Tips

Why Breakouts Work in Forex Trading


For traders who like to catch big moves, breakout trading is a time-tested methodology that yields profits when done correctly. Breakouts are especially helpful signals to follow in forex trading for two reasons:

  1. Forex trading is a 24-hour market so there are often periods of price consolidation.
  2. Forex trading is often affected by news events (which often cause price breakouts).

What you will learn ahead 🎓

  • Understanding breakouts in forex trading
  • How to identify breakouts efficiently
  • How to use AI to trade forex and take advantage of the market.

🎯 We expect to help you invest efficiently in forex and improve your results. Get extra valuable forex trading ideas from leading finance experts on the trading Academy and on our free forex Telegram channel.

💹 When trading forex, we suggest you consider long term results.

Let’s understand breakouts in forex trading

📌 A breakout occurs when the price moves above a resistance area or below a support area.

The goal of trading breakouts is to enter the trade just as the breakout occurs and continue until volatility dies down. With a market that never closes (forex) your ability to identify and trade breakouts increases. It’s important to pay close attention to the volatility of a currency pair. Pairs that have low volatility allow you to set up your position to be ready when a breakout occurs.

 

Forex Trading

A noteworthy study that appeared in the 2004 Journal of International Money and Finance by Evans and Lyons details the effects of news on forex prices. Interestingly, the study reports that the time frame of influence on exchange rates is not limited to seconds or minutes, but rather last for hours or even for days sometimes. The effect on returns will generally occur on the first or second day. However, the impact can linger until the fourth day. In contrast, the impact on the flow of buy and sell orders is still strong on the third and fourth days.

Knowing when news reports are released and whether the information is positive or negative will help you trade the news to your best advantage.

 

Forex Trading

The simple method for trading breakouts is to:

  1. Identify a lower-than-current price as support.
  2. Identify a higher-than-current price as resistance.
  3. Make an entry when the price closes beyond either of these two lines.
💡  Make sure to apply for a stop-loss order when you enter a position on a breakout trading signal. This will ensure that you have defined and controlled your loss if the trend does not continue.

The disadvantages of trading breakouts are:

  1. The possibility of a false or failed breakout.
  2. Breakouts can happen any time all around the clock.

To overcome these disadvantages, you need a method for filtering out false or low-probability breakouts, and you need to be able to spot trades that can happen at any time. That’s where Wizeinvest can help. The AI trading system never stops looking and are quick to alert you to high-potential opportunities.

The machine-learning AI also filters through trades looking for highly reliable breakout trades, to help make sure you don’t waste money one trades that whipsaw the price action.

The best way to trade forex

There are two ways to invest with our AI in forex without concern about finding breakouts.

1. Automated with AI-Trading. Check out the 3 steps to trade automated with our AI.

automated trading with ai bot

By trading forex automated with AI, you will save time and improve your performance without monitoring the market and managing trading platforms.

With Automated AI trading you do not need MT4 / MT5 and other trading platforms to invest in forex. All forex trades are automatically placed into your broker account every time that our AI system identifies a new worthy trading opportunity. You can monitor the AI trading performance in real-time directly on our dashboard.

Automated AI trading benefits ✅

  • Setup in 3 minutes.
  • Totally hands-off, from anywhere.
  • Invest from just $1.
  • APY of 43% over the past 10 years*.
  • Capital is protected under the broker.
  • Lightning-fast execution & no slippage.
  • No commissions, no management fees.
  • Portfolio with 40 different automatic strategies.
  • No MT4/MT5 or other platforms required.
  • Test with a risk-free practice account.
  • Trading results directly on our dashboard.

Would you like to open a forex broker account? Our AI is integrated to trade automated with the brokers Oanda and FXCM. Click here to open an account with FXCM or here to open with Oanda. Those are some of the best forex brokers in the world.

2. Manually with AI forex signals.

Wiseinvest also provides AI forex signals that perfectly fit into MT4, MT5, and any trading platform. To trade with our AI forex signals, you must simply copy the data you receive from each real-time signal into any forex brokerage account of your choice.

There are five unique variables for each AI signal, and each must be copied exactly, to match the performance of the signal as close as possible.

Each AI forex signal alert consists of the following five data points:

  • Symbol (forex pair).
  • Direction (long or short).
  • Position size (number of units or lots).
  • Take profit (price level to exit with maximum gain).
  • Stop loss (price level to exit with maximum loss).

