Trading Rules and Tips for the Breakout Method

MOST of these rules are common sense rules but some come from experience.

*Trade only when there is an opportunity to trade not just to be trading. Even if it takes you two weeks or longer for an opportunity to come to trade you must follow this rule. Otherwise you risk getting yourself into unprofitable trades.

*Avoid trading in sideways channel (ranging market) with this method. Wait until the market decides if it's going to go up or down.

*Aim for a monthly goal instead of a weekly goal in terms of getting pips. Sometimes the market just doesn't have enough volume to give you enough trades during one week but may skyrocket the next week. I estimate since I personally target 400 pips minimum per month, it would work out to 100 pips per week.

*Adjust your trading to the momentum of the market. Momentum is best on GBP/JPY during the first four hours of the London session but you can get good moves during the Asian session at open and U.S. at open sometimes too. If you can, shoot for the London session or set alarms.

*Do NOT trade 30 min before, during and 30 min after big news announcements like NFP and some of the other major releases especially the U.S. releases. The market could easily move against you hundreds of pips in seconds. This has happened to me !

*Never take a premature trade. If the price is coming close to the S/R line, do not jump in assuming that it's going to break the line. It may bounce and hit your S/L. Let the price move through the S/R line a few pips then place your trade.

*The longer that a trend has been in place and it is broken, the harder the fall or the higher it will climb. Adjust your profit targets to the momentum of the market.

*Trading is 90% discipline and 10% execution.

*Plan your trade and trade your plan. Don't trade emotionally and hope that the market will go your direction. Been there, done that and it doesn't work.

*If your broker stop hunts then add 10 pips plus the amount of the spread to your original stops.

*At times my S/L will be 10 to 20 pips more than my T/P because I place my stops one S/R behind. My stops are hit only 2 out of 10 of my trades so this works well for me. Keep in mind the hedging strategy discussed in the 2nd post. If you don't feel comfortable with the amount of S/L use 50 pips as a basis but remember you don't want to set your S/L so close to the entry that it is hit. Give it some room to move.


This is the basis of my method. I will make live posts of when I'm in and when I exit the market. I like to see price action before I enter trades but I do set limit orders for when I sleep or other times when I'm away from my computer. With my method and any other method, test it out on a demo to see if this style is for you. I'm not responsible for anyone's losses. So anyone taking my live trades, it's at your own risk.