Trend Plus Breakout Strategy (Free Download)
Learn how the Trend Plus Breakout strategy can improve your Forex trading results during the early hours of the London session.
Introduction to Trend Plus Breakout Strategy: A Simple Guide for Forex Traders
The Trend Plus Breakout strategy is a powerful trading system inspired by the London Breakout strategy. It differs by focusing on enhancing the box size to improve trading signals. This guide will explain the workings of the Trend Plus Breakout strategy, perfect for Forex traders aiming to benefit from the market movements during the early hours of the London session.
Key Features of the Trend Plus Breakout Strategy:
- Target Market: Forex traders targeting early London session movements.
- Time Frame: Operates on a 15-minute timeframe.
- Operational Hours: Focuses on 6 to 9 AM GMT, aligning with Berlin’s early trading hours.
- Strategy Type: Manual, with trader-dependent market entry and exit decisions.
- Indicators Used: Includes trend-momentum indicators like the Trend Plus NR bar and the Trend Plus bar.
Understanding the Mechanics
The Trend Plus Breakout strategy zeroes in on a specific ‘box’ during the 6 to 9 AM GMT window. This box encapsulates the high and low price points during these hours, serving as the basis for identifying breakout points. Traders watch for the market to push beyond this range, signaling potential trading opportunities.
Components and Setup
Components of the Strategy:
- Box Formation: The box forms between 6 AM and 9 AM GMT and should align with your broker’s time using indicator settings.
- Trend-Momentum Indicators: These indicators, including the Trend Plus NR bar and the Trend Plus bar, help confirm the market trend direction.
This strategy isn’t just for Forex; you can apply it to various assets, including stocks, commodities, and cryptocurrencies. You can also adapt it across different timeframes, from one minute up to one month, depending on your trading style.
Trading Rules and Signals
When using the Trend Plus Breakout Strategy, it’s crucial to manage your trades carefully, especially around high impact news releases. Adjust your trading times to avoid periods 15 minutes before and after significant news events.
Buy Signal Guidelines:
- Candle Close: The candle must close above the upper line of the box.
- Price Position: The price should be above both the trend medium and high.
- Indicator Confirmation: Look for green signals on both the Trend Plus NR bar and the Trend Plus bar, indicating bullish momentum.
Sell Signal Guidelines:
- Candle Close: The candle must close below the lower line of the box.
- Price Position: The price should be below both the trend medium and low.
- Indicator Confirmation: Red signals on both indicators suggest bearish momentum.
Exit Strategy and Money Management
Setting a stop loss and a profit target is crucial for managing the risks and potential rewards in trading. Here’s a simple framework for your exit strategy:
- Stop Loss: Place your stop loss between 18 and 25 pips from the entry point, depending on market volatility.
- Profit Target: Aim for a profit target with at least a 1.4 ratio to your stop loss to maintain a profitable edge.
Effective money management involves mastering discipline and understanding the psychological aspects of trading. Avoid trading during low-volume periods, in exotic currency pairs, or when the market shows a wider spread than usual.
Conclusion: Maximizing Your Trading Potential
The Trend Plus Breakout strategy offers traders a structured approach to capture momentum and trends during the critical early hours of the London trading session. By integrating price breakouts with trend-momentum indicators, this strategy helps traders make informed decisions.
Before taking this strategy to live trading, it’s essential to test it thoroughly on a demo account to ensure it suits your trading preferences and risk tolerance. With diligent application and adherence to its rules, the Trend Plus Breakout strategy can become a significant tool in any trader’s arsenal, helping to navigate the complexities of the Forex market effectively.
Remember, discipline and a solid understanding of market conditions are key to making the most of the Trend Plus Breakout strategy. Free download options for this strategy can provide an accessible way for traders to start experimenting without upfront investment.
