What are the best Forex price action strategies to use for bigger profits? Here we will look at a proven FX price action trading strategy which makes big gains. Lets take a look at the trading method in more detail.

When looking at Forex charts, you will see that all the biggest and best trends start in the same way – they start and continue from breakouts and this is probably the simplest to understand and most effective FX Price action method to use.

Breakout Trading Simple and Effective

Forex breakout price action strategies are simple and effective because they work and the logic of them is easy to understand. If you see a break of resistance in a bullish market, you know the supply and demand situation has changed and you also know, a trend in motion is more likely to continue than reverse. Trading price action breakouts gets the odds in your favor and that's what you need to enjoy Forex trading success.

Confirming a Trading Signal with Price Action

In terms of price action trading most traders want to buy the low so they buy dips and try and predict but they just get stopped out the market as prediction is guessing. Also before a breakout many traders like to sell into resistance and catch the high - but they get taken out on stop.

When the breakout occurs which fuels the momentum behind the break and this is when the smart trader buys the break. Sure he has missed a bit of the move but the price action going through resistance, puts the odds in his favour of a continuation of the trend.

Trade Longer term Price Action to Increase the Odds of Success

If you look at just price action via technical analysis, you will see that the best breakouts can generate trends that can go for weeks or months and you should focus on these.

There are many who say you can make money by trading shorter term moves and advocate day trading or scalping but its a fact, the shorter the time frame the less effective a trading strategy will be in terms of accuracy with its Forex trading signals. If you use scalping or day trading strategies your simply trading the noise of the market and this will see you lose money so focus on the longer term

Your Price Action Trading System for Success

In terms of price action trading systems breakout methods are easy to learn and apply but if you want to succeed and make big profits, you need to keep a few other points in mind:

Be very selective in your trades and only trade levels of resistance which have been tested several times and the rule of thumb is – the more tests before the break occurs the better your odds of success.

The spacing between the tests is also very important - the more widely they are spaced, the better the odds of success when the break occurs.

Finally, the best breaks always seem to come out of nowhere and price action heads in a direction which no one expects. If news is bearish and a bullish break occurs its a powerful signal. Always keep in mind 95% of traders lose money!

Candlestick charts, can give you the trading sentiment as the break occurs so you can get a visual idea in terms of trading sentiment which will tell you if the break is likely to continue.

The final point to keep in mind is breakout trading is effective only, if you have strong money management and understand you need to hold the long term trends and don't bank early but when you are in a losing trade you cut it quickly. If you cut losses quickly and run big price trends, you can make great Forex trading profits.

Final Words

There are other methods of trading price action but if you want a proven and easy to learn Forex price action strategy then there is no better way to make money than via breakout trading.

Always keep in mind – as long as currencies trend, breakout trading will always make money. So make a breakout trading strategy part of your Forex education and start making big profits in around 30 minutes a day.