Correctly identified breakouts are still considered to be one of the best trading opportunities present in the market today. Breakouts require substantial time and traders experience, especially because they happen so fast and during harsh market conditions. This forex strategy presents complete, effective and proven solution to trading breakouts in forex.
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It allows trader to focus on breakout execution itself without having to worry about tunnel drawing, breakout candle or profit loss/ targets.
All a trader must do, is to execute flawlessly and be present in front of the chart when the breakout occurs. Or he can use the expert provided by theforekings.com, trading this forex strategy. Use EA also to test this system and adjust the rules according to your own needs.
We have tested it on data since 2003 with profitable results, worth sharing !
Used tools and indicators
Envelopes (period 60, deviation 0,1). The indicator is used to automatically draw a tunnel consisting of average low and high price. Breakout of either of zones, with confluence with breakout candle condition. The band opposing the breakout is used as a stop loss target.
Envelopes targets (deviation 0,5): Additional envelopes tunnel is drawn. We will use it for profit target. The period is the same, deviation should be at least 50 percent higher.
Breakout candle: Candle breaking envelopes line must have a defined size range of the body 40 – 150 pips, (this will help us avoid low activity flat candles that are often coupled with fake outs).
Break even function (after 90 pips). After the trade reaches certain profit, stop loss might be placed to break even position. This simple trick will ensure that most winners will not turn losers.
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
SELL
Signal: Price closing below bottom envelopes line, with candle of body size of 40 to 150 pips. Previous candle closed above the bottom envelopes line.
We enter the trade on breakout (signal) candle close.
Stop loss is placed at the price marked by upper envelopes line in the moment of entry.
Take profit: Bottom target envelopes line at the moment of entry.
Break even after 90 pips
BUY
Signal: Price closing above upper envelopes line, with candle of body size of 40 to 150 pips. Previous candle closed below the upper envelopes line.
We enter the trade on breakout (signal) candle close.
Stop loss is placed at the price marked by bottom envelopes line in the moment of entry.
Take profit: Upper target envelopes line at the moment of entry.
Break even after 90 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.
