Fibonacci Box Breakout 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.
The Fibonacci Box Breakout Strategy For MT4 spots the pullback areas in a trending market and plots the breakout trade setups within the trend direction of the market.
This strategy applies the Fibo Box V2.1 for capturing the price retracement levels. Besides, it uses the Daily Forex Pivot indicator to show the possible target levels of the price following the breakouts. Also, it includes the Symbol Changer Profit Display V3 that allows you to access any forex currency pair chart from its indicator panel.
Fibonacci Box Breakout Strategy for MT4 is a forex breakout trading system that tries to identify short-term price moves. According to the inventor, it works best when applied in a 15-minute (M15) timeframe chart within the MT4 trading platform. The inventor says, that this breakout scalping strategy can be applied to trade all kinds of forex currency pairs available in the live markets.
But please note, that the spread (the costs of trading) should be relatively tight because of the low time frame (M15) because you can only expect relatively small price moves.
According to our observation, this strategy offers quite a simple chart demonstration of the potential breakout trade setups. Also, it includes a few easy trading rules.
After reading this guide, you’ll learn how to apply the Fibonacci Box Breakout Strategy for MT4 to spot breakout trade setups. Also, we’ve included some chart examples with trade setups showing how it works.
Overview of The Fibonacci Box Breakout Strategy For MT4
- Fibo Box V2.1: It is the latest version of the Fibo Breakout Box - used to capture the market ranges at the retracement zone of the price.
This indicator helps traders to buy from the swing-low and sell from the swing-high of a market trend.
The Fibo Box activates itself during the Asian session of the market. This indicator automatically captures the market range during the retracement or pullback period of the price trend. The high and low of the Fibo Box work possible breakout buy and sell levels during the London session of the market.
Also, you can use the breakout levels for determining the stop loss areas of your breakout trade entries. For example, if you activate a breakout buy order then simply place the stop loss limit below the FiboBox low.
According to the rules of this strategy, the standard profit target of Fibo Box trades is 1:2. This means you should target a double profit compared to the stop-loss budget of the trade entries. For example, if your budgeted risk is 50 pips for a trade then your minimum profit target needs to be placed at 100 pips.
Once your trade achieves a 1R profit simply bring the stop-loss limit to breakeven for greater safety.
- Daily Forex Pivots: The Daily Forex Pivots calculates the market pivots based on the recent changes in price-actions. It shows the pivot levels of the price using horizontal lines at the main chart window.
The pivot levels work as key support and resistance areas of the market - especially when the price moves in a single trend direction. These support/resistance levels help traders to project the possible target areas of the price.
Trend-following traders consider the daily pivot levels as the possible pullback trade-entry areas of the market. Alternatively, when the price breaks a pivot level following the trend direction represents a continuation signal of the current market trend.
If you find the price roaming in between two pivot levels for a while then consider the market as sidelined.
- Symbol Changer Profit Display V3: This indicator allows you to directly switch to any currency pair chart within a second. Simply click on the currency pair symbol you want to watch and it’ll instantly take you there.
The Symbol Changer Profit Display is quite a useful tool for traders who wish to look for possible breakout trade opportunities across multiple currency pair charts at a time. If you enlarge its indicator window, you’ll find almost all the currency pair symbols available in the market. Besides the currency pairs, it also allows you to switch to any timeframe chart available in the MT4 trading platform.
Chart Example of Breakout Buy Setup Using The Fibonacci Box Breakout Strategy For MT4
This example represents a short-term EURUSD breakout buy opportunity identified by our Fibonacci breakout strategy.
As we can see, initially, the price was moving in a sideways direction. Later, during the Asian session, the Fibo Box appears while the price continues to squeeze its movements.
During the beginning of the London session, the price finally breaks above the Fibo Box-high. Consequently, we activate a buy order at 1.1812 following the bullish breakout of the price. Here, we set the stop loss limit below the low of the Fibo Box (15 pips).
According to the rules of this strategy, we set the take-profit level at 30 pips - a 2R profit compared to our budgeted risk.
The price makes a huge bullish move following the price breakout and eventually hits the profit target at 1.1842.
Chart Example of Breakout Sell Setup Using The Fibonacci Box Breakout Strategy For MT4
In this example, we apply a 15-minute GBPUSD chart for demonstrating an ideal breakout sell setup following a bearish breakout of the price at the Fibo Box level.
According to this chart, the price makes several attempts to break above the pivot resistance at 1.3396 but failed at the end. Instead, the price rebounds downwards and approaches near the Fibo Box-low.
At the beginning of the London session, the price breaks below the low of the Fibo Box. So, we activate a sell order following the bearish breakout of the price at 1.3380. Also, we set the stop-loss limit above the Fibo Box-high 20 pips. Therefore, our minimum target for this breakout sell order is 40 pips.
Later, the price continues its downtrend move following the bearish breakout at the Fibo zone. Eventually, we exit the trade at 1.3340 making a 2R profit compared to our budgeted risk.
Please note: Try this strategy on a demo account first before you use it on a real money account. When you feel comfortable after a few weeks then you can switch to a real money account. On a real money account we suggest that you risk only between 0.5% and 2% per trade.
Download the complete system description and the files here:
Partially Automated Trading Besides Your Day Job
Alerts In Real-Time When Divergences Occur
