London Open Box Breakout 4 Trading System For MT4
The London Open Box Breakout 4 Trading System For MT4 is a short-term trend-following forex scalping strategy. It works on finding the key breakout points of the market ranges during the London session of the market.
This system supports trading all kinds of forex currency pairs in the financial markets. Besides, it uses a very simple technique to demonstrate the breakout signals so that everybody can follow its trade setups.
It applies the London Session breakout boxes and buy-sell zone fibs for finding the best possible places to trigger the breakout entries. Besides, it also applies the FX Fish-mod in two different parameters to determine the trend condition of the market as correctly as possible.
London Open Box Breakout 4 Trading System for MT4 works well when applied in between 15 to 30-minute timeframe charts. So, both short-term and intraday breakout traders can be benefited from its trade setups with a higher probability of success. Furthermore, it also plots text signals around the price candles guiding you through the entry to exit levels of each trade opportunity.
In this guide, we’ve briefly discussed the trading method of the London Open Box Breakout 4 Trading System for MT4. We’ve also included some chart examples of its trade setups including explanations of its trading rules.
London Open Box Breakout 4 Trading System For MT4 - Overview
- Breakout Box: This system applies a breakout box during the London Session showing the recent highs and lows of the current market-range. Each time the price breaks out of the box represents a potential breakout opportunity.
This indicator also plots horizontal support/resistance levels above and below the breakout box. These levels represent the potential breakout areas of the current market trend.
Once a breakout is confirmed, we need to check the trend-condition of the price as well. Because trading the breakouts within the direction of the market trends carries a greater probability of success.
- Buy & Sell Zone Fibs: The buy zone fibs represents a 55-day MA-high and the Sell Zone a 55-day MA-low. Being together, these levels plot a dynamic trend channel that defines the trend-reversal points of the market.
Besides, it also helps you to determine the current condition of the market trend depending on the position of the price above or below the trend-channel. For example, in case of a bullish trend, the price will mostly remain above the Buy Zone Fibs. Contrarily, the price uses the Sell Zone Fibs as resistance when the trend turns bearish.
As a trendline-channel, it helps you to filter the breakout trade setups plotted by the breakout box of the system. For example, we’ll not activate a breakout buy order until the price remains below the buy & sell zone fibs levels.
- FX Fish-mod (10 & 25-Periods): Both FX Fish 10 and 25-periods are applied as a trend oscillator of the system. These tools measure the strength and weaknesses of market momentums.
Both oscillators work in the same manner for plotting the trend signals. The FX Fish-mod bars turn green when its value becomes positive signaling the bullish momentum of the market. On the other hand, its bars turn red carrying a negative value when the momentum turns bearish.
The green bars in a rising pattern signals for greater strength of the bullish market trend. Oppositely, the bars turn red and its value keeps declining when the market is in full control of the bearish trend.
The 10-period FX Fish-mod works on finding short-term market momentums. On the other hand, the FX Fish-mod of 25-periods analyzes the intraday conditions of the market trend. For greater confirmations, both oscillators should be signaling for the same trend direction at the same time.
The FX Fish-mod also signals for the overbought/oversold conditions of the market. Its value rises above the 0.5 level when the market is in an overbought condition. Contrarily, the value drops below the -0.5 level for signaling an oversold market.
Chart example of trade setups using the London Open Box Breakout 4 Trading System For MT4
In this example, we’ve applied a 15-minute USDCHF chart for showing a breakout buy setup during the London session.
Initially, the price moving within a short-range below the Buy-Sell Zone Fibs channel. The breakout box of the system automatically captures the market range. It also draws the possible breakout-points using the horizontal support/resistance levels at the low and high of the box.
The FX Fish-mod’s value already turns positive showing green bars. It is an early signal of a possible bullish move of the market trend. Therefore, we set a pending buy order at the breakout resistance level. Set the stop loss limit below the breakout support area.
At one stage, the price breaks out of the box’s high also moves above the Buy Zone Fibs level confirming the trend as bullish. As you can see, the price has made a huge bullish move following the buy order at the breakout point.
In this example, we’ve closed the buy order when the FX Fish-mod oscillator’s bars turn red at the same moment. This system also shows potential trade-exit levels by plotting text-format signals at the main chart window. Those exit signals work better when you’re scalping in a highly volatile market.
In this 30-minute AUDUSD chart, the price was already roaming below the Buy-Sell Zone Fibs channel. It is a primary signal of a possible bearish trend. However, the price attempted to break above the Buy Zone Fibs twice but failed.
Instead, the price is rejected to move above the breakout resistance area and went below the Sell Zone Fibs level. It means the price is respecting the current trendline channel as resistance. Finally, both FX Fish-mod oscillator’s bars turn red confirming the bearish trend of the market.
After we get all the above confirmations, we activate the sell order at the break of the breakouts support level. Set the stop loss limit above the high of the breakout box. In this example, we’ve decided to exit the sell order once both FX Fish-mod bars turn green at the same time.
Download the complete system description and the files here: