Trend Breakout Zones Forex Strategy
The Trend Breakout Zones forex strategy proves to be a reasonably robust trading strategy that can be applied to varying pairs, trading sessions and time frames.
The strategy alerts traders when to enter and exit the market, and delivers a tight stop loss.
This strategy will give you consistent home runs if you stick to its trading rules.
It also takes you through the path that minimizes losses and maximizes profits.
With sufficient practice, the Trend Breakout Zones Forex strategy can be a great way to generate profits in the forex markets.
MetaTrader4 Indicators: breakout-zones.ex4 (Inputs Variable Modified; PipsForEntry=50), trend-logic-indicator.ex4 (Inputs Variable Modified; LT_Period=21), volatility-hypertrend.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 price opens and closes above the upper boundary of the breakout-zones Metatrader 4 forex indicator (see Fig. 1.0), it is a signal to go long on the desired forex pair.
- If the trend-logic-indicator line turns green while aligning itself fairly below the candlesticks as shown on Fig. 1.0, the overall market sentiment is said to be bullish, thus a trigger to go long on the selected forex pair.
- If the thicker line of the volatility-hypertrend custom indicator turns red while intersecting the green line to align below it, price is said to be pressured higher, therefore a buy order will suffice.
Stop Loss for Buy Entry: Place stop loss 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 price closes below the lower boundary of the breakout-zones custom indicator while a bullish alert is running, price is said to be making a likely U-turn, hence an exit or take profit is recommended.
- If the trend-logic-indicator line reverts to red during the course of a bullish signal, bulls power is said to be exhausting, as such an exit or take profit is imminent.
- If the red thicker line of the volatility-hypertrend indicator changes to blue during a bullish trend, more bulls are said to be leaving the market, thus an exit or take profit will suffice.
Sell Entry Rules
Go short if the following setups gets displayed rightly on the activity chart:
- If price opens and closes below the lower boundary of the breakout-zones forex indicator (refer to Fig. 1.1), it is a signal to go short on the designated currency pair.
- If the trend-logic-indicator line turns red while positioning itself slightly above the candlesticks as exemplified on Fig. 1.1, the general market sentiment is said to be bearish, thus a trigger to go short on the forex pair of interest.
- If the thicker line of the volatility-hypertrend custom indicator turns blue while crossing the green line to align above it, price is said to be pushed lower, therefore a sell order is apt.
Stop Loss for Sell Entry: Place stop loss above resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If price closes above the upper boundary of the breakout-zones custom indicator during the course of a bearish trend, a bullish reversal is said to be looming, hence an exit or take profit is advised.
- If the trend-logic-indicator line reverts to green during the course of a bearish signal, bears power is said to be weaning, as such an exit or take profit stance is in the cards.
- If the blue thicker line of the volatility-hypertrend indicator changes to red during a bearish trend, more bears are said to be closing their positions, thus a trigger to exit or take profit at once.
Sell Trade Example
About The Trading Indicators
The breakout-zones is a technical indicator that forms support and resistance trading areas on the chart.
The trend-logic-indicator is a technical indicator that resembles the moving average line, but in its case, it is known to change the color of its line to represent current market sentiments in line with bullish/bearish trends.
The volatility-hypertrend indicator is a technical indicator that measures volatility and at the same time defines trend.
It is an indicator that is good for scalping, swing and day trading.