Check out how to trade with our AI forex signals

  1. Subscribe to a Wise-Plan.
  2. Open a Brokerage account. Check this article about the best forex Brokers.
  3. Set an amount and a position size on our Wiseinvest dashboard.
  4. Our AI will send you real-time trading alerts by email and Telegram.
  5. Copy the signals and paste into your Brokerage account.

All forex signals are sent every time that our AI trading system identifies a new trading opportunity. Our trading strategies are developed on a variety of time frames such as 4 and 8 hours.

Wiseinvest AI forex signals are Market Orders and you do not need the entry price. You can copy each signal while it is available on our dashboard. We do this way to assure that traders will just place signals while they are good to be traded.

You can trade forex with our free forex signals clicking here, or with our Premium subscription that provides you unlimited AI signals and automated AI trading in partner brokers. Whether you are a beginner or a professional forex trader, our AI trading system can help you save time and improve your trading performance. Get started with free AI.

When investing through Wiseinvest automated AI trading or AI forex signals, you do not need to calculate pips and change the leverage in your forex broker account. Learn more about leverage in forex trading clicking here.

What is the AI performance in forex trading?

The Win Rate of our AI shifts as indicated by the period and can reach up to 95%. The performance depends on the proficient wilderness estimation metric, which implies that our model is beneficial at whatever point the Win Rate is more prominent than 60%. All techniques of our AI Trading framework look for stable returns and adequate outcomes to accomplish a normal return of 40% every year (APY), without the utilization of high influences.

We comprehend that what is important in forex trading is the conclusive outcome. Along these lines, the financial specialist needs to consider that Win Rate isn’t generally the best measurement to gauge execution in forex, as other signal suppliers unveil. For example, out of 100 exchanges, it is conceivable that lone 1 exchange is sufficient misfortune to make the 99 exchanges not productive. For this situation, the Win Rate would be 99%, yet the conclusive outcome would be unfeasible (negative).

We center around the arrival of 40% of APY and not simply on Win Rate.

It is basic to see that forex brokers may charge spreads, commissions, and overnight expenses in your trading account, and these elements can influence the AI execution. You can check our forex trading history to see more about AI Trading execution clicking here.

How much do I need to trade forex with AI?

You can begin in forex trading with free AI signals or AI Trading records and make a store from only $1 in the broker. It is likewise conceivable to test utilizing a hazard-free practice account with our AI Trading framework. In any case, to do a proficient hazard the board in genuine records, we recommend you start from at least $100. Notice that some forex brokerages require diverse starting stores to exchange forex.

What is the trading strategy of our AI?

Our AI procedure is the mix of various AI Trading frameworks, with more than 100 tactics, that characterize 40 distinct techniques which at the same time consider: Quotes of the 28 forex pairs, Supports, and Resistances in various time periods, Trends and Counter-patterns, Cross-markers, Index of each pair, Economic Calendar, Investors Sentiment.

Our AI examines those fundamental, technical, and sentiment factors that influence forex trading, and all models are assessed continuously utilizing various loads. In the wake of finishing the investigation, the decision of the signals emanation technique is made considering the improved probability of momentary benefit and the sum accessible for speculation.

Using technical analysis, our calculation considers not just the examples of different patterns, including backing and obstruction levels and cross-pointers, yet our AI is likewise ready to make its own ongoing record for every money pair, that is utilized to distinguish what is the best course and target.

Comparable to fundamental analysis in forex, the AI makes a connection inside the financial schedule to discover news information that can influence explicit cash sets.

Disclaimer: Forex and Contracts for Difference (CFDs) are complex instruments and come with a high risk of losing money due to leverage. Forex trading is not suitable for everyone. You should consider whether you understand how forex and CFDs work and whether you can afford to take the high risk of losing your money.

The forex brokerages displayed shall disclaim the overall performance of traders in their platforms. Oanda warns that 76.8% of retail forex traders lose money trading CFDs. XTB warns that 80% of retail forex traders lose money trading CFDs.

FXCM warns that 74.74% of retail forex traders lose money trading CFDs. The performances aforementioned are not related to Wiseinvest AI forex trading and AI forex signals system. You can check the performance of our AI forex system on our dashboard.