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Automated Strategies

Breakout2

Developer: FXCM

Video Tutorial (35:28)
Description

The “classic” DailyFX PLUS Trading Signals is one of the most popular resources at DailyFX. It follows six diverse strategies and highlights trading signals for 14 popular forex instruments. One of its strategies is called Breakout2.

Breakout2 is designed to perform best in market conditions where price is likely to move through an identified support or resistance level. When this happens, trading volume and price volatility often increase. Breakout2 attempts to capitalize on these situations by recommending buying or selling in the direction of the breakout.

Breakout2 filters its trades with FXCM’s proprietary Speculative Sentiment Index (SSI). FXCM’s SSI is an excellent tool to gauge trader positioning and sentiment in the forex market. Using this information allows Breakout2 to fine tune its trades, making sure that price and trader sentiment are at desirable levels.

What does this app do?

The Breakout2 Strategy is an automatic trading strategy that makes buying and selling decisions based on the trading signals generated by the “Breakout2” strategy.

Buying LOGIC

Breakout2 buys when the instrument’s price breaks above its 24-hour trading range and the SSI ratio is at or below -1.22.

Selling LOGIC

Breakout2 sells when the instrument’s price breaks below its 24-hour trading range and the SSI ratio is at or above 1.22.

Exit LOGIC

The trade size used by Breakout2 is always some multiple of five (e.g. 5k, 10k, 15k, 20k lots, etc.) because Breakout2 uses five stops and five limit orders. Each stop and limit order closes 1/5th of the trade. This exit logic technique is called “scaling out of the trade.”

The stop prices are determined by the instrument’s 24-hour high and low prices. When long, the stop price is equal to the price of the 24-hour low. When short, the stop price is equal to the price of the 24-hour high. The limit prices are determined similarly; however, the average true range (ATR) is used instead of the 24-hour high and low prices.

PARAMETERS

The following inputs are available in the strategy’s parameters window and can be defined by the app user:

  • Multiple: the trade size is always a multiple of five lots (e.g. 5 lots, 10 lots, 15 lots, etc.); this variable defines the multiple (e.g. 1 = 5 lots per trade; 2 = 10 lots per trade; 3 = 15 lots per trade; etc.)
  • Currencies: Select Yes or No to enable or disable Breakout2 on a particular currency pair. The available currency pairs include AUD/JPY, AUD/USD, CHF/JPY, EUR/AUD, EUR/CHF, EUR/JPY, EUR/USD, GBP/JPY, GBP/USD, NZD/USD, USD/CAD, USD/CHF, and USD/JPY.

Special Note: The Breakout2 strategy is able to trade on up to 13 different currency pairs at the same time. Users select which of the currency pairs to activate or deactivate for trading. Users that wish to have the Breakout2 strategy trade multiple different currency pairs only need to load the strategy once.  Currency pairs (e.g. EUR/USD) can be switched on and off from the parameters window.

Risk Disclaimer

The application displayed on this page does not take in to consideration your individual personal circumstances and trading objectives. Therefore it should not be considered as a personal recommendation or investment advice. Past performance is not indicative of future results.

Requirements

This Strategy is only compatible with FXCM Trading Station Desktop software. Additionally, an FXCM account is required (including free FXCM demo accounts).

There is no guarantee that the systems, trading techniques, trading methods, indicators will result in profits or not result in losses.

You must have Microsoft .NET Framework 4 installed on your computer. This software is included in the App's installation file.

We can customize any app to meet your trading needs. All you need to do is tell us what you’re looking for and we'll help you build the perfect trading app.