🧭 Introduction to the Break Out Explosion Trading System
In this post, I’m going to introduce my complete Break Out Explosion trading strategy — including how buy and sell setups form, the exact entry logic, stop loss placement, and take profit methods.
I personally use this system in my manual trading, and now I want to share the full logic behind it with you.
This system focuses on breakouts of slope trendlines that align with the main market direction.
In other words, it always trades with the trend, never against it.
Let’s go step-by-step and understand how the strategy works — we’ll look at the buy and sell setups separately.
📈 How the Buy Setup Forms and Confirms
The buy setup is built on three clear stages:
1️⃣ Step 1 – Identify a Higher Low
Monitor the current market wave and detect when a new low forms above the previous low — this is known as a higher low.
Wait until this structure is confirmed and fully formed.
This is the very first step and marks a potential bullish wave starting to build.
2️⃣ Step 2 – Draw the Slope Trendline
Next, draw a downward-sloping trendline connecting the last high to the most recent low.
This trendline should represent a minor retracement — typically about 20% or more of the previous bullish wave.
Once this retracement is complete, we prepare for the final confirmation step.
3️⃣ Step 3 – Break Out Explosion
The final step is the breakout itself — this is where the system gets its name.
The breakout must happen with a momentum candle — a strong bullish candle with a large body that cleanly breaks above the slope trendline.
That’s the “explosion” — a fast, high-energy breakout that confirms bullish strength.
At this point, the buy signal is confirmed.
You can enter a buy trade once the candle closes above the trendline.
Stop Loss:
Place your stop loss below the first or second swing low.
Take Profit:
You can use a risk-to-reward ratio (e.g., 1:2 or 1:3) or set your target near upper Fair Value Gaps (FVGs) or the next resistance zone.
📉 How the Sell Setup Forms and Confirms
The sell setup follows the same logic, but in the opposite direction:
1️⃣ Step 1 – Identify a Lower High
Watch for a new high forming below the previous high, known as a lower high.
This indicates that bearish pressure is starting to build.
2️⃣ Step 2 – Draw the Slope Trendline
Now draw an upward-sloping trendline connecting the last low to the most recent high.
This minor upward retracement should cover around 20% or more of the last bearish wave.
3️⃣ Step 3 – Break Out Explosion
Finally, wait for a momentum candle to break below the slope trendline.
This candle must have a strong body and close decisively beneath the trendline — showing bearish momentum and confirming a sell signal.
Stop Loss:
Place your stop loss above the first or second swing high.
Take Profit:
Targets can be based on a fixed RR ratio, lower FVG, or the next support zone.
🧩 About the Break Out Explosion Indicator
To easily identify these setups, I’ve developed a custom indicator named Break Out Explosion.
This tool helps you automatically detect valid breakouts in real time — following all the rules of the system described above.
Symbols: EURUSD, USDJPY, GBPUSD, AUDUSD, GBPJPY, USDCHF, XAUUSD
Timeframes: M15, H1, H4, D1
Important Features:
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✅ No repaint
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✅ No lag
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✅ Direct and clean signals
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✅ Multi-confirmation logic
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✅ Built-in stop loss and take profit
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✅ Always respects risk-to-reward rules
💬 Join the Discussion
A support group is available in the MQL5 community chat.
Join our Break Out Explosion Support Group to share ideas, ask questions, or discuss your trading setups with other traders.
🔍 Summary
Break Out Explosion is a complete, rule-based trading system designed to identify powerful breakout signals that occur in the direction of the main trend.
It simplifies breakout trading by detecting minor trendline breaks that align with the larger directional movement, providing traders with high-probability, structured entries.
Each setup follows three simple steps:
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A directional wave forms.
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A retracement occurs (customizable percentage).
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A minor trendline breaks in the trend’s direction.
This system is precise, logical, and easy to apply — suitable for both new and experienced traders who value clarity and consistency in their trading decisions.
