HOW TO ORDER

As you can see in the picture, the way to enter the order with a breakout strategy is very simple, when the price breakout and closes on the cloud of Kumo, then enter BUY; when the price breaks out and closes below the Kumo cloud it is on SELL.

However, you should be aware that many times will be blocked by the cloud, especially the clouds that go sideways, creating a fake breakout and your order will be hit stop loss. Therefore, to avoid this situation, you need to look for another tool to support your command, that tool could be the Chikou Span line or incorporate more resistance/support breakout close to the crowd. current cloud or looking for price force when breaking out of the Kumo.

WHEN DOES THE ORDER GET OUT

Exit with the Kumo breakout strategy is arguably the easiest in the trading process. Traders just need to wait for either hit stop loss or hit take profit.

HOW TO SET STOPLOSS

If trading in the breakout style of Kumo, the stop loss must be placed on the other side of the cloud. Specifically:

If the price breaks down to the Kumo, then place the stop loss above the cloud about 10-20 pips.

If the price breaks up to the Kumo, then place the stop loss below the cloud about 10-20 pips.

If the price touches this stop loss range, it is highly likely that the price has reversed.

HOW TO SET TAKE PROFIT

According to this strategy, we will utilize the power of the trend to maximize profits, so we will not take profits until there is a signal from the price action or the price pattern signals the end of the trend. and reversing.

The strategy part is finished, post the illustrations to let you understand more about this Kumo breakout strategy.


Let's analyze this case study together, with AUDUSD we see the price has dropped and cloud breakout at point A gives SELL signal. However, in case of a false breakout, we should consider whether the price is breaking the resistance/support at it, if so it is a plus point to enter.

We will enter a SELL order at point B when the next candle closes. Place the stop loss at point C 20 pips above the cloud.

At what point will the order be exited? Notice, when the trend ends, the price will breakout and go up to the Kumo cloud. Hence, we shall wait for the price reversal to close above the Kumo. Point D is the exit point that matches this criterion.

In short, in this case, the trader would wait for point A (cloud breakout), enter an order at B, place a stop loss at C, and take profit at D.