Traders are often looking for highly precise strategies. We traders want to make money on all trades. We would like to be able to profit in all trades if possible. Trading strategies can have a high win rate but the reward-risk ratio will usually suffer.
There are traders that take a different approach. These traders are happy with a lower win rate, as long as there is a high reward-risk ratio. Most traders trade this way. Although traders may lose less than half the time, most would still make money if they were to profit.
Breakout strategies often have a high reward-risk ratio. Breakout strategies are designed to ensure that there is very little resistance after a level of support has been broken.
CMO Heiken Ashi Breakout Forex Trading Strategy allows for high reward-risk ratios. This strategy allows traders to make three times the profit than they risk by placing stop loss. Two technical indicators are used to confirm and identify a breakout that has caused momentum shift.
The traditional Japanese candlestick has become the standard. This charting is the most widely used by traders. Because Japanese candlesticks are so simple, traders love them. This allows traders to see all the details based on the bars.
Another form of charting that the Japanese invented is Heiken Ashi Candlesticks. Heiken Ashi is simply "average bars" in Japanese. Although it still uses candlesticks to show price movement, it also considers the average price movement.
Heiken Ashi Candlesticks are an indicator that modifies both the open and closed bars to show the average price movement. The candle's highs and lowest points remain constant. This allows traders to view price action based upon the highs and lowests of each candle. However, the candlestick's color can change when the average price movement reverses.
CMO, or Chande Momentum Oscillator, is a technical momentum indicator that helps to determine the direction and movement of prices.
This is done by taking the difference between all the most recent higher closes, and all the most recent lower closes. Divide the difference by the total price movement for a period. To normalize the numbers within the range of 100 to 100, the result is multiplied with 100.
The CMO is shown as an oscillator in its own indicator window. It is shown as a line moving within the range of 100 to 100. There are also markers at 50, 0 and fifty. A CMO line that pierces beyond 50 and 50 may indicate an overextended price, which could signal a trend reversal. CMO lines that are positive generally signify a bullish trend bias. CMO lines that are negative generally signify a bearish tendency bias.
This breakout strategy trades on breakouts that occur from diagonal supports or resistances. To confirm momentum, it uses the Heiken Ashi Candlesticks as well as the CMO indicator.
This strategy is best traded by traders who first identify a diagonal resistance or support line during a market contraction phase. Then, we wait for the price to break through the resistance or support line with strong momentum.
The CMO indicator will then confirm the momentum shift, based on crossing the CMO line above its midline.
Based on the color of your breakout candle, the Heiken Ashi Candlesticks will confirm that the breakout has occurred.
We then place a stop order at the high or low Heiken Ashi Candlestick breakout pattern. Price breaking the Heiken Ashi Candlestick's high or low will confirm that there is momentum. The stop entry order would then have been activated.
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Currency pairs: FX majors and minors as well as crosses
Forex Sessions: Tokyo sessions.
This strategy is a great breakout strategy. It confirms the momentum shift that has occurred since the breakout.
This strategy can be used with pattern trading. This strategy could be used to breakout from a flag pattern or reversals of wedge patterns. It can also be used to breakout from a box market congestion.
This strategy would be very beneficial to traders who can identify high probability support or resistances.
Forex Trading Strategy Installation Instructions
CMO Heiken Ashi Breakout Forex Trading Strategy combines Metatrader 4(MT4) indicator(s), and template.
This forex strategy aims to transform historical data and trading signals.
CMO Heiken Akshi Breakout Forex Trading Strategy allows you to spot patterns and peculiarities in price dynamics that are not visible to the naked eye.
This information allows traders to assume additional price movements and adjust their strategy accordingly.
Step-by-Step RoboForex Trading Account Open Guide
*Note that not all forex strategies include mq4/ex4 files. Some templates can be integrated with the MT4 indicators from the MetaTrader Platform.