5 Types of Forex Breakout Trading Strategies That Work

How I use Volatility to my advantage (UK US open, late US etc)

[Only applies to M30 and lower]
What is volatility?
Volatility is the degree of variation in price of a given asset on a defined timeframe. When price moves quickly, market volatility increases. When price consolidates, market volatility decreases (simple definition). It is like the speedometer in our cars.
I usually add an Average True Range (ATR) on my charts to gauge approximately market volatility or market nervousness. However, it is not necessary, when you look at a chart you are able to tell if price is spiking, trending or consolidating.
Volatility is part of any strategy. It gives an expectancy toward future price action. In general, when market volatility is low, we expect significant support and resistance levels to hold price in a range. And when market volatility is high, we expect price to break these levels.
Volatility patterns
Fortunately, in the Forex market, daily volatility is predictable. We tend to see volatility peaks around major markets openings, which are the New York Stock Exchange (NYSE), the London Stock Exchange (LSE) and the Japanese Exchange. At the late hours of these markets, volatility tends to decrease.
These fundamental patterns are the most exploitable patterns in the Forex market. Yes, at least more exploitable than deceitful technical signals you are looking for. And they happen almost every day. However, there are exceptions. For example, we do not expect volatility peak to happen when countries of these big markets are on bank holiday.
EURUSD hourly volatility
The chart above shows the 4-weeks hourly volatility for the EUUSD pair. It is the average in pip of the difference between the highest and the lowest price of each hour of the day, over four weeks. Each bar represents the average in hourly range over four weeks.
There are two major peaks corresponding to the LSE and the NYSE openings.
Since the EUUSD is the most traded pair, we consider its volatility as "market volatility". In fact, the hourly volatility chart of the other pairs gives approximately the same pattern.
USDCAD hourly volatility
These charts were taken in May 2016. Take a look at Mataf.net’s volatility tool and type four (for four weeks) in the entry box. You will see approximately this same pattern in hourly volatility, with the two major peaks (UK and US opens) and decreasing volatility starting from the mid-US session. (Currently the pattern is disturbed by the brexit monster volatility, it will become clear again within few weeks)
We also have decreased volatility during the Asian session when there is no major news release coming from the Reserve Bank of Australia (RBA) or the Bank Of Japan (BOJ).
Asian sessions
These charts tell us market volatility is predictable. This leads us to define two principles:
First Principle: Around major markets openings (active time), market volatility tends to surge. We expect to see range breakouts, spikes or rallies. It is the best time to trade breakouts i.e., buying new highs and selling new lows.
Second Principle: During the late hours of major markets sessions and when major markets are closed (quiet time), market volatility tends to decrease considerably. We expect to see trading range or congestion in price action. It is the best time to range-trade i.e., buying the lows and selling the highs.
Any trading strategy or system has to adapt to these variations in volatility to perform over time. If you are struggling with a particular strategy, maybe you are ignoring these changes in volatility.
How volatility patterns can help in improving your trading?
One cannot apply a strategy any time and expect to be profitable. When we simulate an automated and intraday trading system over three months without time filtering, we will notice the system is only profitable at certain hours of the day. This simply reflects intraday volatility variations.
You have to determine if your trading strategy is a trend following method or a range trading one.
If your strategy is a trend following approach, you will want to only trade around major markets openings to maximize profits. Otherwise, you will tend to give back profits as price slows down in the mid-session and market volatility decrease.
If your strategy is a range trading or reversal approach, you will want to only trade during quiet market time and avoid trading around market openings or around news releases.
Less trades maximize profits. Most of my trading sessions last less than one hour.
I made a portable document of this.
submitted by alm_hd to Forex [link] [comments]

I TESTED London Breakout Strategy 100 TIMES with $100 ... successful trading with congestion and breakout How to use 123 swing trading system - Best Breakout forex ... Forex Chart Setup and Simple London Breakout Patterns ... Why and How to trade the Forex breakout strategy! - YouTube Forex trading strategy: Breakout - Stop - Continuation How To Trade Breakouts Strategy for beginners Forex ...

Congestion Breakout Trading System / Strategy. Time Frame : 15 minutes and above. Indicators used in Congestion Breakout Trading System. CongestionBreakOutV2; CCI; ADX (Average Directional Movement Index) Buy (Long) Entry: When Price close above the upper band, CCI > 125 and ADX > 25. Stop Loss : Opposite Band. Take Profit : Open. Sell (Short) Entry: When Price close below the Lower band, CCI ... EMA MACD Congestion Breakout Forex Trading Strategy. Congestion zones are a good source of potential breakout trades. The market is composed of two phases – expansion and contraction. Congestions are a type of contraction where instead of retracing from a trend, the market starts to have a narrow range where price tends to stay within for a while. Congestions are the kind of market condition ... The congestion breakout strategy is a trading system based on Congestion Breakout indicator filtered by ADX indicator and CCI indicator. This works on a 15-minute or higher timeframe that can be used in all currency pairs. MT4 Indicators: Congestion Breakout; CCI (14) ADX With D+and D-. Long Entry: When price close above the upper band ,CCI>125 and ADX>25. Short Entry: When price close below ... Consolidation Breakout Zones Forex Strategy. The consolidation breakout forex strategy uses the Breakout-zones.ex4 indicator to identify price breakouts. Breakouts are areas where the price action has left the boundaries of consolidation to find new price direction. Areas of consolidation are found where the price is basically heading sideways, with highs and lows located at the same ... Congestion Breakout is a trading system based on Congestion Breakout indicator filtered by ADX indicator and CCI indicator Time Frame 15 or Higher Pair:All Related Posts FTLR Trading System BMANS Renko System Trading System Forex Moon Get E-Book Worth $100 for Free!!! Download Now Indicators: Congestion Breakout; CCI (14) ADX With D+and D-. A forex trader must choose the indicators that fit his or her trading strategy. How to install Forex Congestion Breakout Trading System? Download Forex Congestion Breakout Trading System.zip; Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators / Copy tpl file (Template) to your Metatrader Directory / templates / Start or restart your Metatrader Client; Select Chart and ... Congestion Breakout is a trading system based on Congestion Breakout indicator. Free Forex Strategies, Forex indicators, forex resources and free forex forecast ...

[index] [7493] [11161] [17642] [28293] [27493] [16243] [29541] [24226] [2375] [13759]

I TESTED London Breakout Strategy 100 TIMES with $100 ...

How to use 123 swing trading system - Best Breakout forex trading strategy \\\\\ The 123 Forex trading strategy is base... How To Trade Breakouts, Strategy for beginners about Forex trading, how to trade profitably using a strategy of breakout at the level of supply and demand (s... in this video there is the description of congestion and breakout and its success and applicability on any time frame #LondonBreakoutTrading Forex Chart Setup and Simple London Breakout Patterns. Overview of my basic chart setup, and the importance of understanding some simp... SUBSCRIBE TO OUR CHANNEL👉 https://bit.ly/33CIPND Facebook Group👉 https://bit.ly/34vfnJC Telegram Channel👉https://bit.ly/34qO2bH Support our channel (Merchand... Forex Trading Strategy: Breakout - Congestion - Continuation http://www.LearnForexLive.com Learn a breakout strategy here: https://bit.ly/2MOBkqR Why and how to trade a Forex breakout strategy is a commonly asked question by my students at Forex Si...