Tag Archives: breakout

EUR/SEK: closed a winner yesterday

I had a winning trade in EURSEK that I opened last week and closed yesterday. The pair broke above the bearish trendline from last November and then pulled back. I entered long at Bar1 and took profit at Bar2. The entry was a simple breakout pullback trade while the exit was based on gut feeling after the price started to pullback after a wide ranging bullish bar.

EUR/GBP: winning trade

I entered long on a pullback against the underlying uptrend in EURGBP. The entry was at Bar1 after a bullish pin indicating the end of a pullback following the breakout from a broader correction from the 0.8976 top. The price reached my profit target with a strong gain today after BoE comments on bond purchases. Closed the long with a 154 pips gain at Bar2.

EUR/CHF: winning trade

I had a short trade in EURCHF after long inactive period as I tried to cool off and let my thoughts settle down.
The underlying trend is still bearish and I entered short at Bar1 on a pullback after the break of a corrective uptrend line. A bearish pin added strength to this signal. The price moved lower and hit my target at Bar2 at the prior price extreme at 1.2055.

EUR/SEK: trend breakout

EURSEK seems it has broken the 1d bearish trend

EUR/USD: extends upside

I missed the pullback in EURUSD from the 1.4240 top as I was reluctant to enter long for two reasons: First, the price is near the channel resistance of the current 4h uptrend. Secondly, the pair has moved too far out from the Keltner Channel which is my comfort zone to execute a trend following entry.

EUR/CHF: closed long aftermath

The EURCHF has stayed below my stop level for most of the Asian session then jumped 70 pips ahead of the European open. The low overnight was 44 pips away from my entry level which is more than the initial risk that I accept on my trades therefore I consider my stop being valid yesterday. I have re-drawn my trendline containing the pullback and now look to enter long on a pullback close to the prior highs near 1.2990.

Breakout Entry Techniques

I have found this article in the Nov, 2010 online issue of the Futures Magazine. Part of the article (on Page 2) explains the Breakout Pullback entry method which is crucial part of my trading strategy.

Basic breakout methods

The schematic “Breakout entry techniques” (right) depicts two different means of trading breakouts. Both are short entries. Entry one makes use of a sell stop market order with a price just outside (below) the breakout level. Some traders prefer this type of entry because it places them in the market when it moves in the direction of the breakout. However, it requires a somewhat larger initial stop-loss because of the breakout pullback phenomenon. Often, the trader will need to set an initial stop loss above the most recent swing high (labeled “A” in the schematic). Placing the initial stop just inside the breakout level (above it in the case of a short), puts the position at risk of being stopped out from normal market jitters.
Entry two in the schematic uses a sell limit order with a price determined to be at the maximum extent of the breakout pullback. In real-time, this level is not easy to determine. A 20-period EMA reference can be used or the trader can closely watch price action and when the market appears to have exhausted its pullback, a limit order entry can be placed close to the market.
The breakout pullback trade is attractive because the initial stop loss can be set just outside the entry price. This can be the previous swing high (“A”) or the 20-period EMA level.

Click here to read the full article on futuresmag.com

EUR/USD: long on breakout

I entered long in EURUSD on the breakout above the swing highs after the break of corretive trendline on the 15m chart.

Case study – pullback breakout setup

The attached EURUSD 1h chart shows a good example of a failed reversal. Bar1 broke the rising trendline then after a small pullback a Bearish Engulfing line at Bar2 has provided a sell signal. A stop-entry order below the low of Bar2 would enter short on the third bar after Bar2. The price however failed to break below the swing low after the trendline break and reversed to extend the upside. A stop-loss order placed above the top of Bar2 has to be placed to provide protection.
Even though the trade in this example would have resulted a loss (I did’t take it as it happened during the Asian trading hours), it demonstrates well how a trendline break supposed to be traded.
Some traders prefer a more conservative approach where the short would be entered below the dotted line which marks the swing low after the trend breakout. I think that it would not lower the number of losing trades as much as it would offset the higher risk due to the bigger distance from the stop-loss level.

EUR/USD: yesterday’s recap

I was playing the long side in EURUSD yesterday and entered three breakout pullback trades on the 5-minutes chart. All three was stopped out at the initial SL level. I have two notes:
1) I’ve violated the revenge rule by entering the third trade
2) The first trade was too early given the fact the on the 1h chart the price did not pull back into the Keltner channel.