Extended Breakout Channel - MetaTrader 4 Script | Forex Indicator Download - MT4/MT5 Resources - MetaTrader 5 Resources

The developer of these indicators is Arturo López of Zero Point Trading Solutions .

Who is Toby Clarabell?

Toby Crabel was a self-made millionaire commodities trader who avoided the losing years from 1991 to 2002. As a result, he wrote a great trading book titled Day Trading with Short-term Price Patterns .

What is stretching?

Stretch is the difference between the open price and the highest or lowest price, whichever is smaller, calculated by taking the absolute value of the 10-period SMA. It represents the movement/deviation of the lowest average price over a period of time relative to the opening price, and the value is used to calculate the breakout threshold session for the current trade. This can be used to draw multi-timeframe breakout channels.

Open Range Breakout (ORB) Trading Strategy

Using this strategy, the trader sets the buy stop at a price above the opening price plus the stretch and a sell stop just below the opening price minus the stretch. The first stop that is triggered allows the trader to enter the trade and the other stop becomes the protective stop.

Klaber's research shows that the earlier in the trading session, the greater the chance of a profitable trade when the entry stop is hit and closed. The current movement trading session where the market quickly starts a trend can add significant profit closings to a trader's position and should be considered for multi-day trading.

Expanding on Clarabell's findings it's clear that over time the risk increases if we don't fill early enough, and then it becomes a case of cautiously reducing position size during the day. The risk is greatest toward the end of the day when trades are full, and the riskier days later in the day when trades have been filled, the less likely a trader is to want to trade overnight.

Opening Range Breakout Preference (ORBP) Trading Strategy

The ORBP trade is a one-sided open range breakout (ORB) trade. If other technical indicators are showing a strong trend in a certain direction the trader will exercise bias for the direction in which to trade the ORB trade. A stop to open a position would be placed on the side of the trend only and if filled a protective stop would then be placed. The calculation of where to place the "stop to open" would be the same as that for the ORB trade: For longs, the Open price plus the Stretch and for shorts the Open price minus the Stretch.

Attachment download

📎Stretch.mq4 (2.62 KB)

📎StretchBreakoutChannel.mq4 (2.35 KB)

Source: MQL5 #10955