Online currency trading is now within reach of anyone who has a computer, an internet connection and a few hundred dollars and here we will outline a simple, timeless currency trading strategy anyone can make big profits with…
If you look at a currency trading chart you will notice currencies trend up or down and these trends can last for many weeks, months or in some instances years.
Now if you can lock into these trends and hold them, with leverage on your side you can make huge gains – so how do you do it?
Look at any currency trading chart and you will see that all the biggest trends start from breaks to new chart highs or lows and they continue from these as well, so if you want to make profits, you should buy or sell breaks of resistance or support.
Breakout trading works because when an important level of resistance or support breaks the odds favour a continuation of the move and the reason is obvious:
Stops are behind these levels and when they are hit traders exit the market pushing the price further away from the breakout point next, technical trading systems are triggered to enter and push the trend further and then the retail investor gets on board and helps the new trend continue.
Its logical and it works but you might be asking what is an important level of resistance or support? Generally, you are looking for a few tests ( a minimum of two) and the more the level has been tested the more important traders will view it. We normally look for six tests or more and when the level gives way, the odds are really in favour of the breakout continuing.
If a level breaks, use some momentum oscillators to confirm that the velocity of price is accelerating and this will increase the odds in your favour even more.
The above all sounds simple ,you may say so why don’t most traders do it?
Most traders simply cannot trade breakouts due to having the wrong mindset; they think they have missed the start of the move ( and of course they have) so they wait for the price to pullback, so they can get in at a better price but as we have seen, this simply doesn’t happen and the trader misses the opportunity.
Breakout trading is easy and the risk reward is excellent, as the stop is just behind the breakout point keeping risk small but the profit potential is huge as big breakouts can give massive returns.
If you are patient and trade the best breakouts and use a simple system, you can soon be piling up triple digit profits in under 30 minutes a day.
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