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Channel Breakout
Breakout trading is used by active investors to take a position within a trend’s early stages. Generally speaking, this strategy can be the starting point for major price moves.
What Is a Breakout? A breakout is a stock price that moves outside a defined support or resistance level with increased volume. A breakout trader enters a long position after the stock price breaks above resistance or enters a short position after the stock breaks below support.
Breakouts occur in all types of market environments. Typically, the most explosive price movements are a result of channel breakouts.
Criteria Use 55-day price channel ADX Filter : Enter trade only when ADX is rising Entry Rule BUY | On the 55-day high SELL | On the 55-day low Stop Loss For Long | 20-day low For Short | 20-day high Stop Adjustment Below/Above the last bar (When 5-day condition occurs, place the stop below/above the last bar before breakout) Exit Rule 1. Exit at market when rejection rule occures* ( Rejection Rule : If market closes below the break out level on the day of break out (DO) or hte following day (D1)) 2. Bishop | Exit at market at open when ADX is over 40 and drops by anything 3. Otherwise, let profit run until stopped out Re-entry Rule (If Stopped out) If stopped out, place re-entry order again for 55-day breakout. The purpose of this technique is to capture evey major move.
In Indicator, Golden line represent 55 day channel and white line represent 20 day channel.
Channel Breakout Channel Breakout.zip
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Category:Indicators Date:September 15, 2015
