Morning breakout forex strategy

This excellent breakout strategy targets new daily candle open (morning) to get 20 pips. According to our accurate backtest (15 years), it consistently succeeds in this task. Each entry is protected by advanced trailing stop and system is able to win in about 85 percent of trades. 85 percent of the mornings will therefore be pretty glorious for the trader. Strategy is relatively conservative and can be therefore applied on multiple pairs simultaneously to increase the results.

System was tested on high quality historical data of EURUSD (15 years). Candle model ensures that testing matches reality extremely closely. Breakout Scanner EA developed by our team was used for testing. This EA can be also used for optimization of the system for any currency pai. Breakout Scanner can also trade this forex strategy on multiple pairs simultaneously, potentially multiplying the results. Note (tested data use New York close).

 

Used tools and indicators

Following inputs were applied in daily chart (new york close) of EURUSD. To apply this forex strategy on other pairs, optimization must be done using expert advisor (Breakout Scanner EA). 

 

  • MACD trend and momentum filter (slow 200, fast 20): Identification of trend and momentum. Breakout must follow MACD indicator. 

  • Bollinger bands (period 20, deviation 1). Breakout is identified on BB tunnel. 

  • Size of the daily breakout candle (min 400 points, max 3000 points). We define breakout candle size. Previous candle must have closed within the tunnel. Breakout candle must surpass previous low/high in the direction of trend.

  • Volumes: Tick volume on breakout candle must grow compared to previous candle. 

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

  • Take profit points (200). Take profit is placed immediately upon the entry. 

 

Forex strategy rules
For best results: Optimize and apply also on other currency pairs simultaneously.

 

SELL

  1. Tested in daily chart of EURUSD (new york close).

  2. MACD histogram is closing below zero line.. MACD histogram bar is bigger than previous bar.

  3. Breakout candle closed below the bottom BB, while previous candle close occured within the BB channel.

  4. Volume grows on breakout candle, compared to previous candle. 

  5. Body of signal candle meets criteria for min/max size. 

  6. Breakout candle must also close below the low of previous candle. 

  7. We enter the trade short on daily breakout candle close.

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

  9. Closing the trade: We close the position once price hits a TS or directly at target profit. 

 

BUY

  1. MACD histogram is closing above zero line. MACD histogram bar is bigger than previous bar.

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

  3. Volume grows on breakout candle, compared to previous candle. 

  4. Body of signal candle meets criteria for min/max size. 

  5. Breakout candle must also close above the high of previous candle. 

  6. We enter the trade long on daily breakout candle close.

  7. We place TS at the upper BB that just got broken + extra deviation is applied above.

  8. Closing the trade: We close the position once price hits a TS or directly at target profit. 
     

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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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