Tunnel with Box Breakout V 5 Trading System For MT4
The Tunnel with Box Breakout V 5 Trading System For MT4 is a 15-minute forex breakout scalping strategy that works during the Asian and London sessions.
Besides the regular breakout box, this system also applies the Trend Tunnel - a trendline channel for identifying the market trend and its breakout points more correctly. This system also includes a MACD oscillator for assessing the market momentum that helps to filter the trade signals for spotting quality trade setups.
Tunnel with Box Breakout V 5 Trading System for MT4 offers a simple demonstration of breakout trade setups. Therefore, traders with any level of experience will be able to master it to trade the breakouts in live markets. Furthermore, this strategy supports trading all kinds of forex currency pairs, stocks, futures, CFDs, metals, and more.
Apart from breakout trade setups, the Trend Tunnel of this system also identifies ideal trend-following trading opportunities. We’ll discuss this technique in the latter part of this article including chart examples.
In this article, we’ve briefly discussed the indicators and trading rules of the Tunnel with Box Breakout V 5 Trading System for MT4. For a better understanding, we’ve also included some chart examples showing key breakout trade-setups identified by our versatile trading system.
Tunnel with Box Breakout V 5 Trading System For MT4 - Overview
- Trend Tunnel: The Trend Tunnel has been created based on multiple moving averages from 144 to 169-periods. It works as the main trend-signal provider of this system.
The price crosses above the tunnel and uses its trendline as support means the market is in a bullish trend. For bearish trends, the price will close below the Trend Tunnel level and will treat its channel as dynamic supports.
The main objective of this indicator in this system is to guide the traders through the trend-following breakouts of the price. According to our strategy, a breakout within the trend direction carries a greater probability of success.
Since the Trend Tunnel works as a trendline, you can also use this indicator to determine the possible pullback areas of the price for making solid trend-following entries.
- Breakout Box: The breakout box of this system activates itself during the beginning of each Asian session and closes during the middle of the London session.
This box captures the highs and lows of the recent price-movements and shows potential breakout levels at its boundary area. For example, the price breaks above the high of the breakout box signals for a bullish breakout.
We’ll only pick the breakout setups which are supported by the current direction of the market trend. In this way, we’ll stick to the quality trade setups and will filter out the weak trade signals.
- MACD: The MACD works as a momentum oscillator of this breakout trading system. It shows its indicator values using the histogram bars and the signal MAs.
For a bullish confirmation of the market momentum, both MACD bars and its signal-MAs need to be positive in value. Contrarily, the bars turn negative and the signal-MA moves below the zero levels when the momentum turns bearish.
MACD oscillator also signals for the strength/weakness of the current market momentum. For example, the MACD bars in a rising pattern represents the bullish strength of the market momentum. A continuous decline of the indicator value signals for a weakness of the bullish momentum.
Trade setup examples using the Tunnel with Box Breakout V 5 Trading System For MT4
In this 15-minute EURUSD chart, the price broke above the Trend Tunnel level first. This is a basic confirmation of the possible bullish trend of the market. Besides, the MACD value also shows positive confirming the bullish momentum of the current market trend.
Because of the above bullish confirmations of the market trend, we’ve decided to go for the breakout buy only. As a result. We set a pending buy above the high of the Asian Box Breakout V5. Set the stop loss limit below the low of the box.
For buy orders, hold your trade until the MACD remains positive in value. In this example, we’ve decided to exit the buy order once the MACD value turns negative. A negative MACD during the bullish trend signals for the weakness of the current bullish momentum of the market.
In this example, we’ve applied a 15-minute GBPUSD chart to show an ideal breakout sell setup identified by our system.
Initially, the price was slowly moving within a short-range reflecting a sidelined market. However, the price bars were mostly closing below the Trend Tunnel signaling for an upcoming bearish move of the price. At a stage, the MACD value also turns negative confirming the current momentum as bearish.
After receiving the above bearish confirmations of the market momentum, we’ve directly triggered a sell order right after the price breaks out of the box’s low. Set the stop loss above the high of the breakout box.
As you can see, the price made a straight dive downwards following the bearish breakout. Hold your entry until the MACD value remains negative. In this example, we’ve closed our sell order right after the MACD value turns positive.
Alternative trend-following trade setups:
Besides the breakouts, this system can also be used to determine ideal trend-following trading opportunities. In this case, we’ll ignore the Asian Box Breakout V5 since we’re not planning for the breakout entries this time.
Instead, we’ll use the Trend Tunnel for finding the possible retracement level of the price. Also, we’ll apply the MACD for identifying the moments and directions of the market entries.
In this 15-minute GBPUSD chart, the price was initially using the Trend Tunnel as support. It means the market was in a bullish trend in that particular period.
At a point, the price broke below the Trend Tunnel area. The MACD value also turned negative at the same moment confirming the bearish trend of the market. Once a bearish trend is confirmed, we’ll wait for the price to return to the True Tunnel level.
In this example, after the bearish trend confirmation, the price visits the True Tunnel area again and rebounds downwards. It means the price is intending to rejoin its current bearish trend. Moreover, the MACD value also turns negative and keeps declining. Therefore, we trigger a sell order following a bearish bar closed right below the tunnel’s low.
We’ve used the same trick for the second sell entry. In this way, you can make multiple trade entries following the current trend direction of the market.
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