The forex market is a constant battle

[Tobi]

The forex market is a constant battle between bulls and bears. There is wise saying that “Bulls make money, bears makes money but pigs are slaughtered”. If we do not implement strategic trading considering all the risks, having proper money management and mastering own psychology then the result will be obvious. I often note that in ranging market, one particular strategy always works. It is called “False breakout strategy”. In this article, I will illustrate how I used this strategy. False breakout strategy is based on the major support and resistance levels.

Time Frame and Currency Pair

The false breakout strategy can be implemented in any time frame and any pairs, but for this example, I took 4 hours candlestick chart on USD/SEK currency pairs. This means that each candle on the chart represents 4 H of price movement.

Strategy Concept

In ranging market, the price often reverse after an attempt of false breakout around the resistance or the support levels. This happens because of the buyers and sellers are in hesitant state of mind at tricky levels. (Figure 1 equilibrium condition).

 

[magnus2022]

Forex like any other trading like cryptocurrency is highly unpredictable. Trading is very complex and is not for everybody. If you don't have the heart of long and craftiness of a wolf, you can't be able to make profit from trading forex.

 

[eLdavis]

This is precisely one of the reasons most people who go into forex trading do not succeed. They are not prepared for the battle that comes with forex trading.

 

[Suba]

As a forex trader, you should be able to profit from both uptrends and downtrends. Can the false breakout strategy applied at existing support and resistance levels also be applied to false breakouts during the consolidation phase?