The Breakout Box Indicator MT5 is something that can be used for traders who prefer to trade breakouts.
A breakout occurs when prices are in consolidation and then break out from this range.
The Breakout Box Indicator works only on the MT5 trading platform and it plots the boxes within the ranges specified whenever the market confirms to it.
When to go long using the Breakout Box Indicator MT5?
Firstly, wait for the breakout box pattern to appear. This can be done based on your settings. Then, once price closes outside to the upside, then initiate a long position after this happens.
When to exit your long positions?
Exit your long position with at least one is to two risk reward set up.
This will ensure that you make consistent profits over time.
Alternately, simply wait for the next consolidation to appear and then book your profits.
When to short using the Breakout Box Indicator?
Wait for the breakout box to appear and then wait for prices to breakout to the downside.
Then after the first candlestick that closes below the breakout box, initiate a short position at market.
When to exit your short positions?
Ideally, set your profits to a 1:2 risk-reward level.
You can also extend this to a 1:3 risk-reward as well.
Alternately, keep an open position until you see the next breakout box appearing.
Where to set the stop loss using the Breakout Box Indicator?
For long positions, set your stop loss to the lower level of the breakout box.
Alternately, for short positions set your stop loss to the upper end of the breakout box.
Conclusion
The Breakout Box Indicator is ideally suited for traders who prefer to trade intraday.
The breakout box, depending on the settings can work on lower timeframes but can also be applied to higher timeframes such as daily or weekly charts.
How to Increase Your Winning Ratio with the Breakout Box Indicator MT5?
When you add the Stochastic Cross Alert Indicator and use it together with a proven trend trading system like the Elite Swing Trader or Simple Trend Trading System, you can only expect to achieve a better win ratio and better risk-reward ratio.
Recommended Time Frames
Technically speaking, you can use this MT5 indicator for all time frames.
However, the shorter the time frame, you will see more fluctuation and possibly more whipsaw which may cause small losses that can eat up your portfolio quickly.
We recommend that you use higher time frames like the H4 or even higher for better consistency.
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