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Forex Breakout Trading Strategy (MUST TRY!)

I have the most explosive Forex breakout trading strategy that you’ve ever seen. If you want to risk 1% to win 4%, 5%, even 8% on a single trade, then you’re going to want to watch this.

My top analyst uncovered this hidden gem and ever since all I’ve been doing is back-testing it and live trading it. All this strategy uses is the daily open and one moving average. 

I’m Pat, this is trade with Pat. Now let me give you this strategy Absolutely free. Maybe toss me a like or a subscribe. Let’s go. 

Forex Breakout Trading Strategy

All right. Let’s get into this. The point of this strategy is to take advantage of the daily open. You can see this is a daily open here. This is a daily open here. I’m talking about the green line. The green line, the red line, these are all daily opens. The point of the strategy is to take advantage of these breakouts that come shortly after the daily open, because what’s happening here is that there’s a bunch of people rushing into the market to place their trades at the daily open. So, you have the market getting pushed up or in some cases pushed down at this exact moment. 

So, after we have the daily open here, we want to see the price come up and then retest this zone. This is our area of value. You can see it as retesting both the moving average and the daily open, which is a great entry opportunity for us.

In this case, I would put a trade at this level right here, and we would take advantage of this area of value for something like a two and a half risk reward ratio win. You can clearly see the power of this strategy. So come, set your timeframe to H1, select your indicators. So, what we want to install is the moving average, simple, just click on that right there.

Then after that, we want to install the daily open by Tvdaz, just click on that right there.

After that the daily open stays the same, but the moving average, we just want to change the length of that to a 20-period moving average. That’s what works best with this strategy. Now that you have the indicator installed. Let’s take a look at some trade examples here. 

Breakout Strategy Example #1

Okay. So, for the first example, I started to use this daily open right here and this moving average right here. Generally, what I want to happen is have the price come off of the daily open Like we see here and then come back and retest the daily open here. This didn’t happen in this case, but it did retest my moving average right here. So, I felt like that was a good position for my area of value. So that is where I set my trade to start. 

I also have a bullish hammer candle right here. You can see the price was being pushed up by the buyers. So, I felt like that was another confluence telling me that this was going to be a solid buy opportunity.

So, I had the price come off of the daily open, retest my moving average. And then I placed this trade, and it went 150 pips for a 4.81 risk reward ratio. But now you’re probably asking, what am I doing with my stop loss? What am I doing with my take profit? I’ll tell you that right now. So, for my stop loss, I just set it below this recent swing low here, which means I had a stop loss of around 31.2 pips. As for my take profit, I’m setting my take profit based on the support and resistance zones. 

If I go onto the four-hour timeframe, we can take a look here. I see that this zone is tested a couple of times. This is essentially the top, which is why I have it as my resistance zone. Now, before I leave this trade example, I also want to show you that I did use a trend line right here to determine if there was a break in structure. You can see I had the break in structure right here. I had a retest of the moving average. I had the bullish hammer; all of these things were my conditions telling me that this was a positive trade. Obviously, it doesn’t always work this well, but let me move on to the next example as I really been crushing the USD CAD for the last couple of weeks using this strategy.

Breakout Strategy Example #2

So, for my second example, you can see here, we have our daily open, the daily open comes back, retest the moving average comes back, test the moving average and the daily open. So, this is an excellent opportunity rate here. You can also see this wick rate here is telling us that we have a lot of selling pressure. So, I placed my trade right here, and this was a solid, solid win worth 4.35 risk reward ratio. We’re talking about 81 pips. 

The reason I targeted this area right here with my take profit is because this is my resistance area. If I go to the four-hour timeframe, you can see this zone was tested many, many times making it a very strong area of support and resistance. This is why I use this area right here for my target profit. 

Back on the H1 timeframe, you can see my stop loss right here. It is just set above the moving average at this level. I also could have put my stop loss above these wicks right here, but I felt like the 18.6 pips was enough room for this trade to take place. The whole point of the breakout is taking advantage of these huge swings of momentum when there’s tons of sellers or buyers coming into the market at this daily open.

So, if we lose the trade, we’re probably going to swing right up, lose the trade really quick. So, I’d rather just lose a small stop loss and have a big risk reward on a breakout trading strategy like this.

