Most traders are familiar with the Breakout Strategy, where you identify an area of support and resistance which price eventually breaks out from. This is a strategy used world wide, however there are a lot of FAKE breakouts. One way to identify a REAL breakout is to look at the order flow. If a breakout is supported by order flow then the chances of a continued move dramatically increases. This is because the order flow is telling us that the breakout was a global move. Example if we look at a bullish Breakout on EUR/USD without order flow, we dont know if EUR is actually strong and USD weak because we are only looking at EUR/USD. If we apply order flow to the equation and positive order flow is present at the breakout then this means that EUR is actually strong on a global scale and USD weak. Meaning on most pairs EUR is increasing in value and USD is declining. This give us a massive advantage when trading Breakout !!!
Rules: Open a buy position when price breaks above resistance. Place the stop loss at the low of the signal-candle. This is where we place our risk because price should not be able to re-visit this level. Take profit when the signals disappear, this indicates that the order flow is no longer present. After a breakout, you can keep adding positions on every green arrow – remember only add positions to winning trades and let them run! If you follow this you will have a massive advantage trading breakouts. Personally I have been trading with 2 strategies in the last 10 years, this is one and the other one is a pullback strategy where I wait for price to pullback to a fib level before entering.
Here are the indicators that identifies the FX Market Order Flow of the 28 Major Currencies!
Keep in mind that the order flow indicators was made to serve the Daily Time Frame, but it will work on all time frames, however I recommend not going any lower than the H1.
If you need help, just send me a PM and I will be happy to help you 🙂 <3
All Love,
Robert
