Trend Following Breakout Strategy is strong
What is a Trend Following Breakout
Trend following is a pullback reversal strategy, but isn’t the mindset still contrarian here?
The image is to go with the trend following when it breaks the trendline
Remember it as something that goes long when the pullback completes successfully
I will explain using the Forex Factory method
Price Action Trading with Indicators! The Freebie System
This is a trend-following breakout trading strategy
Since I learned this strategy, I’ve re-confirmed that trend following can be advantageous
Basically, trend-following breakouts are best on around the 15-minute chart
On the 1-minute chart, the strategy tends to be weak due to the spread
Recently it often becomes a direct-break type, but even so, trend following on the 1-minute chart is not highly recommended
Because there are many false breaks
Ideally, draw the trend cleanly, but in reality it will be zigzagging
That's true, since the 1-minute chart is the shortest time frame
Prices on the 5-minute or 15-minute charts will be pulled up or down by the lower time frames
Therefore, the 1-minute chart gets pulled by these conditions, so its effectiveness as trend-following is limited
Best is the 5-minute chart
On the 15-minute chart, there are fewer signals
On the 5-minute chart, it may be suitable for those who want to trade a few times in a day
Also, in trend-following breakouts
Around 1:4 is the best
If you additionally enter frequently, it is best to take profits when the total profit is at least three times
In other words, adding entries also increases risk
So it is better to take profits while momentum is strong
If it doesn’t retrace and continues, that’s ideal, but most often it moves forward temporarily and then retraces, which can force risk and cause large losses
※ For those who want to keep earning from FX, click here ↓