Forex indicator Breakout settings:
Indicator Breakout – trade on the breakdown of the night flute
For many traders, it’s no secret that during the night period, namely, in the Asian trading session, the activity of the major currency pairs is significantly reduced.
Firstly, this is due to the fact that in Europe and America it is night time, therefore the main investors do not conduct their trade.
Secondly, during the Asian trading session, the Japanese yen is very active due to the peculiarity of the regional placement of the exchange, and the dollar and the euro are taking second place.
Thus, it is at night that we can observe a rather interesting picture when the price moves in a narrow range, according to all signs of technical analysis resembling a flat.
Formed borders of the night flute are quite strong levels of support and resistance, the breakdown of which always promises strong updates of the minima or maxima.
The Breakout indicator is a technical analysis tool that displays breakdown levels. The tool can be applied on any time frame or graph, because the levels are completely tied to the time frame, namely to the Asian trading session.
It is worth noting that the indicator has flexible settings, which allow a fairly strong optimization of the tool.
As already stated at the very beginning, the Breakout indicator identifies the area of the night fl ight with certain boundaries. Naturally, the strategy itself is built around breaking through these levels.
There are two options for applying this indicator, namely trading with pending orders or trading on the market. If you prefer trading with pending orders, then at the top of the border we set a pending stop buy order, and at the bottom stop stop.
Stop order must be calculated per half of the night flight range, but do not confuse and place a stop order on the middle of the range drawn by the indicator, and calculate the number of points from the moment you enter.
If you do not want to work with pending orders, the principle of working with the indicator is to open a buy position when the upper limit is broken, and also open a position for sale when the lower limit of the indicator is broken through.
In conclusion, I want to note that the Breakout indicator gives quite interesting and strong signals for the breakdown. However, it is necessary to clearly understand that one indicator is not enough for making trading decisions, so it is better to apply it with other indicators that will filter out false signals.