Strategy Library

Breakout

Trade the move that comes after a long consolidation.

When price coils into a tight range for hours or days, energy builds. The break of that range — confirmed by a strong candle and volume spike — is your entry into the next directional move.

How to identify it

  1. Spot a clear range: at least 5-10 candles trading inside a narrow band.
  2. Mark the high and low of the range.
  3. Wait for a candle to CLOSE outside the range.
  4. Enter on the close or a retest of the broken level.

Trading rules

  • SL inside the range, just past the opposite boundary.
  • TP at the projected move = the range's height, in the breakout direction.
  • Skip if breakout candle has a long wick (sign of rejection).
  • Best when breakout aligns with higher-timeframe trend.

Common pitfalls

  • False breakouts — wick beyond, close back inside. Wait for the close.
  • Entering on the breakout candle without confirming retest.
  • Trading breakouts during low-liquidity windows (Asian session for majors).

When to use it

Powerful at session opens (London / NY) when liquidity surges drive ranges to resolve.

Best pairs

XAUUSD, GBPUSD, NAS100

Best session

Session opens

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