Trading breakthrough is one of the most common techniques used in the market to trade.
The expectation is that if the price have enough power to break a certain level, then the price will continue to move in that direction.
The concept of a breakthrough is relatively simple and requires a moderate understanding of support and resistance.
The expectation is that the price will continue moving with the trend and actually break the extreme high or low and continue from there.
It is very important to avoid trading breakouts when the market is neutral because it will result in false trades that result in losses.
The reason for these losses is because there is no momentum to continue the move beyond the highs and low levels.
The breakthrough strategy fits more to dynamic currency pairs and the most recommended pair is the GBP/USD.
This strategy take place at 5 minutes chart, a naked chart without any addition of averages or indicators.
First, we will be looking to find a continuous process of several candles, up or down.
After that, we will be looking for a technical correction and as soon as the technical correction is underway, we can mark the last high or low level of the previous move.
After a small technical correction, when the pair returns back towards the continuous movement, we will be ready to enter a trade after the pair will climbed up or down 5 points above or below to the previous peak.
For traders of binary options, the recommendation is to enter a trade for 5-10 minutes expiry time ahead, after the entry a trade
The recommended time to use this strategy is the morning European session, 08:00 – 12:30 and the same goes to the US morning times frame.