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.

Forex Trend Following - A Key Tool Most Traders Don't Use But Should

(by Sacha Tarkovsky)

If you want to catch the really big trends there is a key tool for FOREX Trend following that you should use.

If you use this tool then you will have a much better chance of catching and holding the really big trends that can yield the big profits of $10,000 or more.

So here it is:

It’s the weekly chart.

Most traders simply use daily charts but if you are after the big trends the weekly chart is essential.

Why?

Quite simply, because it gives you the big picture of the prevailing long term trend.

You can see the weekly charts on many free chart services

Keep in mind that the long term currency trends last months or even years, as they reflect the underlying health of the economy.

By looking at the weekly chart these trends are clear to see and you can then time your entry via the daily chart.

The best set ups for trading are when support and resistance line up on BOTH charts.

You know then that if they hold or if they are broken they are much more significant than simply points on the daily chart.

So the way to catch the really big trends is to do the following:

Look at the weekly chart for the long term trend, then time your entry on the daily chart by looking for important resistance or support.

Once this is done you need to time your entry.

Don’t simply trade on breaks or holding of support or resistance.

CONFIRMATION

Once you have lined up support and resistance on both the weekly and daily chart you need to watch price momentum.

You want price momentum to either be with you on a break of support or resistance i.e. strong momentum or if you are looking for these levels to hold you want to watch for weakening price momentum.

Use these indicators

1. The stochastic

2. RSI

They are great indicators and discussed in our other articles.

If you use them to see and trade with price momentum, the odds of your trade being successful are dramatically increased.

This METHOD

Will ensure you get in on all the big trends, with the odds on your side and help you make the really big profits.

FREE ESSENTIAL TRADER PDF'S AND MUCH MORE

On all aspects of becoming a profitable trader including features, downloads and some great FREE Trading PDF's visit our website at http://www.net-planet.org/index.html

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