Opportunity Lost in Forex Trading? Breakout Trading Tips
Have you recently faced any good profit-making Opportunity Lost in Forex Trading? When you entered the market, it was way higher or lower than expected? Forex Psychology is pretty different and complex from a normal business. The stress level is much higher as the decision made gets a faster response to profit and loss.
Sometimes we see many traders doing over trading and jumping on the trade which already lost the ground. Yes, exactly. Let’s say YESTERDAY’s AUDUSD D1 chart. A huge fall of over 70+ pips in a single day. Many traders become so irritated about missing those pips they open a sell position though the price has finished its journey to the support level. So, it can anytime shoot up or against your trade. The opportunity that is missed cannot be regained and that’s what we need to believe.
Opportunity Lost in Forex Trading?
source: forexop.com
Profit Loss that’s all named as a business. You don’t get any profit or loss if you are working in an organization. In that case, you are given a target to fulfill but in the case of Business that what really matters the most.
I personally suggest everyone not to trade on a missing opportunity or if you are really thinking that the trend will continue then please trade with a good breakout strategy. On the contrary, at least try to wait for a retracement before you continue with the trend. A good breakout strategy is not when you place a sell stop or buy stop at the near term or key level support or resistance. You need to provide a gap of some pips which is known as pips buffer.
For Example:- If the support is at 1.3700 then you should place the sell stop at 1.3690-1.3685. Because it will help you to save yourself from the fakes that the market makes. For breakout trading and any kind of professional trading always use an ECN broker cause some broker as I experienced with them. NON-ECN brokers take orders much earlier than the point to be reached. For example, if you are looking for a pending order at 1.3785 but the broker takes the trade at 1.3788 then it would not be appropriate for a breakout trading. This type of position laundering is done by the broker for the spread to match the point of a position opening. So for any kind of trading strategy where you might use pending order always go for a true ECN broker or an ECN account.
Understand the Market Context Before Breakout
source: chriskyle.com
if you are trading in the market for a while, you need to understand certain things before you predict any breakout. These things are very few in numbers but have a great impact. The elements are :
- Market Swing Squeeze
- Market Flow Variables (Impulsive or Corrective)
- Volume Accumulation or Distribution
- Price Volatility Rate
When a trader is looking at a key level and the price resides near the level, these elements need to double-check. In certain cases, if the breakout has already happened, we should not jump on the trade thinking that we are losing the opportunity. So, if a breakout of any key level or event level has already taken place, we should be looking forward to a retest from the key level which actually happens quite often. Get up to 25% discount on our Lifetime Membership based Training course with exclusive services FREE for lifetime. Join Today by click here.
Why Market Retests After a Breakout?
chart source: Tradingview.com – Follow us on Tradingview – Rocky Hasan
You might be asking if a market has broken out, why it will fall back to retest the same level? What is the logic here? The logic is simple, breaking a strong price level does indicate certain profit-making of the bulls or bears in the process. A strong break requires Market Swing Squeeze which means accumulation bullish or bearish trade orders. As the price volatility increase and volume accumulate or distribute impulsively beside a strong level that means the price has a greater chance to break above or below the level. Therefore, after the break, the price will retest the broken level again. Mainly to have further volumes and order accumulating for the upcoming trend continuation.
For instance, you can use any dynamic level indicator carry function to understand the squeeze and price volatility. There are also certain chart patterns like Pennant, Ascending or Descending Triangle to help you understand the squeeze in the price before a breakout. To learn advanced patterns and Pre-Breakout strategy, Join MFX University Advanced Trading Course today with a discounted price.
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