Translated from Russian by Google Translate
2 Сентябрь 2009

Alternative swing trading - trading system breakouts

One kind of trade, which is popular among traders, is trading on the oscillations. This system works on the principle of capturing subsequent rapid movement. That is, the trader is not interested in the development of the market situation in the long term. Emphasis is placed on short-term surge. Therefore, to some extent, the system of trade on breakouts can be considered as an alternative form of swing trading.


System forex trade based on the breakout is based on the premise that if the market makes a certain move from the current price, expressed as a percentage, that is a definite possibility that this movement will continue in this direction. Such movement can not and will not last long, but forex trading in this case expressed in the short entrance and an equally quick exit from the market. Market making small progress, but this will be enough to get, albeit small, but profit.

The system of trade on breakouts has nothing to do with trade in the rollbacks. In this case, forex trading is the direction in which the market is going at present. Entry and exit from the market is carried out mainly at the expense of setting orders. Forecast on the price movement in a given direction based on the assumption that the initial impulse that set price, precedes it. All the jerks that occur in the market, are due to trends towards disequilibrium. That is, sooner or later the market there is an imbalance of supply and demand, which resulted in price tends to a new level.

When developing a system of trade on breakouts as a guide can take the price of closing or opening the previous day. Input warrant can be exposed as a percentage of the previous two to ten range. The level of closure can be defined as a purely mechanical way, and on time. For example, the point of closure or opening of the previous day. Such systems work much better if the stops using a wide range.

Another way to trade on breakouts is a way, when the game is from the tops of the channels. In this case, we will buy when the price reaches the maximum level, which she was able to reach over the previous 7 days in the case when we have a channel with 7 periods. Or, you can buy when the price peaked, which she was able to achieve over the previous two days, when the channel breaks with 2 periods. In the case where trade is conducted within the day and drops suitable case for trade on the breakout, the guidelines will serve as a daily maximum for the purchase and daily minimum for sale. This signal is used as a breakthrough channel 1 period.

Model system of trade on breakouts look like this:

1. Opening long or short position based on the opening of the current candle to light a certain percentage of the range of the previous day
2. Immediately after the opening position should be the establishment of protective orders
3. We develop an exit strategy at various developments

When using a system of trade on breakouts can use the following types of variables:

1. Percent. Takes into account a percentage of a certain range. For example, you can use 110% of the entire range of the previous 3 days
2. Period. This breakthrough, which is based on the function of the preceding day or the preceding ten-day period
3. Range. Use the average range for the selected period. Can also be used as full range, and the largest and the minimum
4. Base. It is a feature that is added to the closure of the previous day or the opening of the current. This feature, among other things can be added to the minimum or maximum of the previous candle, or the preceding period.

Once again, we recall the basic conditions of the system:

1. Enter the market, preferably in a day that goes after the very narrow range for the previous seven days
2. Open positions can be the case when the price makes a new 20-day minimum or maximum for the preceding 5 days
3. Use filters. Filters can be attributed to the use of different indicators to determine the trend of the market, the degree of variability, etc. Keep in mind that whenever you add filters to the system, you should always compare the results with the basic data. Also, be sure to check the differences in the various levels of activity.

How to exit the market:

1. Sliding foot. In this case, the forex trade is conducted through an adjustment orders. They can move on the basis of Parabolic, the previous 2-day minimum or maximum, or may be moved on the basis of the moving average.
2. By taking into account the time factor. For example, you decide to close the position on the expiration of the next two days.
3. Through the use of target levels. This could include high or low the previous day, an average range of valid

How to install a warrant:

1. According to the price level. You can take as a guideline maximum or minimum candles
2. According to the function of the average actual range
3. Under fixed price

Why forex trading system on the benefit:

1. The most important quality that characterized this system - is the ability to adapt to changing market conditions. Trading in the rapidly changing market, you will learn how to think about the closing of the transaction immediately after its discovery.
2. You will learn how to operate in a rapid variability, as well as adapt to buying at the top and bottom of the sale. This is a very important quality - the ability to identify extreme levels. Many traders fail precisely because of his inability to act in such circumstances.
3. You get used to the elementary rules of money management and will make it stop-order immediately after the opening position.