3 Breakout Box Strategy For MT4
Please note: This strategy was publicly published in the trading community and is free to use. We do NOT make an attempt to decide if this strategy is profitable or not, because we know that the major factors regarding trading results are the skills/experience of the trader who executes the strategy. Therefore, we are mainly explaining the components and rules of the strategy. If applicable, we are highlighting advantages, disadvantages and possible improvements of the strategy.
3 Breakout Box Strategy For MT4 identifies the potential breakout of the critical levels during the major trading session. But to keep things simple, the inventor of this trading strategy, suggest us to trade during the Asian and London trading sessions only.
The system draws the potential support and resistance level and creates a simple colored box for each trading session. As the price breaks the colored box, we should be anticipating the trades.
The Breakout box of the strategy monitors the market ranges from the very beginning of the Asian session. The box lasts until the 3rd hour of the London session and looks for possible price breakouts during the early hours of the session. So, you should be expecting the trade signals forming during the 3rd hour London trading session. Furthermore, this strategy also includes an alert system that notifies you whenever a trade hits the expected level of profits.
It's more like an intraday trading strategy, so you should be looking for the trade signals in M30, H1, and H4 time frame.
Without any further delay, let's dive into the details.
3 Breakout Box Strategy For MT4 - Overview
- The Breakout Boxes: The system uses a rectangular breakout box that signifies the market range of the whole Asian session. The highs and lows of the box refer to the key breakout areas during the beginning of the London session.
It also draws horizontal support and resistance levels near to the box for avoiding false breakouts. These levels represent the final breakout level of the price by outlining the highs and lows. In short, it works more like the confirmation zone. To make things clear, let us give you a simple example.
If the price breaks above the high of the Asian breakout box then set a pending buy order above the high of the London breakout box-high.
- Daily Pivots: This indicator counts the pivot points based on the recent price movements. It shows the pivot areas using horizontal lines at the chart. These levels represent daily support/resistance levels.
By using these levels, you can identify the key breakout levels of the market. Besides, you can also determine the possible take-profit(TP) levels.
- London Box: It determines the possible breakout levels of the price during the London session. It shows you three possible exit-levels of your trades (TP1, 2 & 3) based on the support/resistance of the market trend. We recommend you to consider the TP3 level as your regular target area for maximizing the profit against the risks. Furthermore, this indicator also shows you the stop-loss levels of your trades.
Trade setups using the 3 Breakout Box Strategy For MT4
Long trade setup:
This is a 30-minute USDCHF chart showing an intraday breakout long trade setup.
In this example, we decide to go for a long trade as the price breaks above the Asian breakout box-high. Therefore, we set a pending buy order right above the London breakout resistance level at 0.91171. Place the stop loss limit below the Asian breakout box-low.
At a point, the price surge after triggering the long trade. Once the trade is executed, we do have three options to close the trade. From the start, it is better to rely on TP3 as it will give you better risk to reward ratio.
Short trade setup:
In this 30-minute chart example, the EURUSD was trading within a specific range. Therefore, we need to wait until the price moves out of the Asian-breakout-box for determining the potential London-breakout direction.
After the price breaks below the Asian-breakout-box, we decide to go for a sell order, expecting a possible bearish breakout during the London session. As per our expectation, the price breaks below the London breakout support at 1.17362. Right at that level, we have taken the short trade.
For the short trade, you may set the stop-loss limit above the Asian breakout box-high. Alternatively, you can also follow the stop loss limit mentioned in the London box. Regarding the profit target, use the TP 3 technique or set your TP to the nearest support level.
Summary:
The functions of the 3 Breakout Box Strategy For MT4 might seem a bit complex to novice traders. But they can always use the demo account and learn the proper use of a new trading system without risking a dollar. As you become skilled, you should be able to trade with real money.
Note that, everyone has to deal with the losing trades. Never expect the 3 Breakout Box Strategy For MT4 will generate 100% profitable trade signals. At times, you may have to deal with consecutive losing orders. So, always trade with a strong risk management plan.
Download the complete system description and the files here:
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