What is a Breakout

If you are quite new in Forex trading, then it is the perfect time to learn some forex trading terminologies that you should understand to refine your trading strategies and increase your profitability in Forex Trading. In this article, we will discuss what “Breakouts” are, how to identify them, and how to act when you see one.

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A breakout is a movement in price through an identified support and resistance, then followed by heavy volume and increased volatility. The most common reaction of the traders when the price breaks above the resistance level is to buy, and they do the opposite when it breaks below the level of support.

Practically, a breakout is a term used to refer to a situation where the price breaches above the level of resistance and goes higher, rather than breaching the level of support and going lower. Once the resistance level is breached, it is identified as the next level of support when the security experiences a pullback.

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Most traders use chart patterns and other technical tools like for example, trendlines to pinpoint the securities that have the most possibility to break through a support/resistance level. To sum it all up, a breakout is the bullish counterpart of a “breakdown”.

Learn more about the forex market and further refine your strategies in forex trading by regularly reading our Forex blogs. See who the best forex brokers are, visit Wibestbroker.com to find out!

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What is Automated Trading System

 

In the forex market, there are various computer programs that have been developed to help the traders make their trading experience easier. These programs are called “automated trading systems”, and they are designed to automate the transactions, so traders won’t have to spend so much time in their trading transactions.

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These programs take away most of the work that is required to be done to trade efficiently. This is particularly helpful for those traders who doesn’t have much of a time to trade. These programs follow a predetermined set of rules which determine when to enter or exit the market, and how much money to invest in each trading product.

So, by using an automated trading system, even a trader who lack experience or knowledge can finally trade on their own. The automated trading system doesn’t guarantee profits 100% of the time, but it’s actually helpful, especially if you’re just starting your trading journey.

There are several automated trading systems available in the market, so it’s just a matter of choosing the most suitable trading system for you.

More than half of the market players use automated trading systems, or expert advisors, for their trades. Using an automated trading system basically removes the emotions in trading, such as fear and panic, which is usually the reason why most traders lose money and potential profits. By taking away the emotion in trading, traders will have an easier time to stick with their trading plan.

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Most automated trading systems are user-friendly, so you don’t have to spend so much time to learn how to use it. However, it is important to carefully review the functionality of the system first and evaluate if it fits your trading style before choosing an automated trading system.

Also, it is also important to understand the risks associated with using an automated trading system.

Learn more about the forex market and further refine your trading strategies by reading our forex related articles. See who the best forex brokers are, visit Wibestbroker.com to find out!