Last Friday I entered long in EURGBP at Bar1 (4-hour chart). It was a breakout pullback entry. The breakout was from a bullish flag. This morning I moved the initial stop to the bottom of this morning’s bullish gap.
Tag Archives: entry
I re-entered the long in EURCHF on a bullish pin testing the 1.2990 level. Running a tight stop on this trade.
I entered long in EURCHF on a breakout pullback setup with a bullish engulfing line on the 15m chart.
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
I suffered a small loss on a long in EURUSD on a false bullish breakout. The usual mistake. I did not separate the signal bar from the entry bar and got trapped with an early entry. Entry was at Bar1 and got stopped out at the initial risk level at Bar2.