Hidden Breakout Power

Hidden Breakout Power

The market has a cycle, keeps on moving from: RANGE -> BREAKOUT -> TREND ->CONSOLIDATION ->RANGE

RANGE and TREND The two major states, while the BREAKOUT refer to the short period of market breaking the range, CONSOLIDATION refer to the long consolidation of market and shrink to range. Usually oscillatory indicator performs well in RANGE states and perform poorly in trend state, while TREND indicator is the other way around, it performs will in a TREND states and but poorly in RANGE states. Therefore, identifying market states is the key to success. Overall, the BREAKOUT of market is the most dangerous and result many account explosions. Because it happens in a very short period, breakout-trader feel difficult to catch this exciting moment.

Main features

Hidden Breakout Power is a simple indicator designed to detect the market BREAKOUT. As its name, it measures the hidden power outside of the market and shown in red histogram while its value increase. When the value is high, it indicates high power is hidden outside of market and the market is ready to breakout. When the value is low, it means most of market power is within the market, long and short power are fighting each other, therefore low value does not mean low volatility of market, while high value confirms the future breakout is coming soon.

It performs will in H1 and H4 time frame.

Parameter

There is only one parameter, period, which you can choose to detect the time period for hidden power.

Recommended trading strategy

·         Select those products has large fluctuation and strong trend character, e.g. GBPUSD, USDCAD, NASDAQ, OIL, etc

·         Apply the indicator to H1 or H4 chart for any product.

·         When this histogram is shown in low value and white, do not trade, just wait patiently

·         When the histogram turns red, and its value increase , get ready for breakout strategy

·         When the histogram continues increase for long period, check your financial event calendar to confirm the event and place stop order on both side of the market

·         When the market breakout, the indicator will quickly turn to low value and white, you make close order.

·         Low value may also indicators the trend, 50% chance, it also may be large fluctuation, watch out carefully.

Please give your valuable feed back for me to improve the indicator.