The ULTIMATE beginners guide To Breakout PATTERN Trading

"we were predicting a break out of this ascending wedge directly after the intro of this favour we're gonna go into a clip of that video so if you're new go ahead and subscribe to be alerted when we come out with other free content click that like button for me while the intro and disclaimer roll and I'll be right back to the clip directly after here on the dollar yen this market putting in a pretty convincing looking wedge pattern here to the high side looking for this breakout to push us up to around 112 and that's honestly kind of what we're expecting out this market throughout this week we may get another slight pullback then that breakout and of course there's always the possibility that we could come lower but when it comes to what we're expecting at this moment is a breakout above this level and that's what we'll be looking at for this week here on the dollar yen is waiting again for this possible breakout of our wedge pattern"

"as you can see from that clip we had a prediction that the dollar yen was gonna break out of this ascending wedge pattern and head higher that's exactly what the dollar yen did and just to prove to you that we actually trade based around some of the stuff we teach you here on YouTube I'm gonna put up a screen shot either over here or over here one of the sides of my face there's gonna be a screenshot of an email analysis that we sent out either Monday or Tuesday we sent out this email analysis warning traders that we were planning on taking a long position here on the dollar yen and expectation for this breakout and that's exactly what ended up happening this breakout has since pushed this market up over a hundred and twenty pips"

"here on the dollar yen that's exactly what happened we had this resistance level that kept being tested the buyers were warning us though the buyers were warning us by making higher lows we're consistently making these higher lows before this breakout meaning that what we have is people selling here their stop-loss probably just above this previous high and we have buyers coming in at a higher level and a higher level and a higher level to support the market and eventually the market pushes up breaking through those stop-loss orders and causing a massive breakout like what we just saw here on the dollar yen"

"so here we have trend one two three then let's say we get this ascending wedge pattern right here one two three right now we know we have an ascending wedge pattern the next step is figuring out when and how we're going to trade it and there's a few different options for this one of the most aggressive options is to draw a trendline after test number one and two and on the test of number three you can make this less aggressive actually it on the test of number three you can wait for an entry reason that's very similar to what we did with the dollar yen trade so on test number three you can wait for an entry reason to either on a lower timeframe or on the timeframe that you're looking at doing your analysis that is one of the most aggressive ways to enter but entering let's say it's like I said drawing this trendline after one into entering old test number three of that trendline aggressive way to do it but at the same time you're getting in at the optimal position maybe a stoploss below swing number two right here putting yourself in position to capture a really good risk to reward ratio"

"but we also have option number two which is a little more conservative and that is to wait for the breakout because at test number three we don't really know if it's going to be a breakout remember what we're trying to take advantage of are these stop-loss orders right here so if we get in on number three right here if we get on on this trendline touch for the third time then we're not taking advantage of that because we don't even know if the mark is going to hit that yet so that that that's why it's an aggressive entry and that's why it's one of the most dangerous ways to enter a breakout trade but if you know what you're doing you can get a really good risk reward out of it and again go through the market test it figure it out for yourself but here the second way we can do this is waiting for a breakout of this resistance level right here so as we wait for this breakout once this breakout happens we can enter the market on the breakout of them label this e because now we're entering right here and I'll actually just delete all this because it could be getting confusing so let's go ahead and just draw out our ascending wedge pattern one more time one two three all right so the entry we're talking about now could be directly at the breakout stop-loss down here target up higher right maybe a better than one-to-one risk reward but with this being the case again right here's those stop losses what we're trying to do is take advantage of those stop-loss orders and the point is we haven't taken advantage of that directly after the breakout so this again aggressive not as aggressive as entering on number three here but still an aggressive way to enter the most conservative way to enter is on a pullback so after the markets already pushed up those stops all sorters have been taken out we see that the market is going to continue in trend if you know how to reach rent we see we've made higher highs than our previous high back here once we've made those higher highs waiting for this pullback back into this resistance level is one of the most conservative ways to enter this breakout type pattern and the most conservative way to enter a breakout on this ascending wedge we're talking about today"

"here we have this move down putting us into trend we have a support level right here that's hit one two three times so now what we need to do is see if we have falling resistance levels well we have a high here a lower high here and a lower high here we draw a trendline on that as you can see this is in fact one two three tests this is a descending wedge pattern while in trend to the downside which is exactly what we're looking for"

"unfortunately our live example trade that I was going to use for this video has already hit targets here on the euro dollar as you can see so it's not necessarily going to be a lob trade but we will still break down the analysis behind this trading opportunity here on the dollar yen excuse me here on the euro dollar I'm gonna go ahead and actually delete my buy stop order here which was going to be our stop loss let's scroll the chart up a bit and let's talk about why we were interested in entering this descending wedge pattern right let's break this chart down in a sense to the point that you'll understand why we wanted to enter this specifically here on the euro dollar well the reason is pretty simple guys it's exactly like what we've been talking about during this entire video we have a downtrend right we know that because we have a one to three move at least a downtrend considering what we talked the beginning of the video so we have one two is the pullback right here three is that next impulsive move after that we have three support levels we have one here two and the third one was here we also have one resistance level followed by a smaller resistance level or a lower resistance level excuse me followed by a third test so this third test here is where we decided to go ahead and enter the trait we opened a position here on this third test our stop loss went 180 our above the second swing level and our target was right here around one point one six three one and the reason for that is because that was the next level of major structure if i zoom the chart out looking left you can see right here and it's also tested in through here here and here so we have four tests here of this level that's why we chose to take targets at this level here on the one-hour chart and as you can see this chart downtrend followed by descending wedge pattern like what we've talked about in the video followed by a continuation of that trend that's exactly what we're looking for using these types of patterns"