A Forex trading strategy such as the ” Double Bottom Breakout ” can be considered one of the Common and most Proven Price Pattern in trading charts analysis.
With a ” Double Bottom Breakout ” pattern, the tendency of the breakout is mostly to the ” Upside “..
However, there are occasion whereby it reverse and plunge to the downside instead.
Therefore, not only is it important to learn how to recognize the so called ” Double Bottom Breakout “…
….but it is also critical to filter the possibility of a fake breakout too ( unless you don’t mind losing those precious profits…keke )
Read on as I would be showing you my method of filtering out the fake breakout for this forex trading strategy below..
Here’s a screen-shot for the Double Bottom Breakout of AUD/JPY to share :
Forex Double Bottom Breakout
As well as my ” Entry, SL & TP ” for the trade ( AUD/JPY ) :
Forex Doublt Bottom Breakout
By refering to the AUD/JPY price pattern above…
Having spotted the ” Double Bottom Breakout” pattern…
As usual….I do not enter a trade straight away but rather…..I WAIT for confirming indication.
( Like a clever hunter hiding discreetly & patiently for the animal to walk itself into the trap…keke )
For this trade of AUD/JPY, I intend to BUY ( or go LONG ) because it’s a Double Bottom…
Here’s how I filter fake breakout & spot for more confirmation signs - Before I enter my order :
1) I only entered my ‘ BUY ” order when the price has broke the previous 2/3 resistance at 58.85
2) Stop loss can be placed at 57.80 ( 105 Pips ) - relatively same zone.
3) Risk/Reward of 1: 2 achievable so I go ahead.
4) Prices shoot up in my direction ( my earnings also growing at the same time ….hehe )
5) Prices take a break and then formed a ” BULL FLAG ” ( which is a further confirmation for my BUY trade )
( If you miss the boat previously, this is a good entry point too….)
6) Prices continue to increase and BULL charging strongly upward till my TP hit at 61.10.
This trade netted me 220 Pips in total. ( although it went higher but it’s good enough for me …never be greedy ! )
Which is equivalent to about USD $2407.66 ( 1 standard lot )
Considering I am only using simple ” price pattern” formation for my analysis to enter the market..
Without using any complicated indicators or staring at the charts whole day to monitor at all…
Don’t you think price pattern is indeed a very powerful indicator anyone can use ?
Now ask yourself….( truthfully )
Are you currently using indicators such as 2 or even 3 Moving Averages + maybe Stochastic + maybe MACD…or others ?
Which makes the entire chart so messy and most of the time giving false signals during whipsaw…
Or maybe worst….
End of the day, the profits are either negative or merely break-even although you have lotsa indicators plotted on your charts..
As compared to just using what I called ” Profitable Price Pattern “……simple yet effective and it works..
Don’t you think you are more enlighten now ? Hehe…
I really hope by sharing my own forex trading strategy here..
It would help my readers or anyone still struggling to make real consistent profits succeed with forex trading too.
Remember…..it is really simple as long as you have a forex trading strategy that has 70 - 80% accuracy.
And combined with good money management rules…that’s about it.
ok so much for this post, I hope you like it and would also benefit greatly from it like I do.
Happy trading , Happy hunting and of cause…..More ” Explosive ” gains to you too !
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