Breakout Strategy

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The way I trade breakouts is to first look for an area of resistance or support that has at least two touch points and when there is a break of this area I wait for a retest to enter.

I am wondering if it would be a possible strategy to trade simple breaks of structure and changes of character the same way. Instead of the condition of having two touch points, I would just find the swing point and use this as the support or resistance level, then wait for a break of structure or change of character and then the retest to enter. 

Thank you for any feedback!!

 
Yes that strategy would work.  Entering at the re-test is the safest and most profitable way to trade.  Can you define what you mean by waiting for a "Change in Character"?
 
Yes, retests or pullbacks are a cheaper way to enter the  market with a better reward to risk ratio even in a breakout strategy.
 

You can write it as an EA to test the effect.

 

When a Support and Resistance Line has been touched twice, its called a market zone, which price likely comes to bounce off, if it breaks that its a change of character, but also look for Lows which where not retested till their high where broken, these are where brokers did the so called Liquidity grab, if it breaks that low, it can also be a good change of character

 
Vijay Rajput #:

You can write it as an EA to test the effect.

Man i've been trying to write an EA based on Break and Re test, im not winning, any help?

 
Kandodo Index #:

Man i've been trying to write an EA based on Break and Re test, im not winning, any help?

search codebase. There is already many breakout eas and all of them with code that is already made so that you can modify it to suite your trading style.

 

At the retest, you must be breakeven already... After a long time implementing this, I figured out the best way is to get in immediately after the breakout, then move to breakeven after a few pips.

 
Khalid Ait #:

At the retest, you must be breakeven already... After a long time implementing this, I figured out the best way is to get in immediately after the breakout, then move to breakeven after a few pips.

What's the risk ratio of that kind of system?
 
Marcel:

The way I trade breakouts is to first look for an area of resistance or support that has at least two touch points and when there is a break of this area I wait for a retest to enter.

I am wondering if it would be a possible strategy to trade simple breaks of structure and changes of character the same way. Instead of the condition of having two touch points, I would just find the swing point and use this as the support or resistance level, then wait for a break of structure or change of character and then the retest to enter. 

Thank you for any feedback!!

Your proposed strategy of trading breaks of structure and changes of character by identifying swing points and waiting for a retest is a valid approach and aligns with the principles of breakout trading.


Using swing points as support or resistance levels is a common practice in technical analysis. These points often indicate areas where the market has shown a shift in direction, making them potentially significant levels for breakouts.


Trading breakouts on changes of structure or character can be effective. It allows you to capture shifts in market sentiment and trend direction. Look for patterns such as trendline breaks, chart patterns, or key price levels being breached.


Waiting for a retest after the initial breakout is a prudent approach. This can help confirm the validity of the breakout and provide a better entry point with improved risk-to-reward ratios.

 
My friend, it's a valid strategy proven by one of the best traders out there, his name is Richard Dennis where he bought whenever the price breakouts from the previous 20-days high and sold when the price breakouts from the previous 20-days low. Maybe you need to specify where you put your stoplosses + spread, and you need to be eager to enter more and more entry whenever you are proven right..
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