Once the price closes outside of tunnel boundaries, we will be looking at the volumes to tell us what is going on. First thing we want to look for, is growing activity from session to session. Considering the fact,that price is already traded beyond the tunnel, we will be waiting with the pending order for price to continue to move away from the tunnel in the breakout.
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Strategy uses envelopes (moving averages applied on high/low price) to identify tunnel. Tick volume is subsequently used to scout for a growing activity outside of the tunnel. Once we identify growing activity, we place pending order, expecting price to continue to move in the direction of breakout.
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Strategy was tested on high quality historical data since 2003 with positive results it is brought to you free by theforekings.com. The system works for wide variety of settings and can be also used for scalping purposes (wide adjusted settings).
Used forex tools and indicators
Envelopes. (deviation 0,3, period 60) Price must close above or below tunnel to consider for use to even consider a signal.
Tick volume (volumes forex indicators). We will be looking for 5 consecutive growing volume bars. With fifth bar marking the candle closing outside of tunnel boundaries. Once we identify such a candle, we place pending order in the direction of breakout at its furthest point from the tunnel (high/low).
Stay valid: Each pending order will remain valid for 3 days.
Forex strategy rules
SELL
Price closes below bottom envelopes line.
Each of previous 5 volume bars is larger than the one before it.
We place pending sell stop order at the low of fifth candle (signal).
Stop loss: 50 pips
Take profit: 30 pips
BUY
Price closes above upper envelopes line.
Each of previous 5 volume bars is larger than the one before it.
We place pending buy stop order at the high of fifth candle (signal).
Stop loss: 50 pips
Take profit: 30 pips
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Disclaimer: Expert advisor was tested for profitability on historical data. All screen shots provided are displaying real results of the test. However past data will never guarantee future success. Every expert advisor needs to be tested properly on demo account. LIVE use only on your own risk. Read full disclaimer. TheForexKings Team does not give any financial advice. TheForexKings does not take any responsibility for any user’s investments and investment decisions. All rights reserved. Strictly for personal use.
