September 16, 2014

Profitable Breakout Trade On The AUD/USD Pair - September 2014

I always say that if you are looking for a high probability forex trading system that is capable of generating some big profits and has a very high success rate, you should seriously consider trading price breakouts on the daily charts.

I don't take positions on the daily time frame that often, but every so often an opportunity comes along that's too good to turn down, and that was certainly true with the AUD/USD pair this month.

If you follow a number of forex traders on Twitter or Forex Factory, for example, you will know that a lot of traders, including myself, have been waiting for a breakout to occur on the AUD/USD pair because it had been trading in a very narrow trading range and hovering just above the EMA (200) for a number of months.

Well that's exactly what happened last week because the price finally broke below this trading range (indicated by the thick black lines in the chart below) and made a decisive move below the critical 200-day exponential moving average.

audusd16sept.png

I myself entered a short position after the daily candle closed last Tuesday at 0.9208 ( I would have preferred the price to close outside of the trading range, rather than a few pips inside), which was a little premature, but I didn't want to miss this opportunity.

Thankfully it turned out okay, though, because the price continued to drop in the following days and I managed to close 75% of the trade at 0.9100, and just yesterday I closed the remaining 25% at 0.9000 as this was just short of the 61.8% fibonacci retracement level and was a natural exit point.

Anyway the point of this article was just to demonstrate how profitable these breakouts can be, particularly if you have an established trading range that has remained in place for several months, as was the case with this AUD/USD pair.


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