Trading breakouts is one of the most popular and easy ways to make money while forex trading.
What is a breakout in this situation? it is a movements of the price for the asset beyond a certain level. It may be support level, resistance level, pivot point and even Fibonacci levels.
With strategy based on the trading breakouts it is important to know when to enter the trade and when to get out, so that the volatility doesn’t eat all of your earnings right up.
What is volatility? In forex markets volatility is the thing that can make our lives as traders a living hell. It is impossible to know when the price is going to get all jumpy that is why we need to look out for it.
Volatility is a large price movement in a short period of time. And although it might seem that volatility can be of a great help due to large up movements, it is in fact not true. It is simultaneously our friend and our enemy as it can easy go up and down in the span of one hour.
What about entering the market? Well, in the volatile situation it is better to wait it out and enter a trade when the storm calms down and we can see the situation clear, without any risk to our nerves and damage to our wallet.