the least resistance. There will be areas on the chart where if the order is entered, the opposite pressure from the surrounding supportive resistances will hinder the price and not go as expected.

For example:


Buy on a breakout upward, but will immediately meet resistance, which is the previous highest high on the upside path.

For example:


Sell when the breakout falls below, and below there is virtually no support and the low is very far away. This is a more favorable sell order.

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