A Little Breakout Here and There

This thread is dedicated to an idea of breakout that I have had in mind but that I never came to operate seriously. I think it would fit beautifully with automatic systems, but unfortunately I do not have programming skills to develop it more. It looks quite like a Donchian-style breakout. The basic rules are like this: Long: if the closing of the current candle is above the maximum of the previous 2 candles, you enter by breaking this candle. Short: if the closing of the current candle is below the minimum of the previous 2 candles, you enter by breaking this candle. If the operation does not run on the next candle, it is cancelled. Take Profit and Stop Loss: both are defined according to the value of the ATR(50

In the second example above, you can see that according to the rules, breakouts 1, 4, 5, 6 and 7 were valid and would have reached at least 1x the ATR. Breakouts 2 and 3 were not activated in the sail immediately afterwards and were therefore cancelled.

Obviously there will be losses, especially in times of consolidation, but the beauty of this method is that breakout acts as a filter and can place you right at the beginning of large movements, where several good operations can be chained. I invite everyone to backtest this and experience, especially with the temporalities, the best moments of the day to enter, and the placement of stop and target.

Live operation, see how it goes.

It's quite interesting the method... well done... I like it.

Thank you.

Simple mechanical system that doesn�t need interpretation, I think it has a lot of potential. In the long run it probably has less than 50% of successes, which is why it takes a lot of discipline and a good risk-benefit ratio. When you test it in demo, you could use an operations copier and set up several accounts to test different RRs using ATR. Monitor your success rate and RR, and I�m sure it can work. I�ll give you a graph of how much you need to earn according to your RR to stay in break even. For example, with a RR of 1:2 you need to earn only 34% to not lose money. Something to keep in mind.

Live operation on AUD/USD.

Thank you. Dear generous coders, please, can anyone make an indicator for these signals? Greetings.

That's why I'm open to any suggestion to refine it, reduce losses and make the most of it.

This code should give you a visual representation of what you propose (without the ATR part)

I'm going to try the strategy next week (with small positions for now

Here's another example... long in GBP/JPY this time. I know this is all with Monday's diary, but the strategy seems promising and the best thing is its simplicity. It could have been all long pending orders, assuming an upward direction around the green zone I marked. I used a kind of backsliding of a previous third sail to look for tickets with better price. 8 trades would have been activated, some might have left runners after taking part. If there is interest, maybe some live on Monday.

Sure, go ahead.

This looks very interesting, thank you!

Thank you Singua, does this just mark where every breakout happens?

Can this be used for scalping?

Simple method... you have to explore it more... I like it.

I have two long pending orders at this time (there may be more signs according to the price

Yesterday nothing was activated, but today two out of three. NZD/USD left without me, but my levels are still valid, so the orders are still on. I�ve changed to H4 for now, easier to follow every four hours. In GBP/USD I have several long orders pending. One is already in play. We�ll see if the others are activated. I keep developing my version of the system, but I think the HP concept is pretty solid, as long as the direction is well determined. Clearly there will be losses, but using pending orders in value levels can improve the result quite much. Yes, sometimes you don�t activate an entry and the price goes away, but that�s not losing, there was simply no operation. If no one else participates, I won�t keep sharing either.

Hello, thank you very much for your contribution. I am interested to know what SL and TP you are using on H4. Do you use any additional filters? I have been working on another system these days using fractals and I think they could be combined with the main focus of this thread.

The truth is that I find it hard to understand how some people still don�t apply something as basic as a trend filter. You can have the best strategy on the planet, but if you operate against the current, all you can do is sink faster. I�ve been applying this technique with a 50 EMA filter and the change has been brutal. Signs are still the same, but the success rate has skyrocketed. I don�t understand why you don�t talk about this here anymore.

I have tried the pattern in exotic pairs and, surprisingly, the behavior is much cleaner than in majors. I guess having less manipulation, the breaks are more genuine. Yes, you have to adjust the ATR because the volatility in these pairs is beast. If someone else has tested them, I am very interested in sharing experiences and results.

If someone else says that this system is too simple to work, I'm going to start thinking that they haven't tried anything in their life. Simple doesn't mean bad, it means replicable, and that's what makes the difference. I'm getting more stable results than any triple confirmation indicator I've ever used.

One idea I'm exploring is to add a confirmation rule with volume. I know the volume in forex is relative, but even in retail broker data there are certain peaks that can serve. I filtered some signals with a simple volume greater than the average of the last 20 candles and curiously the false breaks decrease.

Some are obsessed with looking for the perfect setup. Spoiler: it doesn't exist. This isn't going to guess, it's going to be probabilities. With a system like this, if you have a minimal advantage and you run it without hesitation, you're already ahead of 90% of the market.

I've been operating alone for four weeks with this strategy in H1 with EUR/USD and USD/JPY. In total, 41 operations with 61% hits and an average RR of 1:1.6. It's not magic, but it's consistent. And that's just what I want. I'm not looking for a holy grail, I'm looking for a system that doesn't explode in my face after 10 trades.

Does it really have to be said that the ATR has to be adapted to temporality? I�ve seen one out there using the ATR(50

I am testing a variant where instead of entering the break of the candle, an early entry is made if the closing is very close to the end. Increases the profit ratio, but also raises the error rate. The good thing is that by putting an active stop management, the losses are reduced quite much. Even in testing phase, but it looks promising.

Hey, thanks to those of you who are bringing ideas. It�s noticeable that there�s a desire to build something useful here. I�m taking note of every variant you propose to make a general summary when I have at least 100 registered operations.

Am I the only one who thinks that entering right into the opening of the next candle is like going by bike blindfolded? I prefer to use a limit order slightly lower/above the closing and let the price give me better entry. Not all are activated, but those that do, usually go straight to the target.

Someone asked why I only use older couples because they have more liquidity, less spreads and less scares. Let�s see, if you want adrenaline, operate NOK/SEK, but don�t come crying when you skip the stop for a 12-pipe spread.

I'm seriously considering automating this system with a basic script. You don't need a complicated EA, just reading the logic of the closures and running the command with TP and SL according to the ATR. For those who don't know how to program, using something like Pine Script in TradingView could be the perfect starting point. I leave the idea there.

The problem for many here is that they think of the individual trade as if it were the whole. No, friend. This is about how the system behaves after 100 trades. A system that loses 4 in a row and wins 5� with twice the profit is profitable. But of course, that requires discipline, not impulsivity.

I am integrating this with a London Breakout approach. I only operate breaks within two hours of the opening of London. It seems to improve the quality of signals, especially in pairs such as GBP/USD and EUR/JPY. We will continue testing.

If someone wants to contribute, do it with data, not with empty opinions. I think it doesn�t work because it�s very simple it�s not worth it. Bring your Excel, your captures and your results. If not, you better keep looking.

I put in a rule where I only operate if the breaker candle has more than 50% body (not counting fuses)

What if this is only used on Mondays and Wednesdays? I have noticed that breaks in those days tend to be cleaner. Fridays and Tuesdays are no man�s land. If anyone has tried it, let them say something.

I know some people don�t like to get complicated, but I�m thinking of including a 20-period moving average to avoid taking trades against trend. It would be a simple thing: if the price is above, only long. If it�s below, only short. Trades are lost, but many crazy things are also avoided.

I don't know who needs to hear this, but backtest visual is NOT real backtest. If you haven't tested this with historical data and managed tickets as if it were live, your results are worth the same as an air coin.