We trade price breakouts. Detailed Guide.
- VFX Blog
- Strategies
Combining breakouts approach with vfxAlert can improve your trading experience. It's suitable for traders at any experience level.
Set up vfxAlert
Download the vfxAlert app to receive real-time signals, an indispensable part of any breakout trading strategy. The application generates CALL and PUT signals based on a large amount of historical and statistical data. We use it as additional confirmation of our strategy.
1. To start trading, connect with the broker platform through the application using a special form. We trade with the Pocket Option. However, the strategy has shown itself to be good on the platform of other brokers. We remind you that the vfxAlert signals work in any country and with any broker. To add a broker to the platform, read the instructions in this article.
2. Choose assets without additional hidden fees, amount and set up charts on the brokers platform.
Optimal timeframes for analysis range from M1 to M5. Increased analysis period usually correlates with higher signal accuracy over time.
Add technical indicators:
- The Bollinger Bands with default settings indicate levels where prices might change direction. The upper line has a potential resistance level, while the lower one acts as a support level.
- The 5-period and 20-period SMAs show the price trend.
3. Trading breakouts requires attention and moving fast to price changes. Open trades in one click on the broker's platform, we will use the quick button on the vfxAlert signals panel. To do this, set up the desired signal preset. In the screenshot below for filter settings.
Identifying Entry Points:
- Breakout Up (Call Option): When the price crosses above the upper BB and the short-term MA crosses down through the long-term.
- Breakout Down (Put Option): If the asset's price crosses below the lower BB and the short-term MA crosses down through the long-term one.
Recommendations for use
- Always ensure that your position size aligns with a predetermined percentage of your trading capital (e.g., no more than 2%).
- Exiting a breakout trade can be triggered when the price crosses the short-term moving average in the opposite direction, adhering to your breakout trading strategy.
- Always monitor news and events that may affect the market, especially when trading on short time frames.
- Breakouts strategy requires practice and discipline. Before using it on a real account, it is recommended to test it on a demo account.
Breakout approach is a popular trading strategy. With vfxAlert integration allows even a beginner to confidently find and open profitable options.