Channel Breakout Strategy Indicator | Indicator Series

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Every trader wants to make money from their investments. If you want the best opportunity for that, then it’s important to have the right trading tools at your disposal. Well, there are over 200 tools on the market and you need to know what works for you.  In this article, we’ll take a look at one of those – Channel BreakOut Strategy Indicator.

What Is the Channel BreakOut Strategy Indicator?

The Channel BreakOut Strategy Indicator is a trading tool that identifies channel breakouts. The strategy aims to generate long-term positions when the price breaks outside of an established trading channel. When the price breaks out of the upper or lower line, it signals that a new directional move has started – up or down. (Try out indicators on Tradingview.com)

Key Features of Channel Breakout Strategy Indicator

  • It is based on channel breakouts.
  • It displays two lines, top border and bottom border
  • It generates long-term positions
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How Channel Breakout Strategy Indicator Works

  • The Channel BreakOut Strategy Indicator’s goal is to identify channel breakouts and generate long-term positions.
  • When price breaks out of an established trading channel, it signals that a new directional move has started – up or down.
  • The indicator displays two lines on your chart: the upper line marks the channel’s top border, while the lower line indicates its bottom border.
  • The upper line is drawn at a fixed distance from the price, while the lower one is calculated dynamically.

Application of Channel Breakout Strategy Indicator

  • If the price breaks out the top, take a short position.
  • If the price hits the bottom of the channel, take a long position. 

In Summary

The Channel Breakout Strategy is a strategy based on whether the symbol breaks out from a channel or not. This strategy can be created by setting up your desired length of channels, then entering long if the high for that current bar is higher than the upper band and short if it’s lower than its counterpart, in order to create a profit when price reverses directions.

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