Here we will look at the concept of following Forex price trading via charts and making huge FX gains with a simple and proven method. If you use the attached FX strategy, you will capture every major trend and profit, so let's look into it in more detail.
If you look at a chart of any currency pair, you will see big trends lasting for weeks on end, and these trends can make you an amazing profit if you know how to get into them. The good news is that the big trends start and continue in the same way – They break overhead resistance and then move higher, and it's called a breakout. If you deal with breakouts, you have a simple and powerful method that simply follows the price action and gets you up to date with all the major trends.
Of course, not every breach of resistance will see a new trend develop, and many will not follow. To make a profit, you need to know which breaks give you the best odds – before entering your trading signal.
The best breaks are those that occur after a level has been tested a few times and become significant to other traders. If a level has been tested a few times, dealers will want to resist and have their stop behind it. The more times the level is tested, the more groups are clustered just behind the resistance. When the break occurs, these stops are triggered and push the price away from the breakout point, then a new technical purchase comes, which pushes the price further away from the breakout point and a new trend is born.
As for the number of tests before the break, I like 4 – 6, and preferably I want 2 of these testicles to be at least one month apart. The breach, when it comes, is even better if most people think the currency should go the other way. The reason these breaks are better is simple – the vast majority of traders always lose money, and there are likely to be a lot of stops to hit as resistance gives way and brings these losers out of the market.
The simple method above will make money, and not only will it get you into all the major trends, allow you to trade just a couple of times a week and get triple digit gains. If you want to succeed in currency trading, there is no better method than breakout trading.