breakout forex trading strategy

is that one of the fundamental principles of my trading methodology is to risk high probability setups the standard method of trading a breakout does not provide for low risk and it does not provide for high probability setup let's look at an example to see what I mean we have here for example an area of resistance price comes up to that area of resistance and pauses and the channels down below now most people will suggest that when price finally breaks through this area here do we enter here in this vicinity of the breakout with a stop loss down here somewhere just below the low of the area of congestion for me this is not low risk the distance for the entry here down to the stop-loss here is just too great yes I know you can reduce that position size accordingly to get the same dollar or percentage of equity risk but that's just not my style and for me this is not high probability either okay in this situation in this exact trade there may be sufficient order flow in this area here to propel the price skywards and to make this trade a winner that's great but the statistics show a significant number of breakouts fail and will turn around track them back down that way and stopping you out for a loss so it doesn't matter if it's a breakout of an area of congestion as we just saw here what's something else for example a symmetrical triangle pattern entering here stop-loss down here regardless of the pattern forming the breakout in my opinion it's just not low risk or high probability now that doesn't mean you shouldn't trade breakouts if it's something you really relate to many traders trade breakouts and do very well typically because the profits they make when they do win are proportionally much larger than the losses so you'll see here the average win much greater than the average loss okay that's all well and good but it does come come at the cost of a lower winning percentage and that's the part that just doesn't work for me it may work for you so how do I trade these areas well the support resistance article series handled the case where support and resistance held so for example resistance again to stick with the same example price comes up test that resistance area and falls and we're able to trade short anywhere as close as we can to that support and resistance area with the stop-loss nice and tight just up above here but what about when it breaks when this area doesn't hold how do I trade that well I'm simply looking for price action to offer me a low risk high probability set up just after the breakout so anywhere in this area here or in some cases even before it breaks out down around here yes you can get in before the breakout traders let's see what I mean after the breakout download here