17# Range Breakout Trading System

Range Breakout

Submit by Joy22

 

Time Frame: 15 or Higher

Currency Pair: All.

 

Indicators:

5EMA,

34EMA

MACD (12,26, 9)

We need to determine the highest and lowest levels of a range. For this

we need at least one extreme point for each level and, for drawing lines

of Support & Resistance, we need at least two points.

Point 1 is at 0,7821 and point two is at 0,7815. By drawing a line at the

123.50 level (the higher of the two), we have determined the upper

level of the range.Point 3 is at 0,7799 and point 4 is at 0,7798. We use the 0,7798 level accordingly, being the lower of the two, and draw a trend line.

 

 

In the picture below Range Breakout Trading System in action.

Entry Long:

We should wait until a one candle/bar closes above the Resistance;

5EMA >34EMA;

MACD>0.

Entry Short:

We should wait until a one candle/bar closes below the Support;

5EMA <34EMA;

MACD<0.

 

RE-Entry:

The pullback didn’t extend beyond either the 5 or 34EMA levels.

2. During the pullback, the MACD remained negative.


To clarify, the market moved up after a strong downward movement

creating the first white (bullish) candle – it indicates the beginning of

the pullback.

After that, a second white (bullish) candle was formed, followed by a

black (bearish) candle.

All this occurred while price remained below both the 5 and 34EMAs and

with the MACD in the negative zone, as shown on the following chart.

Stop Orders:

There are many methods for trading breakouts; the most widely used is

to place Stop orders at levels 3-5 pips above and below the defined

range levels, however, we have our own approach.

For Re-Entry stops is 10 pips above or below 34EMA.

 

Profit Target:

1/5 Ratio. Example if stop lossis 20 pips the profit target is 30 pips.

 

Before using this method, pratice at  draw the range  and test it !

 

Share your opinion, can help everyone to understand the forex strategy.

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Comments: 1
  • #1

    bhavesh (Monday, 20 June 2016 21:39)

    download

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