Discussing the article: "Reimagining Classic Strategies (Part 12): EURUSD Breakout Strategy"
Hello! Why are we using moving averages of 5 and 60 periods? Wouldn't it be better to first perform optimization and select the best periods based on historical data?
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Check out the new article: Reimagining Classic Strategies (Part 12): EURUSD Breakout Strategy.
Join us today as we challenge ourselves to build a profitable break-out trading strategy in MQL5. We selected the EURUSD pair and attempted to trade price breakouts on the hourly timeframe. Our system had difficulty distinguishing between false breakouts and the beginning of true trends. We layered our system with filters intended to minimize our losses whilst increasing our gains. In the end, we successfully made our system profitable and less prone to false breakouts.
In this article, we will build a trading strategy together in MQL5. We will implement a breakout trading strategy and iteratively improve it to unlock its full potential. Let us discuss some of the specifications of our strategy.
We will focus on the EURUSD pair, and trade its movements on the H1 time frame. Our breakout strategy will first record the current high and low prices being offered on the EURUSD pair. As time passes, we will wait to see price levels open and close fully outside the channel created by the initial high and low price we recorded.
When this happens, our trading strategy will have found a bias, that the markets are likely to continue moving in a particular direction. This is not the point at which our positions are entered. We will enter our positions when our bias is confirmed. Once prices fully open and close beyond the extreme point of the candle that broke out of our initial channel, we will open long positions if we are above the channel and short positions otherwise.
Author: Gamuchirai Zororo Ndawana