Day Trading - When Should You Trade Forex Breakouts?

Day trading is very popular with a lot of forex traders because you can bank profits in a short space of time, and you do not have any sleepless nights because all of your trades are closed out before the end of the day. One of the most popular ways of generating these profits is by trading forex breakouts. So in this post I want to discuss the best time of the day to trade these breakouts.

The fact is that if you are based in the US or certain other countries, you may well find that the markets have already moved an awful lot before the US market has even opened. So a lot of time it will not be possible to trade any breakouts if that is the case.

If you are based in Europe, however, it is a lot easier to profit from these breakouts because many of them occur during the first few hours of the European trading session. You often have a quiet overnight period when the major pairs such as the GBP/USD and the EUR/USD barely move, and then a surge in volatility when the European markets open.

This is when you often get the big price moves that set the tone for the rest of the day. So the key to profiting from these breakouts is to wait until you get an overnight trading range that is very low, and then enter a position as soon as the price breaks out of this range. This will nearly always be after the London and European markets open, and you can often bank an easy 20 or 30 points.

Of course you may not be able to do this on every major pair every single day because sometimes the price will have moved a lot overnight. So any subsequent breakout that occurs may not move that much and you may have to take a loss.

Anyway the point is that with all things being considered, the best time of the day to trade intraday forex breakouts is generally during the first few hours of the European trading session. If you are not available to trade during this time, then you will probably want to abandon the idea of trading breakouts and concentrate on finding another type of trading strategy instead.