Breakout "55" Strategy


The Breakout "55" Strategy is only using the 45 period EMA and no other indicators. It is working on the concept of breakout trading and is very simple. However only experienced traders should trade this strategy because breakouts can often result in a fake out with price reversing back to its previous trend. This strategy is working best on H4 and daily time frames and therefore is not an intraday strategy. Please have in mind that it requires quite some experience in knowing how to identify a breakout from a fake out.

Breakout "55" Strategy Rules

Long Set up:

  • Price closes above the 55 EMA
  • Second candle after the close should also be bullish
  • Buy on the third candle
  • Set stop loss to a few pips below the 55 EMA
  • Take profit will be 60 – 80 pips for using the H4 time frame and 150 – 200 pips for trading the daily time frame

Short Set up:

  • Price closes below the 55 EMA
  • Second candle after the previous close is also bearish
  • Sell on the third candle
  • Set stop loss to a few pips above 55 EMA
  • Take profit will be 60 – 80 pips for using the H4 time frame and 150 – 200 pips for trading on the daily time frame

Short Set up

  • Price is breaking below the 55 EMA
  • After two bearish candles a sell order is placed with 80 pips for taking profit and stops placed just above the 55 EMA
  • Trade results in a profit

Long Set up

  • Price is breaking above the 55 EMA
  • After two consecutive bullish candlesticks a buy order is placed with 80 pips for taking profit and stops placed just below the 55 EMA
  • Trade results in a profit