How to trade daily range breakout

This trading system does not apply any technical indicators, and it requires only daily time frame.It is in harmony with the market momentum and the set-up comes up more often than not.

My position is not just  to design a simple or complex trading system, but to come up with a methodology that converts efforts and capital to success and profits sustainably. Many traders believe that a trading system MUST be highly sophisticated for it to be powerful and profitable. I disagree.Complex systems work and simple ones do too. Moreover, both have equally been over-represented in failure as well.The market itself is simple, but traders tend to see it with complex eyes. I do see the market as simple as I equally see my life.

 

 Like I said in paragraph one, we will need to switch to daily time frame of any pair. I prefer GBPUSD and EURUSD. These are my favourite pairs.Once we are on the chart, we will carefully observe the last two days` candles excluding today`s candle.If they are in close range,then yesterday`s candle becomes our set-up bar. However, if yesterday`s candle has a range that is up to twice or more than the magnitude of the range of the candle formed two days ago, then we do not have a set-up bar.

We do not have a set-up bar

The candles above are cut out from  the daiy chart of GBPUSD. The red arrow points down on today`s candle while the blue arrow points down on yesterday`s candle. The high to low of yesterday`s candle formed on 2016/10/07 was 1.2622 to 1.1889. That is a range of 733 pips. The can formed two days ago on 2016/10/07 has a high to low of 1.2759 to 1.2601.That is a range of 158 pips. You can see that yesterday`s range   exceeded the range of the candle formed two days ago. Hence we do not have a set up bar.

We do have a set- up bar

The candles above are cut out from  the daiy chart of GBPUSD. The red arrow points down on today`s candle while the blue arrow points down on yesterday`s candle. The high to low of yesterday`s candle formed on 2016/10/10 was 1.2441 to 1.2344. That is a range of 97 pips. The candle formed two days ago on 2016/10/07  has a high to low of 1.2622 to 1.1889. That is a range of 733 pips.You can see that yesterday`s range is less than the range of the candle formed two days ago. Hence we do  have a set up bar.

Now that we have a set-up bar today the 2016/10/11, then we will place pending buy 10 pips above yesterday`s candle and at the same time place pending sell 10 pips below yesterday`s low. The stop loss for buy is 10 pips below yesterday`s low while the stop loss for sell is 10 pips above yesterday`s high. The take profit should be twice the value of the stop loss with a trailing stop of half the value of the stop loss.You may please forward your question or leave a comment. I am the author of this blog. I can write for you on your forex blog too for a token.