The RSI Breakout Forex strategy is a trading system designed to offer much more reliable and stable performance.
The strategy involves price action analysis which will assist you to make amazing trade entries and exits.
This strategy allows traders gauge continuation breakout (when price continues to move in the same direction), and reversal breakout (when price reverses in the opposite direction).
The Breakout RSI indicator used in this strategy specifies an upper and lower breakout levels that gets labelled “Breakout Long” and “Breakout Short” respectively.
MetaTrader4 Indicators: breakout-rsi-indicator.ex4 (Default Setting), mega-trend-indicator.ex4 (Default Setting), octopus.ex4 (Default Setting)
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
Buy Trade Example
Long Entry Rules
Enter a bullish trade if the following indicator or chart pattern gets put on display:
- If the line of the mega-trend-indicator turns blue while staying fairly below the candlesticks as shown on Fig. 1.0, price is said to be pushed higher, i.e. a trigger to go long on the designated forex pair.
- If the octopus indicator displays green bars within its window (refer to Fig. 1.0), the general market sentiment is said to be bullish, as such a buy alert will do.
- A buy signal is established following rules 1 & 2 when price breaks above the “Breakout Long” level as indicated by the breakout-rsi-indicator on the upper left side of the screen.
Stop Loss for Buy Entry: Place stop loss 3 pips below support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit from all trades if the following rules or conditions takes precedence:
- If the line of the mega-trend-indicator turns red while a bullish trend is ongoing, it is pointing to a possible exhaustion in the current trend, therefore an exit or take profit is recommended.
- If the octopus forex indicator pops up a red vertical bar within its window while a bullish trend is running, bulls’ power is said to be halting i.e. a trigger to exit or take profit forthwith.
- If the breakout-rsi-indicator pops up a sell signal, by displaying “Trending Down” on the upper left hand corner of the screen, it is a trigger to exit or take profit straightaway.
Sell Entry Rules
Go short if the following setups gets displayed rightly on the activity chart:
- If the line of the mega-trend-indicator turns red while staying somewhat above the candlesticks as seen on Fig. 1.1, price is said to be pressured lower i.e. a trigger to go short on the selected forex pair.
- If the octopus Metatrader 4 forex indicator pops up red bars within its window (see Fig. 1.1), the overall market sentiment is said to be bearish, and therefore, a sell alert will suffice.
- A sell signal is confirmed following rules 1 & 2 when price falls below the “Breakout Short” level as indicated by the breakout-rsi-indicator on the upper left side of the screen.
Stop Loss for Sell Entry: Place stop loss 3 pips above resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If the line of the mega-trend-indicator turns blue during the course of a bearish trend, it is indicative of a possible reversal, as such an exit or take profit is advised.
- If the octopus custom indicator pops up a green vertical bar within its window while a bearish signal is underway, bears power is said to be weaning i.e. a trigger to exit or take profit at once.
- If the breakout-rsi-indicator pops up a bullish signal, by indicating “Trending Up” on the upper left hand corner of the screen, it is a trigger to exit or take profit immediately.
Sell Trade Example
About The Trading Indicators
The breakout-rsi-indicator is a modified relative strength indicator that triggers buy and sell signals on the premise of an oversold and overbought market conditions respectively.
The mega-trend-indicator is an enhanced Hull Moving Average indicator set to a default period of 144.
It does attempt to eliminate lag altogether while also enhancing smoothing.
The octopus indicator is a trend indicator that forms bars or histograms within its main window.
Green bars are indicative of a buy signal, while red bars indicates a sell signal.