(by Sacha Tarkovsky)
The best trades very often tend to be the most uncomfortable.
Buying significant breakouts works, but you never get in at the bottom (and let’s face it we all want to buy low and sell high) but “buying high and selling higher” is much more profitable if, supported by price momentum.
Most novice traders hate doing this.
They miss the trade because they want to buy the bottom, then want to wait for the pullback to get in.
In most cases this does not yield an entry with the best risk to reward.
Most major moves start from market highs NOT market lows.
If you don’t grit your teeth and learn to buy them, you will simply miss out on most of the best trends.
When you have significant resistance broken and price momentum on your side the odds are very much in your favour if you enter the long side.
Sure, you miss some of the move but odds are the move will continue when important resistance is broken.
By not predicting and acting on confirmation, you will enjoy some great profits with breakouts.
So how far will the pound go up?
No one knows or can predict, so look at the charts and look for clues.
The pound could drop when the RSI peaks and the stochastic lines cross to the downside and point down with bearish divergence.
These indicators are great for getting into trades and their both great indicators to take profit with as well.
Watch them closely and act on confirmation.
Trading online FOREX is all about getting the odds in your favour.
If you trade important breaks of resistance and support with price momentum on your side, you will make some great profits.
If you read my articles regularly you will know we give live trade set ups for you to look at and tools you can apply to spot and enter trades in live situations.
The British Pound set up worked well and a great profit has unfolded, but there is an important lesson I wanted to share with you here.
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