The Stretch Breakout Channel MT4 Indicator by Toby Crabel
The Stretch Breakout Channel MT4 indicator is a technical indicator based on the opening range breakout strategy developed by famous technical analyst and author Toby Crabel. To define this strategy, we’re basically looking at the high and low price level for a given period of time and usually, that period of time starts at the opening of a new trading day or at the opening of a new trading session. There are different variations of that time period, but the most common used is the 10-minute opening ranges, but depending on what type of trader you’re, you can use even longer opening ranges.
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You also have to correlate that period with the currency pair you’re trading because the opening range is using the discovery time. The basic premise is that your bias for trading a currency pair is determined by where the currency pair is trading relative to the opening range. So while this discovery is going on the bias of the market can be determined when it breaks out of that range. So, we’re looking for that high and low of that discovery period and when we break out of that range we can form a bias.
The Stretch of the opening range is calculated by using a 10 period simple moving average of the difference between the opening price and either the high or the low, depending on which one is smaller. In essence, that value represents the minimum average price deviation calculated from the opening price and during a given period of time.
Stretch Breakout Channel MT4 Indicator Settings
The preferred settings for the Stretch Breakout Channel MT4 indicator are the default settings. The indicator has only one variable the Stretch period or the “StPeriod” that has assigned by default a 10-period value. This can be adjusted to your own needs and to your preferred style of trading.
Stretch Breakout Channel MT4 Indicator Strategy and Trading Rules
The Stretch Breakout Channel strategy can be used at the opening of all the major trading sessions like the London, New York and Tokyo session. This is a daytrading scalping strategy designed for the short-term trader that wants to take advantage of the usual breakout move that happens during the London and New York session. It’s not a secret that the smart money that operates in the Forex market and the big order flow comes on the market around the opening of the trading session, which is the time we want to be an active participant. Without further ado, these are the buy/sell trading rules of the Stretch Breakout Channel strategy:
- Buy Signal: Buy at the market 10 minutes after the London open (or New York open) if the price is above the red line, using a protective stop loss order 5 pips below the Stretch line and take profit once the market moves 15 pips in your favor.
- Sell Signal: Sell at the market 10 minutes after the London open (or New York open) if the price is below the red line, using a protective stop loss order 5 pips above the Stretch line and take profit once the market moves 15 pips in your favor.
Long and Short Trade Example
In the chart above, we have the EUR/USD 5-minute chart and a long trading opportunity is highlighted during the opening of the London session. Below we have the GBP/USD 5-minute chart and this time a short trading opportunity is highlighted during the opening of the New York session.
The Stretch Breakout Channel strategy only requires you to put 10-minute of effort at the opening of the major trading sessions. It’s a very handy strategy for the part-time traders who don’t do this as a full-time job. At the same time, the Stretch Breakout Channel can be a great tool to use if you want to trail your SL.
Recommended Time Frames Stretch Breakout Channel MT4 Indicator
Technically speaking, you can use this MT4 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 4H for better consistency.
Stretch Breakout Channel MT4 Indicator Download
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