Range Breakout Indicator
The Range Breakout indicator for MT4 is a simple technical analysis tool that identifies an optimal range breakout zone of the price.
Description
The Range Breakout indicator for MetaTrader 4 is a simple technical analysis trading tool that identifies an optimal range breakout zone of the price. It is a chart-friendly indicator that would come in handy to trend breakout traders.
How do you find the range breakout?
To find the range breakout of the price, you need to first identify a price range at an optimal zone, which could be price consolidation, higher highs/lows, etc. Once you’ve identified a zone, wait for the price to break it preferably with strong momentum candlesticks. Nonetheless, you don’t need to worry about finding the optimal zones because the indicator (Range Breakout) has been optimized to help you identify such zones.
The indicator comes with a green and red horizontal bar that identifies the ideal zone for a potential breakout. A break of the price above the red bar indicates a bullish signal, while a bearish signal is depicted when the price breaks below the green bar. However, it is recommended to wait for the price to retest the broken zone before taking a trade entry.
How to Trade With the Range Breakout Indicator
The above image depicts the action of the indicator on a EURJPY currency pair in the H1 time frame. It shows a detailed illustration of how to use price action in synergy with the indicator to identify a high-probability trade setup.
Firstly, the image shows that the current trend of the market is bullish (uptrend). Secondly, the indicator identified an optimal zone (the red horizontal bar) for a possible breakout, which was eventually broken by the price. Furthermore, the price returned and retested the breakout zone, which then acted as a potential resistance, suggesting the willingness of the price to trend to the upside. Finally, the price closed as a bullish candlestick, which confirms the potential bullish move and also doubles as a buy entry.
Conclusion
The Range Breakout indicator for MT4 is a suitable forex trading tool for scalper, day/intraday, and swing traders to anticipate a trade entry opportunity after a price breakout. Finally, it is free to download.