Breakout is an event that occurs when the price is out of the price range of the traded asset in some time. Breakouts can also be used to refer to conditions when a certain price level passes, either at the resistance level, pivot points, support or Fibonacci, and the other. In fact, the breakout contrasts with the understanding of the trader having to sell when the price is high and buy when the price is low.
At breakout, trader will be advised to sell below support and buy above the resistance level. When trading in a breakout way, traders must enter the market immediately after the price is in a breakout condition and leave in an open position until the volality decreases.
In the development of market trend, in general people will race to be able to buy when prices rise. Because the breakout is done by waiting for the market to reach the resistance point then enter or buy above the breakout point. If the trend is bullish strong, the price will start moving to a higher point. Conversely, people will do a lot of sell when prices start to decline. Therefore, a sell position in this strategy is used by waiting for the market until it reaches a certain support position, then enter and sell below that point. If the bearish trend is strong enough, then the price will continue to decline to the lowest level.
Breakout strategy can be applied when the presence of a pretty strong trend coupled with the bustling market situation. A strong trend tends to get past the price. You can do this illustration like a person who has muscle and strong and then hit wood. Surely wood will be easily penetrated. Trend and market situation it is that has the potential to pass through the point of resistance and support.
In addition, we also have to find a trend that is considered strong before going to breakout, because this will give the probability of higher success. What you need to notice is that in trading we can not see how much volume on trading happens at one time. Quite different when trading futures or stock futures. Therefore traders who want to breakout must have criteria that can identify whether or not a good opportunity.
Guidelines for Using Breakout Strategies
Time Frame & Setting CCI Indicators
Use the H1 chart if you're a short-term trader. If you are used to long term, then the recommended time frame is D1.
CC indicator can be placed in period 20.
Half Trading Closed
Generally close half of trading is reducing the size of posisis when order is running. So, if you do open positions with 1 lot, then when you close half of trading means you are reducing 0.5 lots of trading size. This kind of action is usually done when the position on the trading has started to gain profit, but has not reached the target. Many think this is a rare decision of the traders who are afraid to get the loss, but actually not like that, because this strategy is considered important enough to be able to maintain the profit that can be achieved.
In addition to the above 2 strategies, you can also get other strategic information on the article 4 General Strategies For Active Trading Partners and Daily Trading Strategies for Beginner Traders.