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Zone Breakout Forex Trading Strategy

The zone breakout forex trading strategy is a strategy that breaks down trends into zones. It combines the Forex Analyzer Pro, Slope Direction Line and SDX-ZoneBreakout custom indicators.

Chart Setup

MetaTrader4 Indicators: Forex Analyzer Pro (default setting), Slope Direction Line.ex4 (color modified), SDX-ZoneBreakout.ex4 (default setting)

Preferred Time Frame(s): 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours

Recommended Trading Sessions: All

Currency Pairs: any

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Buy Trade Example

zone-breakout-forex-strategy

Fig. 1.0

Strategy

Long Entry Rules

Enter a buy position when the following chart or indicator patterns are in display:

  1. The Slope Direction Line custom indicator gives a general indication on the direction of the trend, as such when the color of line is blue, it indicates a bullish trend in general.
  2. If the Forex Analyzer Pro green arrow points upward and is aligned below the price bars, it means price pressure favors the upside.
  3. If price bounces off the Green support line of the SDX-ZoneBreakout custom indicator, breaching the red SDX-ZoneBreakout custom indicator resistance line, it is a move that supports a bullish trend.

Stop Loss for Long Entry: Place stop loss on S1/S2 levels of the Forex Analyzer Pro.

Exit Strategy/Take Profit for Long Entry

The following chart or indicator patterns are indicative of an exit or take profit strategy:

  1. If the Slope Direction Line custom indicator changes its color to Chartreuse, it is an indication that trend is changing, thus the need for an exit or take profit.
  2. If the Forex Analyzer Pro red downward pointing arrow forms above price bars, it indicates price reversal, thereby paving way for an exit or take profit.
  3. If price bars breaks through the green support line of the SDX-ZoneBreakout custom indicator, it indicates downward pressures and as such an exit or take profit is appropriate.

Sell Entry Rules

Place a sell entry when the following chart or indicator patterns are in display:

  1. A Chartreuse colored Slope Direction Line custom indicator indicates that the overall trend is bearish.
  2. A red colored Forex Analyzer Pro downward pointing arrow is a sign of downward price pressures, hence a sell is suitable.
  3. If price breaks below the first support level of the SDX-ZoneBreakout custom indicator, it signals a bearish continuation.

Stop Loss for Sell Entry: Place stop loss on R1/R2 levels of the Forex Analyzer Pro.

Exit Strategy/Take Profit for Sell Entry

The following rules will define our exit or take profit:

  1. If the color of the Slope Direction Line custom indicator turns blue, it signals a trend reversal.
  2. If the Forex Analyzer Pro custom indicator forms a green arrow aligned below price bars, it is an indication that price is making a U-turn, as such you should consider exiting position(s) that are live in the market.
  3. If price fails to break a support area of the SDX-ZoneBreakout custom indicator.

zone-breakout-forex-system

Fig. 1.1

Free Download

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About The Trading Indicators

The Forex Analyzer Pro is a custom indicator that defines trends by combining its red and green arrows along with plotted resistance and support levels in order to deliver critical points.

The Slope Direction Line custom is designed after the Moving Averages, making it a trend indicator. Its buy and sell triggers are signals are activated when the line changes its color as shown above.

Lastly, the SDX-ZoneBreakout custom indicator creates zones of resistance and support within the charts, thereby allowing traders know areas of continuation and reversals.