Mikemachuma31
New Member
For example, a currency pair may be undergoing a period of consolidation. Once it breaks out of the congestion, or range, one trader may favor playing the breakout, while another opts to wait for the first pullback to develop.
Then there is the trader who looks to utilize both a breakout and pullback methodology to increase position size when the trade is moving in their favor. That is, enter a portion of the trade upon the breakout as we discussed in our recent breakout trading webinar, then add to the position on the first pullback post-breakout.
The advantage of taking this approach hinges on the improvement of the trade’s risk/reward profile. While the breakout trade is in the money (showing a profit), another portion can be added to the trade on a pullback, ideally the first one. It’s an excellent way to add to a winning position while keeping the downside in check.
Then there is the trader who looks to utilize both a breakout and pullback methodology to increase position size when the trade is moving in their favor. That is, enter a portion of the trade upon the breakout as we discussed in our recent breakout trading webinar, then add to the position on the first pullback post-breakout.
The advantage of taking this approach hinges on the improvement of the trade’s risk/reward profile. While the breakout trade is in the money (showing a profit), another portion can be added to the trade on a pullback, ideally the first one. It’s an excellent way to add to a winning position while keeping the downside in check.
