Test Breakout Trading Strategy FROME FX ACCURATE
About Test Breakout Trading Strategy FROME FX ACCURATE
A test break can be a very high probability trading setup when you have mastered it and play it at the best areas.
The test break occurs when price looks to breakout of a support or resistance level, but then quickly snaps back in the other direction, false breaking a large portion of the market out.
When the first breakout begins price is looking to break out and through a support or resistance. In this example, we will say the price is looking to break out and through a resistance level.
When price begins to breakout higher a large portion of the market begin to look for the resistance to break and will enter long trades, often setting their stop loss just on the other side of the resistance.
When price begins to move back lower, the market participants who were long and looking for the resistance to break begin to get stopped out of their long trades. As price gains momentum back lower more and more stops are eaten and price completes the test break.
The test break trading strategy opens a lot of potential high probability trading opportunities for you because it can be used on many different markets, many time frames and can be used at the major support and resistance levels.
Do you often get faked out of the market or enter a trade just to watch it quickly turn into a test breakout?
Sometimes that is unavoidable, but often there is a price action clue and a footprint of where the price is about to make it’s very next move if we know where to look and what to look for.
In this lesson, I am going to show you what ‘price action footprints’ you should be looking for, and why the test breakout is so powerful when you know how to use it correctly. When price first starts it’s a break in this example lower through the support, a large majority of the market starts jumping on board to go short and to go with the breakout lower.
As a scalper, you are looking to get in and out of your trades quickly and profit from smaller moves in the price action.
Whilst you are looking to make far smaller pip targets, you are looking to do it in far shorter amounts of time than other strategies.
As a scalper, you are capitalizing on the bigger market volatility and quick price movements to make your profits.
A swing trader is looking to enter trades on the 4 hour or daily charts and then hold those trades for hours or days. When scalping you are generally holding your trades for minutes at a time, depending on how small the time frame.
Some traders love scalping as it offers them more potential trading opportunities, they do not have to hold for extended periods and they can close their trades and finish for the session.
Below I have included an example 5 minute chart showing price testing a key level and then forming a huge false break pin bar reversal to get short.
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