The Advantages of Breakout systems – FlexBox Indicator is price-driven with little or no lag involved and reflect the reality of the market – there are trends and periods of relative inactivity between trends during which price does not gain or lose much. Many popular strategies have been developed using boxes and breakouts (Big Ben comes to mind), in fact the trading strategy is based on daily highs and lows which is, for all practical purposes, a box.
the FlexBox indicator to take advantage of breakouts in a more flexible way without making the assumption that “boxes” form according to a predictable schedule.
The FlexBox indicator is posted below and can be used on any timeframe. First, a few thoughts on how to use it:
- Enter a trade at the close of a bar outside the box. Wait for the current bar to close completely.
- Place a stoploss at the opposite side of the box from the breakout (or add a few pips if the box has a small price range).
- Exit when the entry rule is met for a trade in the opposite direction.
The indicator is already compiled so simply copy it to your experts/indicators folder and place on the chart from there.
The user-accessible parameters are:
ROCPeriod - Boxes are formed based on an imbedded ROC indicator. The default here is 2 but I have tried values up to 5 without changing the results much - boxes just start a bit later.
BoxThreshold – This is important. After experimentation I’ve settled on a default of 12.0 but this may need to be smaller for timeframes shorter than 1 hour (which is the timeframe I recommend).
BoxMinBars – The number of bars in a box before it actually appears on the chart. Default is 3 because it works for me.
BoxColor – self-explanatory.
I have not traded live yet with this indicator but have done a lot of “eyeball” testing and feel that the indicator is interesting enough to share. I hope to learn more by reading the comments of others than I can learn by myself.
No, there is no EA yet. I’ll get to that in due course if I determine that the indicator is effective enough to be worth the effort. That’s where all of you come in…
Entry at the red arrow, exit at the red x equals 165 pips…
These trades immediately preceded the chart shown above
Download FlexBox Indicator:
FlexBox Indicator (4.7 KiB, 199 downloads)
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