What type of Trader are you? Bounces & Breakouts

Continuing my series to determine what type of trader you are here  is an article on trading styles.

I have a belief that trading strategies come down to two simple variations. Either:

a.  A bounce off a line of support or resistance, or

 b. A break of a line of support or resistance.

Some may say I’m being a tad simplistic but I offer no apology.  It’s a valid definition and works very well for this exercise.

So the question is whch type of Trader are you?  Someone who trades a bounce off support and resistance or someone who prefers to trade a breakout of a line of support and resistance?

Do you even know?

If you don’t then you now have a valid excuse to go back through your trades and determine:

a) which type of trade you have a preference for, and

b) which type of trade has been giving you results.

I warn you the two answers maybe different!

Personally I prefer bouncing or pivoting opportunties off a line of support or resistance. And I’m lucky that my results back that up.

Either strategy is valid, you just need to know what works for you.

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About FXTraderPaul

A professional Trader and Coach, FXTraderPaul blogs about his adventures from the front-lines of FX Trading. A Trader and educator who can walk the walk as opposed to merely talk the talk!

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2 Comments on “What type of Trader are you? Bounces & Breakouts”

  1. Allison Yannakis Says:

    Good post – to be honest I have no idea what I am but like you say I am going to go back through my trades and see if I can identify the type of trades I take. Are there specific price indicators you favour i.e. inside bar, swing low, swing high, power pivot (these might be called something else for you). Once you have found a set up – do you look more closely into these types of price bars or are you purely trading what you see i.e a bounce or a break through – regardless of what the price bars are doing?

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    • FXTraderPaul Says:

      Hi Allison,
      Thanks for your comments and feedback. My strategy is simple – I am looking for a confluence of events. That’s it. (As an aside, it always disappoints people when I tell them my strategy. They’re expecting some sophisticated secret Holy Grail style of approach.)

      So even though I prefer pivoting or bounce-off strats (I’m sure there are plenty more descriptions) I’m still looking for a confluence of events. If price is bouncing off a line of support or resistance that also happens to be a pivot or fib level (though I use these much less these days) and is demonstrating a reversal candle pattern whilst looking at being overbought or oversold on in indicator then I have my confluence of events that provides me with an edge. Though I should state that it’s merely an edge. The probs may have swing in my direction from 50-50 to 60-40 that’s all. It’s by no means a dead-cert. I just have to trade with solid money managment skills.

      I hope this helps. Good luck with analysing your own results.

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