Breakout Trading Strategy

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Gerardo Bustos
734
Gerardo Bustos  

Hello forum, good day.

I'm still new to trading and MQL. I'm starting to make a Breakout EA and have a few questions regarding this trading strategy. Your help will be much appreciated!

 

1. What is the best number of bars to look back in order to determine the Support and Resistance levels? Or what is the best method to determine this highest/lowest levels for the breakout range?

2. How many points should be considered in order to get the Support, Resistance and trend lines? I guess that for the Support and Resistance with 1 point is enough, but don't know if for the trend lines I should use 2 or 3.

3. What indicators could be used in order to detect false breakouts? I've seen there is a Box Breakout indicator that uses a 5 pip range or so on top/bottom of the Resistance/Support. Is this enough to prevent false breakouts? Should I wait to see if the previous bar closes on top/bottom of the Resistance/Support to place an order?

4. Should this strategy be used with Market or Stop Orders? Or it doesn't matter which one is used?

5. What is the best timeframe for this strategy? I've seen one of the most used is H1.

6. What other signal could be used to close a trade besides the price breaking a trend line?


Best regards and thank you in advance,

Gerardo 

Widy Prasetyo
435
Widy Prasetyo  

Hi Gerardo,

I'm a breakout trader, but not really good one :) but usually i can get profit (and loss) about 30 pips for couple hours, less than a day.

1.
I don't use number of bars to determine Support, Resistance.
R/S level can be anywhere, it can be Pivot, Daily Open Price, Yesterday High-Low, Trend Channel Lines, Fibo level, etc... and it can be changed every hours.

2.
I don't understand about point, what point?

3.
To detect false breakout, I use smaller TimeFrame. The indicator is standard Stochastic.
I don't look into breakout box anymore, like PANCA EAGLE indicator or else, it just doesn't work for me.

4.
I don't use Stop Order, but I strict with TP 50 - SL 40 or 50

5.
All TimeFrame is best for me. Higher TimeFrame (H1 and up) for determine recent trend,,, smaller TimeFrame (M5-M30) to determine if trend continue or not.
It's always changing everytime.

6.
I use smaller TF with Stochastic Overbought/Oversold for closing signal.


And overall, I sit and wait for hours and hours to make single Open Position. My eyes are most indicator I depends on... I trade manual only and really glad if someone can make it as EA.

STOP USING TIMEFRAMES LOWER Indicators: Ultra - ATR ASCTrend system
Gerardo Bustos
734
Gerardo Bustos  
Widy Prasetyo:

Hi Gerardo,

I'm a breakout trader, but not really good one :) but usually i can get profit (and loss) about 30 pips for couple hours, less than a day.

1.
I don't use number of bars to determine Support, Resistance.
R/S level can be anywhere, it can be Pivot, Daily Open Price, Yesterday High-Low, Trend Channel Lines, Fibo level, etc... and it can be changed every hours.

2.
I don't understand about point, what point?

3.
To detect false breakout, I use smaller TimeFrame. The indicator is standard Stochastic.
I don't look into breakout box anymore, like PANCA EAGLE indicator or else, it just doesn't work for me.

4.
I don't use Stop Order, but I strict with TP 50 - SL 40 or 50

5.
All TimeFrame is best for me. Higher TimeFrame (H1 and up) for determine recent trend,,, smaller TimeFrame (M5-M30) to determine if trend continue or not.
It's always changing everytime.

6.
I use smaller TF with Stochastic Overbought/Oversold for closing signal.


And overall, I sit and wait for hours and hours to make single Open Position. My eyes are most indicator I depends on... I trade manual only and really glad if someone can make it as EA.

Thanks a lot for your reply Widy!! I'll try to use a combination of indicators to confirm a breakout and to identify false breakouts. :)

In question no. 2, by points I meant the highest/lowest price levels. For example, for the support and resistance consolidation/range I consider one point respectively (the lowest and the highest price in certain period), but I don't know how many points are good to consider in order to create a trend line. Lets say that there is an uptrend, and in order to determine the trend line, how many lowest prices is it best to connect and draw a diagonal line? So if price falls below that trend line, close the order for example.


Best regards,

Gerardo 

Draw diagonal line in How to draw histogram Past 2 Periods High
Widy Prasetyo
435
Widy Prasetyo  
Gerardo Bustos:

Thanks a lot for your reply Widy!! I'll try to use a combination of indicators to confirm a breakout and to identify false breakouts. :)

In question no. 2, by points I meant the highest/lowest price levels. For example, for the support and resistance consolidation/range I consider one point respectively (the lowest and the highest price in certain period), but I don't know how many points are good to consider in order to create a trend line. Lets say that there is an uptrend, and in order to determine the trend line, how many lowest prices is it best to connect and draw a diagonal line? So if price falls below that trend line, close the order for example.


Best regards,

Gerardo 

To determine Trend Line/i-Regr Channel I use attached indicator. (for MetaTrader 5)... I'm not coder so I don't know how to calculate it... maybe you can analyze by your self.
I get this free from MQL5.com , so I think it's ok to share here.

Here is my MetaTrader 5 screen looks like.
https://www.mql5.com/en/charts/3597773/usdjpy-d1-instaforex-companies-group-temp-file-screenshot-59948

These trend indicator works for me & helps me a lot to determine when breakout will happened.

Chart USDJPY, D1, 2015.06.19 08:25 UTC, InstaForex Companies Group, MetaTrader 5, Demo
Chart USDJPY, D1, 2015.06.19 08:25 UTC, InstaForex Companies Group, MetaTrader 5, Demo
  • www.mql5.com
Chart USDJPY, D1, InstaForex Companies Group: temp_file_screenshot_59948.png
Static stop loss as KG Trapping Mode Indicators: Smoother std adaptive
Gerardo Bustos
734
Gerardo Bustos  
Widy Prasetyo:

To determine Trend Line/i-Regr Channel I use attached indicator. (for MetaTrader 5)... I'm not coder so I don't know how to calculate it... maybe you can analyze by your self.
I get this free from MQL5.com , so I think it's ok to share here.

Here is my MetaTrader 5 screen looks like.
https://www.mql5.com/en/charts/3597773/usdjpy-d1-instaforex-companies-group-temp-file-screenshot-59948

These trend indicator works for me & helps me a lot to determine when breakout will happened.

Awesome! I'll take a look at the indicators you shared. :)

 

Best regards and thank you,

Gerardo 

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