ATR Breakout

[Gamma_gallus]

Good evening to all !

Here's a method I wish I could have time to trade more often, but unfortunately too often, I'm not in front of the screen when the conditions occur ..

I share it with you because it has some good potential, hope you'd like it.
Similar to Forex hard 's method with Squalou indi (consolidation zones at FF)

I've found below strategy here : http://forex-strategies-revealed.com/ad ... r-breakout - I've just fine tuned the exit criteria -


I suggest those pairs :EURUSD, GBPUSD
TF: M30

"ATR with MA" indicator gives you 2 zones : a zone of no action & a zone of action.
ATR < EMA = no action
ATR > EMA = action, we trade the breakout

Breakout is determined from the zone of no action : we draw a box starting from the HH fractal to the LL fractal (indi : i-FractalsEx.ex4 with period = 3) that we got within the no action zone.

Once we enter into the zone of action : when price goes out of the box we enter the trade.
We can re enter a second time if we got kicked out the first time (or scale in)

If there are no fractals or just one in the zone of no action (i.e. too small zone), then no trade, we wait for the next periods to happen.
If the box is too wide / big : more than 40/45 pips then no trades too, we skip and wait, chances are higher for the trade to be a looser ..

My preferred settings:

BE (plus spread) at 1 x ATR (14)

TP 1: close half at 2 x ATR (14)

TP2 : for the remainig half, we just put a JS or TS (trader's choice but I'd suggest minimum 1.5 ATR (14)) to let it lives its life ..

SL : opposite side of the box

atr_breakout.gif

Thx
Olivier

[Liam]

I have played with this idea off and on. You can use my ideas or not as you please.

The (attached) Moving Average Dynamic Envelope indicator can be used to plot ATR bands and these allow you to show the target levels on your chart. It makes it all nice and visual.

I plot 2xATR added to the high and 2xATR subtracted from the low.

Lock in profits at the 2xATR level and trail a stop after that. It seems to do ok.

The second indicator is a fractal channel (also attached.)

The ATR channel is a bit tricky so I also added a template for it.

It would be great to get a good discussion going on this method. I feel it can be improved and look forward to others ideas.

[Liam]

Here is a nice trade using this method. (chart attached.)

The fractal break occurred above the fractal channel in the ATR window of opportunity. The market moved nicely, finally forming a down fractal as the ATR crossed back under the EMA 14.

A stop just under that fractal could hold and another move up may be in the cards. Either way it is a great trade.

It is also interesting to go back and check the time of each cross over on the ATR. It gives a window that is often around 9:00 to 9:30 in which to monitor for a trade.

[Fmfx]

Thanks for the atr indi, this looks great.

Cheers

[Fmfx]

Hi Liam,

I couldn't get the ATR onto the main chart like yours (Red and Green line). I used your templates but still couldn't see it. Any ideas?

Thanks.
Regards

Here is a nice trade using this method. (chart attached.)

The fractal break occurred above the fractal channel in the ATR window of opportunity. The market moved nicely, finally forming a down fractal as the ATR crossed back under the EMA 14.

A stop just under that fractal could hold and another move up may be in the cards. Either way it is a great trade.

It is also interesting to go back and check the time of each cross over on the ATR. It gives a window that is often around 9:00 to 9:30 in which to monitor for a trade.

[beigtais]

Hi all! Just a short intro: I am lurking around here maybe 2 months. Great forum, lots of things to learn. Thanks for that.

I am doing quite similar thing. It's called "London breakout". The breakout can happen at other times too, not exactly at London open.
Timeframe M15.
So first thing I do in morning - I draw lines on top and bottom of asian session. Then I put buy stop order 10 pips above asian session high line and sell stop order 10 pips below asian session low line. Stoploss for buy stop order is set exactly where sell stop is (10 pips below the asian low line). For sell stop it's other way around.
About TP. Look how many pips high is asian session channel. Let's say it's 30 pips from high to low line. Then set 45 pip TP. We could say it's 1,5 times the asian channel size.
Then I wait for London open and quite often a breakout happens which triggers buy or sell order.
If one is a conservative trader then he should trade only in direction of thend. Breakouts often go against trend though. Simplest way to see trend is Moving average (exponential, period 360, close). If price above MA - uptrend, if price below MA - downtrend.
MPTM can be used for breakeven and other purposes here. I use it. It's good