Breakout Strategy Example #3

All right let’s swing over to the next trade opportunity right now. You can see right here that this is a ranging area, so I’m not trading any of these. You can see the moving average stays within the middle. So, there’s no real opportunities during this zone. So, I wait for my next opportunity over here. So, for this trade, you can see, I have my daily open right here. I have my moving average right here. The price came down and I triggered my trade opportunity somewhere around here.

So, the trade did go against me a little bit at first but did not trigger my stop loss. And then the market did continue into my direction. The price tested the moving average right here a couple of times before breaking right down, testing the moving average, and breaking right down and hitting my target profit right here.

I could have set my target profit at this zone right here, because this was my next support level, but I didn’t feel that confident in this support level, because as I scroll back, there just wasn’t a lot of action at the support level other than right here. So, I put it a bit safe banking, 149 pips for a 5.24 risk reward ratio.

Breakout Strategy Example #4

Let’s move into the next trade as I keep showing you this strategy, obviously it’s not always going to work this well, but I really love this strategy. This is excellent. Let’s move into the next trade opportunity. 

So, you may be asking why I didn’t take this trade right here. You can see, we have our daily open. We get the price come up and then retest the daily open. And that would have been a good trade opportunity. In this case, we broke below the moving average right here, and we had a strong resistance zone right here. So, I wasn’t sure if we were going to break through this area. So, I just waited for the next trade. This next trade was much more obvious, right? We have our daily open right here. 

We have the price come back retest it once, retest it twice, retest it three times. So, this was a solid opportunity. At this point, I went in on the trade right here. Another important confluence here is this area was a solid support and resistance area that was tested over and over and over again. So, it was showing even more strength.

So, this was the trade that I placed. You can see here. This thing ended up banking 8.8, we’re talking 8.8 risk reward ratio. That’s 183 pips. And I only risk 20 pips to get that, which is absolutely insane. This trade did go in my direction here. At what point it did break through the mad moving average, and I was a bit worried, but I already had my stop loss at the breakeven point. So, I figured if I was going to lose this trade, it would come up, I’d lose this trade. So, I just hung onto it. And it was a good thing that I did because it was just retesting this level before breaking back below this moving average right here, testing this moving average, going again, testing the moving average again before hitting my take profit and this trade was serious. It kept going on. You can see right here; it actually gets to my next support level. So, I could have taken profit right here, but hey, let’s not get greedy here, 8.8 is fantastic. 

Breakout Strategy Example #5

So now let’s move on even more. I’ve got another example to show you, so let’s move on even more. First, let me show you. I didn’t take any of these trades. You could see, we are tight to the moving average. We are in a range, right? I’m not trading this range. There’s no breakout out of this range. So, I’m just not trading that. This last example I want to show you is actually awesome because I came across this example while I was making the video.

We have our daily open right here, the price comes up. And it comes back to retest. It doesn’t make it all the way to the daily open, but it does retest right here at our moving average. We also have a flag pattern right here, which is another good indication that we’re going to break out at this level. I was able to get even more on this trade because I’m using my original strategy, which is just using the daily open, having the price come up and then retesting the daily open or the moving average, before I get into the trade. 

On this trade, I bank myself 133 pips for a risk reward ratio of 5.96. Obviously, guys, this strategy, isn’t always going to work this well. It is a fantastic strategy. I believe in it. I think you need to take it to a back test. Maybe take it to a demo test. And then after that, take it to your life account. Let me know how it works for you. I love this strategy.

Conclusion

I’ll probably do a full live trading account video on this in a couple of weeks. This is a fantastic breakout trading strategy. If you have any questions about the strategy, leave those questions below. Please subscribe to the channel, leave a like, watch this next video to learn how to become a better trader. And thanks so much for watching this video guys. I love you. I’m out of here. Trade with pat. Peace.

About Patrick Ryan

Patrick is a Forex enthusiast, with over 10 years of experience in finance, and market analysis. He's eager to help traders achieve their investment goals, whether they are short or long-term. Patrick's penned thousands of reviews, and is always available to discuss trading with anyone who's interested.

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