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ADX breakout FOREX strategy

This forex strategy uses ADX to filter out any other than trending conditions. Position is entered in the direction of breakout and the trend. Breakout entry is identified on envelopes forex indicator that will draw tunnel boundaries for us.

Envelopes entry is one of the best entry signals and coupled with correct trend direction can bring amazing results.

Forex indicators used in strategy

ADX (average directional movement index) period 80. Apply additional line (yellow) with value 10. It will separate trending from ranging conditions and help us to trade on the right side of the market. ADX will determine the trend and confirm sufficient momentum of our breakout.

Envelopes forex indicator: This simple indicator will draw us a tunnel boundaries consisting of average low and high price. Breakout of either of those lines can be considered to be a valid breakout and our signal, if confirmed by ADX.

Apply both indicators in 1H chart of any major currency pair. For the best results, trade with professional ECN/STP broker with MT4. If you can't trade with profit. Automatically copy the traders that are already profitable.

Forex strategy rules

BUY

ADX green trending above ADX red. Main ADX line (blue) is above yellow line, signalizing sufficient trend strength.

ADX breakout FOREX strategy

Signal: Breakout of blue envelopes line. Candle closing above it. We enter the trade on candle close placing stop loss below the candle low.

Take profit: Double the size of signal candle range. After the price travels distance that equals candle range, stop loss is placed at break even.

SELL

ADX green trending below ADX red. Main ADX line (blue) is above yellow line, signalizing sufficient trend strength (momentum).

ADX breakout FOREX strategy

Signal: Breakout of red envelopes line. Candle closing below it. We enter the trade on candle close placing stop loss above the candle high.

Take profit: Double the size of signal candle range. After the price travels distance that equals candle range, stop loss is placed at break even.

Signal reset: Before entering another trade in the same direction make sure that at least on candle opened and closed within envelopes tunnel boundaries.

ABOUT US

THEFOREXKINGS

“Trading FOREX since 2006. Full time trader and web developer since 2013. My two biggest hobbies are trading and web development. In TheForexKings I managed to connect both of them. Even after 12 years of trading I still have the same passion for the market as at the beginning. The aspect I enjoy the most : development and testing of new ideas.” 

 

Only in 2016 - 2017 we have created more than 400 forex strategies. During this period we have also developed and published +200 MT4 Expert advisors based on those strategies. We are dedicated to provide you with viable and complete trading systems that have thrived in extensive historical testing. We want to give you complete and transparent trading solutions, that once mastered ,will set you financially free. We want to give you a fighting and winning chance in the market. ” 

—  Marian, Proprietor of TheForexkings.com

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