You can download this 4 Hour Breakout Trading System 22 page PDF FREE. This 4 Hour Breakout Trading System can be used on any currency pair. Trading breakouts can be highly lucrative. In simple terms, a breakout takes place when the price action suddenly changes direction and starts moving in the opposite direction with a massive momentum. In technical terms, a breakout takes place when price action breaks an established support or resistance with massive momentum. When trading stocks, we talk of the volume but since volume is not available when trading currencies we try to look at the momentum of the move. You can read more about trading breakouts in this Investopedia article. Though this Investopedia article talks about stocks but most of the things mentioned in it is relevant for the currency market as well. This is another good Babypips article on trading breakouts. As a trader, read a lot. Make this your habit. Education is the best trading tool. Below is a screenshot of our 4 Hour Breakout Trading System in action.
Now let’s get back to our 4 Hour Breakout Trading System. After reading the two articles, you know now that the problem in trading breakouts is that you can get chopped in a false breakout. The price makes a false move in one direction. You mistake it as a true breakout. When you make the entry to your horror, price reverses and hits your stop loss and then starts moving in the opposite direction. There are ways to filter out these false breakouts from the true breakouts. One is to trade the Trendline Break. The other is the look for a certain chart patterns that are considered to give a breakout advance warning such as the Double Top or the Double Bottom patterns. Identifying this Double Top or the Double Bottom correctly needs some practice. This PDF is going to show you how to correctly identify this chart pattern. A breakout on H4 timeframe can mean bagging in 200-500 pips and even more in one single trade.