Forex Breakout System

A Forex Breakout System is a strategy that relies on exceeding various technical analysis formation boundaries.

Technical Analysis is used to identify trading boundaries.  These boundaries usually form chart patterns like Channels, Triangles, Wedges, Pennants, and Flags.  When prices exceed those boundaries, or breaks out of the boundaries, price action usually continues in the direction of the preceding tend depending on the chart formation and the situation. 

Forex Breakout Systems rely on price action which make them very reliable, stable, and some of the best forex trading systems out in the market.  Forex Breakouts are easy to learn however it is recommended that new forex traders learn through experienced traders so that the nuances of each trading patter can be revealed and the trader learns the correct techniques of how to trade the forex patterns.

The following examples should provide a great start for learning how to perform technical analysis using breakout patterns.

Flag Breakout

The flag is one of the most predominant occurrences in charting, and happen regularly during trends.  The breakout of a flag is typically a low risk buying opportunity as it typically follows a pull back in a trend, either up or down. 

Triangle Breakout

The triangle is another very common formation that represents a very similar market sentiment as the flag.  This formation occurs at price swings back to levels where resistance is hit and then swings back to price levels where support is found.  These levels operate within a bound range that narrows with time.  My favorite analogy to this type of movement that my students are very aware of is "coiling the spring."  Here you can see that energy is penned up inside of a cage, that energy is building and then can break out of the cage.  This is the constant struggle between the bulls and the bears.  The bulls are taking a break while the bears are testing the waters so to speak.  When the bulls regain strength they are able to overcome (break out of the bull pen), and run the bears off.  Typically the breakout occurs in the same direction as the preceding trend.  The following is an example of a bull triangle breakout, and more specifically an ascending bullish triangle breakout. 

A Warning To Protect YOU!!!

I have found many, many, free online training programs out there, and just general information.  It seams that everyone out there is trying to make a buck.  There are very clear differences between formations, but you must have the correct knowledge in order to distinguish between the differences.  I have seen online teachings of flags, pennants, wedges, and triangles that are NOT CORRECT.  I want to make something very clear!  Not everyone offering this information are true professionals.  Many explanations online are completely WRONG or not efficient enough to protect you from the common mistakes of using the analysis wrong.  This is not child's play.  This affects real life, and should be taken seriously.  Most professional traders are not going to spend the time to share with you the secrets of this industry for free, they make more money really trading and teaching anyone else increases their competition, plain and simple.  Look at what these internet guys are doing to generate revenue, do they have advertisements on their site?  Are they referring other products for commissions?

There should be a clear indication of why they are doing this.  I will tell you why I am doing this:  I'm selling a course and want you to take it.  I know you are going to look around and evaluate various trading courses, so in the mean time I'm going to teach you some basics and hope that you take hold of the correct analysis teachings.