Simple bearish breakout strategy for beginners

Breakouts lead to momentum and momentum is the aroma of forex trading.It is therefore necessary to devote quality time to learn and understand the concept of breakout and the opportunities that follow it.Some traders build their strategies around true breakouts while some maximise false ones. I tend to use the two most of the time.Today, I am going to explain how to use a very simple daily trading strategy to generate selling signals.
The strategy is designed for selling any chosen pairs. It uses daily chart. Anyone who wants to use this method must know how to identify OHLC on a daily chart of the currency pair of his or her choice.
We choose to capitalise on price action around the  low of the previous day.We expect to sell today once the market price moves down and breaks the low of yesterday. It is therefore a momentum based approach.One good thing about this kind of methods is that they enjoy high acceleration towards the profit target and therefore have high success rate. How to trade momentum in forex.

 

For example,let us say that we want to trade on Tuesday. All we need to do is to  check the low of Monday candle which was the previous day candle with respect to today. We will place our sell order at 5 pips below the candle and set our take profit  as 100 pips, stop loss of 40 pips and trailing stop of 40 pips. The take profit and stop loss are essentially at the discretion of the trader especially if you are already a star trader. How to use momentum indicators  to confirm trend in forex.

The favourite or recommended pairs for this  method are EURUSD,  GBPUSD, USDJPY, USDCAD, USDCHF and AUDUSD. AlthougH this works in any market that has OHLC.  I use this method on daily charts and for selling currency pairs.
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