1H Breakout scalping forex strategy

This forex strategy is able to produce steady scalping results using conservative and time tested breakout methodology. Fundamental principles are applied to target the breakout in 1H chart and capture target profit of 20 pips. Strategy remains conservative. It will not open more than one trade at the same time. Each entry is protected by tight trailing stop. Resulting system is able to scalp the breakout formation with high degree of accuracy, achieving the winning ratio of over 65 percent. 

This forex strategy was accurately tested on tick data from 2003 to 2018. Used candle entry model ensures that historical test matches real time results very closely. Breakout scanner EA developed by our team, was used for testing of this breakout forex strategy. EA enables to optimize, test and trade this forex strategy without limitations. 

 

Used tools and indicators: 

  • Inputs were applied in 1H chart of EURUSD. To apply this forex strategy on other pairs, optimization must be done using expert advisor (Breakout Scanner EA). 

  • MACD filter (slow 600, fast 50): MACD is used to define both trend and momentum. Entry must follow this general market flow. 

  • Bollinger bands (period 20, deviation 2). BB tunnel is used to identify breakout. 

  • Size of the signal breakout candle (min 400 points, max 3000 points). Breakout candle must meet defined size criteria (min/max points for the body). Breakout candle must close outside the BB tunnel while previous candle closed within. 

  • Breakout candle must surpass previous low/high in the direction of trend.

  • Volumes: We measure the tick volume to make sure that it is growing on breakout candle, compared to previous candle that closed within the tunnel. 

  • Trailing stop (extra deviation 300 points): Trailing stop is based on BB that got broken by the breakout candle. Extra deviation is applied to put TS little further away from the current price. TS will be adjusted only in the direction of winning trade.It will be adjusted with each candle close. 

  • Take profit points (200). Take profit is placed immediately upon the entry. Position is liquidated either on TS or by the TP. 

 

Forex strategy rules
Strategy was tested in 1H chart of EURUSD using Breakout Scanner EA. 

 

SELL

  1. MACD histogram closed below zero. Histogram bar is bigger than previous bar.

  2. Breakout candle closed below the bottom of BB tunnel, while previous candle close occured within the tunnel.

  3. Tick volume (volumes indicator) grows on breakout candle (compared to previous candle). 

  4. Breakout candle body meets criteria for min/max size. Breakout candle must close below the low of previous candle. 

  5. We enter the trade short on bearish breakout candle close.

  6. We place TS at the BB that just got broken (bottom) + extra deviation is applied above.

  7. We close the position once price hits a TS or directly at target profit of 20 pips.  

 

BUY

  1. MACD histogram closed above zero. Histogram bar is bigger than previous bar.

  2. Breakout candle closed above the upper of BB tunnel, while previous candle close occured within the tunnel.

  3. Tick volume (volumes indicator) grows on breakout candle (compared to previous candle). 

  4. Breakout candle body meets criteria for min/max size. Breakout candle must close above the high of previous candle. 

  5. We enter the trade long on bullish breakout candle close.

  6. We place TS at the BB that just got broken (upper) - extra deviation is applied below.

  7. We close the position once price hits a TS or directly at target profit of 20 pips.  
     

Get MT4 expert advisor trading this forex strategy

 

  

For best results, use this forex strategy with one of our trusted forex brokers

(STP/ECN with MT4 bridge).

To win you must trade with broker on your side.

 

 

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.

 

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