When I started this website, I was testing a breakout trading strategy based on a Forex Factory forum, called "Stairstep Breakouts".
Perhaps partly because I did have some success with it to begin with, and partly because of the authors confidence, it was the only system I used for a while. Most of the robots I developed became breakout based, and sometimes they even seemed to work quite well.
It was the first system I ever seriously tried to trade manually. Unfortunately, it hasn't worked out so well for me. It could be because I lacked the patience to sit at the computer for hours on end waiting for breakouts, or because I kept going to bed with live trades active and not managing them properly. Probably the fault is completely mine.
I tried various methods of trading it. I would set alerts to go to my phone. I would try trading every breakout no matter what. I tried trading only on the 4 hour time frame. All without much success.
The biggest problem was that I would often get whipsawed. The next was that the successful trades weren't returning enough profit to counter this problem, and my account balances (mostly all demo) dwindled.
Week after week of looking at charts trying to catch these breakouts, I noticed several things. First, whipsaws occurred very frequently when the market wasn't sure what it was doing (consolidating). Second, in strong trends, I was closing trades way too early.
This lead me to try weekly breakouts, inside bars and swing trading, which worked very well at first, until I had troubles again with consolidating markets.
Then I investigated Nanningbob's trend and pivot based system, which worked even better.
Currently I'm manually demo trading several systems based on the above, and have had a lot more success than I ever have with the breakout system.
However, I credit this particular breakout system for making me watch prices more closely and paying more attention to what's happening, which in turn lead me to the systems I trade now. The time spent studying this system, even though it hasn't worked for me, has been extremely valuable.
