It is dangerous to follow the herd and try to jump in on the market when there’s extreme volatility, but usually the prospects of a breakout becomes more likely under such conditions.
It is therefore crucial to position oneself in a manner that allows you take advantage of such market breaks.
The New Cloud MACD breakout forex trading strategy is all about breakout trading, and is able to tell you when you’re on the wrong side of the trade, hence you can lower your losses more fast.
The used indicators are duly tweaked to offer some of the best price breakout setups.
MetaTrader4 Indicators: ForexCloud.ex4 (Inputs Variable Modified; TimeFrame=H4), newMACD.ex4 (Default Setting)
Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute, 30-Minute, 1-Hour, 4-Hour, 1-Day
Recommended Trading Sessions: Any
Currency Pairs: Any pair
Buy Trade Example
Long Entry Rules
Initiate a buy entry if the following indicator or chart pattern gets put on display:
- If price breaks above the lime cloud of the ForexCloud custom indicator as seen on Fig. 1.0, an imminent price breakout is said to be looming, as such a trigger to go long will suffice.
- If the blue line of the newMACD custom indicator breaks above the 0.00 level as depicted on Fig. 1.0, the general sentiment in the market is said to be bullish, hence a buy alert will do.
Stop Loss for Buy Entry: Place stop loss 3 pips below support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit if the following rules or conditions takes precedence:
- If while a bullish trend is ongoing, price bar opens and closes below the cloud of the ForexCloud custom MT4 indicator, it is a signal to exit or take profit on the currency pair of focus.
- If the blue line of the newMACD custom indicator dips below the 0.00 signal level as illustrated on Fig. 1.0, it is an indication of weaning bulls power, as such an exit or take profit is recommended.
Sell Entry Rules
Enter a sell order if the following holds true:
- If price breaks below the red cloud of the ForexCloud custom indicator as shown on Fig. 1.1, an impending downward price breakout is said to be forthcoming, hence a signal to sell the designated fx pair.
- If the blue line of the newMACD custom indicator dips below the 0.00 (see Fig. 1.1), the overall market sentiment is said to be bearish, hence a trigger to sell currency pair of interest.
Stop Loss for Sell Entry: Place stop loss 3 pips above resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If while a bearish trend is running, price bar opens and closes above the cloud of the ForexCloud custom MT4 indicator (check Fig. 1.1), it is a signal to exit or take profit on the selected currency pair.
- If the blue line of the newMACD custom indicator surges above the 0.00 signal level as depicted on Fig. 1.1, it is an indication of halting bears power, as such an exit or take profit is advised.
Sell Trade Example
About The Trading Indicators
The ForexCloud resembles a cloud the way it sits itself above or below price bars, offering an overall market direction.
When the cloud is red and sits above price bars, it denotes a bearish trend, while it denotes a bullish trend when it is green and sits below price bars.
The newMACD is a custom built Moving Average convergence divergence indicator that gauges changes in price trend.