High low channel breakout system

High low channel breakout system

Setup:

• 15 Exponential moving average of close
• 40 Simple moving average of high
•  40 simple moving average of low

40SMA of high and low forms a channel which serves to delineate the price bars in such a way that we know when to make right attempt to enter trades.

15 EMA of close is used to filter out flat spots in the price action. When the 15 EMA line is flat we do not attempt to enter any trade. The idea behind this technique is to keep us on the correct side of the market all the times.

Simple technique: if price are outside the channel, as long as the 15 EMA of close is not flat, we will attempt to enter trade either long or short.

WHENEVER PRICE IS IN THE CHANNEL WE DO NOT TRADE OR 15 EMA IS NOT FLAT OR 15 EMA IS NOT AGAINST THE DIRECTION.

LONG-WHEN PRICE ABOVE THE CHANNEL

SHORT-WHEN PRICE BELOW THE CHANNEL

click on the image to view enlarge

is it really simple? :)


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