Breakout Trading Strategy

Most breakout traders lose money because they chase the first move. Price spikes, spreads widen, and the entry is late.

The Lanami breakout framework is built to avoid that. Instead of entering on the first breakout candle, it waits for confirmation while price remains on the correct side of a 10-period simple moving average (SMA10).

This page explains the exact sequence, bullish/bearish breakthrough → rejection → breach → entry on the next candle, so you can trade it manually or automate it consistently.

This strategy is used across timeframes from M5 to H12. The rules do not change.

Lower timeframes create more setups but more noise. Higher timeframes produce fewer, cleaner setups.

The only thing that should scale with timeframe is your expectations and your risk plan, not the entry logic.

Lanami uses a 10-period Simple Moving Average (SMA10) as a trend filter.

• Long setups require candles to close above SMA10 during confirmation
• Short setups require candles to close below SMA10 during confirmation

The strategy uses close-based confirmation only, wicks do not qualify as acceptance.

A valid buy setup requires three candles in sequence, then entry on the next candle.

Step 1: Breakthrough candle (bullish cross up)

• Open below SMA10
• Close above SMA10
• Bullish candle (close above open)

Step 2: Rejection candle (bearish, still above SMA10)

• Bearish candle (close below open)
• Close remains above SMA10

Step 3: Breach candle (bearish, still above SMA10)

• Bearish candle (close below open)
• Close remains above SMA10

Entry:

Enter long on the next candle after the breach candle.

Invalidation:

If price closes back below SMA10 before entry, cancel the setup.

The sell setup is the exact mirror of the buy setup.

Step 1: Breakthrough candle (bearish cross down)

• Open above SMA10
• Close below SMA10
• Bearish candle (close below open)

Step 2: Rejection candle (bullish, still below SMA10)

• Bullish candle (close above open)
• Close remains below SMA10

Step 3: Breach candle (bullish, still below SMA10)

• Bullish candle (close above open)
• Close remains below SMA10

Entry:

Enter short on the next candle after the breach candle.

Invalidation:

If price closes back above SMA10 before entry, cancel the setup.

Many breakouts are liquidity events, not trend continuation.

Waiting for a pullback and a second confirmation candle reduces:

• impulse entries
• late entries with poor R:R
• false continuation after spikes

The result is fewer signals, but cleaner execution.

From here you have two paths:

• Learn the execution method (manual vs automated)
• Apply the same strategy to a specific market like gold

Use the links below to move forward.