Aim for Breakouts!

Enter according to the rules when price breaks out of the range

Previously, we explained about the“range market”and its characteristics.

This time, we will look at the“breakout”where price moves out of that range.

What is a breakout?

It is when price breaches resistance or support lines that are monitored in range markets, etc.

If it breaks upward, movement may accelerate upward; if it breaks downward, movement may accelerate downward.

Strategies that aim for breakouts are popular because entry points are relatively easy to identify and they target large price moves after the breakout.

Enter after breaking the range

If you draw lines at the upper and lower limits of a range that has repeatedly been stopped, it becomes easier to判断 where the market will move once price breaks which side.

For example, when the price breaks above the upper line.

“Enter when the range upper limit is broken.”

If you decide this rule beforehand, the place to enter becomes clear.

Deciding “where to enter” in advance is crucial for breakouts

Breakout and “Tenda Trade Assist” pair well

When aiming for breakouts, the tricky part is“waiting for the moment of the break”.

Even if you can check a chart during a short morning window and decide, watching the chart continuously is tough.

During work, you might miss the entry timing if a breakout happens while you’re away from the chart.

So,“Tenda Trade Assist”allows you to preset entry, stop loss, and take profit lines.

If you set the entry line at the breakout point, you can be ready to enter at the breakout moment without watching the chart for long periods.

Most notably, the good thing about Tenda Trade Assist is that it’s easy to set up.

You can set it simply by moving lines on the chart, without entering precise numbers, making setup dramatically easier.

Here is the product page for “Tenda Trade Assist”

You can also check risk-reward

With Tenda Trade Assist, you can set risk-reward to1:1, 1:1.5, 1:2and other preferred values.

For example, when aiming for an upward breakout from the range,

Red = stop loss
Yellow = entry line
Green = take profit

This is how you set it up.

Centered on the yellow entry line, you can see the distances to stop loss and to take profit.

Setting a risk-reward moves the take profit line automatically to the corresponding position, so you can immediately see on the chart“how much risk versus reward you are targeting”at a glance.

You can set risk-reward to 1:1, 1:1.5, 1:2, etc., according to your rules.

Decide the rules in advance

“Find the range → Decide the breakout line → Set entry, stop loss, take profit”

If you monitor the chart more than necessary, you tend to enter in needless places.

Breakouts can have false signals where price looks like it’s breaking out but then reverses quickly.

That’s why it’s important to set your stop loss at the same time as entry.

So you can decide entry, stop loss, take profit in advance without staring at the chart.

That is what the tool“Tenda Trade Assist”is for.

Here is the product page for “Tenda Trade Assist”

Next time

Next time, we will go one step further and explain“Environmental recognition and time-frame analysis”.

Even on the same chart, the market can look different depending on the time frame you view.

Confirming the overall trend before entering isa very important point to avoid false signals.

Next, we will explain how to view the market with multiple time frames.

※This article explains the basic idea of trading using breakouts.