Channel Breakout Entry Forex Strategy

The Channel Breakout Entry Forex strategy can be a massive difference maker in your currency trading toolkit.

It is a strategy that entails taking advantage of price movement that goes in tune with the most profitable trend.

Basically, the Channel Breakout Entry Forex strategy is simply a price movement that deploys support and resistance on historical prices to validate how it’ll react going forward.

Price movement is seen to hit the outer boundaries of the channel-breakout-entry indicator (in the form of resistance or support) and will bounce back further into the channel.

Chart Setup

MetaTrader 4 Indicators: channel-breakout-entry.ex4 (Inputs Variable Modified; atr_range=28, Colors Width Modified; #0=2, #1=2, #2=2, #3=2), var-moving-average-v2.ex4 (Inputs Variable Modified; nslow=48)

Preferred Time Frame (s): 1-Minute, 5-Minute, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week

Recommended Trading Sessions: Any

Currency Pairs: Any pair

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Enter a bullish trade if the following indicator or chart pattern gets put on display:

1 If the dodger blue and dark gray lines of the channel-breakout-entry Metatrader 4 forex indicator stay somewhat below the candlesticks, while price trades along the upper outer band as shown on Fig. 1.0, price is said to be driven higher i.e. a trigger to go long on the stipulated currency pair.

  1. If the blue dotted sienna line of the var-moving-average-v2 custom indicator gets aligned fairly below the price bars as illustrated on Fig. 1.0, the overall market sentiment is said to be bullish, therefore a buy alert will suffice.

Stop Loss for Buy Entry: Place stop loss below immediate support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit from all trades if the following rules or conditions takes precedence:

  1. If the dodger blue line of the channel-breakout-entry custom indicator is seen to form above the candlesticks while a bullish signal is running, bulls power is said to be weaning, thus an exit or take profit is highly recommended.
  2. If the var-moving-average-v2 forex indicator pops up a magenta dot on the sienna line as exemplified on Fig. 1.0, bulls are said to be taking a hit, therefore an exit or take profit stance is advised.

Sell Entry Rules

Go short if the following setups gets displayed rightly on the activity chart:

1 If the dodger blue and dark gray lines of the channel-breakout-entry forex indicator align rather above the candlesticks as seen on Fig. 1.1, the general market sentiment is said to be bearish, hence a sell alert is said to be most probable.

  1. If the magenta dotted sienna line of the var-moving-average-v2 forex indicator gets aligned slightly above the candlesticks as illustrated on Fig. 1.1, bears are said to be pushing price lower, thus a sell signal is said to be looming.

Stop Loss for Sell Entry: Place stop loss above immediate resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If the dodger blue line of the channel-breakout-entry forex indicator gets displayed below the price bars during a bearish trend, bears power is said to be halting, thus an exit or take profit stance will do.
  2. If the var-moving-average-v2 forex indicator pops up a blue dot on the sienna line as depicted on Fig 1.1, bears are said to be leaving the market in their droves, thus a trigger to exit or take profit forthwith.

Sell Trade Example

Fig. 1.1

Free Download

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About The Trading Indicators

The channel-breakout-entry indicator uses the average true range indicator to validate future price characteristics as price bounces within its channel.

The var-moving-average-v2 is the modified version of the Var Moving Average Metatrader 4 Forex indicator.

It is a trend following tool designed for die-hard trend followers and it’s also quite popular among stock and commodity traders.

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