Stretch Breakout Channel

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Who is Toby Crabel?

Toby Crabel is a self-made millionaire commodities trader who has avoided having a losing year from 1991 to 2002. Among other achievements, he wrote a great trading book entitled Day Trading with Short-term Price Patterns.

What is the Stretch?

The Stretch is calculated by taking the 10 period SMA of the absolute difference between the open and either the high or low, whichever difference is smaller. It represents the minimum average price movement/deviation from the open price during a period of time, and that value is used to calculate breakout thresholds for the current trading session. This can be used to plot a multitimeframe breakout channel.

The Opening Range Breakout (ORB) Trading Strategy

Using this strategy, the trader places a buy stop just above the open price plus the Stretch and a sell stop just below the open price minus the Stretch. The first stop triggered enters the trader into the trade and the other stop becomes the protective stop.

Crabel’s research shows that the earlier in the trading session the entry stop is hit the more likely the trade will be profitable at the close. A market movement that kicks off a trend quickly in the current trading session could add significant profit to a trader’s position by the close and should be considered for a multi-day trade.

Extending Crabel’s research results it is obvious that as time passes and we are not filled early on then the risk increases and it becomes prudent to reduce the size of the position during the day. Trades filled towards the end of the day carry the most risk and the later in the day the trade is filled the less likely the trader will want to carry that trade overnight.

Opening Range Breakout Preference (ORBP) Trading Strategy

An ORBP trade is a one sided Opening Range Breakout (ORB) trade. If other technical indicators show a strong trend in one direction then the trader will exercise a preference 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.

 

MT4 Indicator Download – Instructions

Stretch Breakout Channel is a Metatrader 4 (MT4) indicator and the essence of the forex indicator is to transform the accumulated history data.

Stretch Breakout Channel provides for an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.

Based on this information, traders can assume further price movement and adjust their strategy accordingly.

How to install Stretch Breakout Channel.mq4?

  • Download Stretch Breakout Channel.mq4
  • Copy Stretch Breakout Channel.mq4 to your Metatrader Directory / experts / indicators /
  • Start or restart your Metatrader Client
  • Select Chart and Timeframe where you want to test your indicator
  • Search “Custom Indicators” in your Navigator mostly left in your Metatrader Client
  • Right click on Stretch Breakout Channel.mq4
  • Attach to a chart
  • Modify settings or press ok
  • Indicator Stretch Breakout Channel.mq4 is available on your Chart

How to remove Stretch Breakout Channel.mq4 from your Metatrader 4 Chart?

  • Select the Chart where is the Indicator running in your Metatrader Client
  • Right click into the Chart
  • “Indicators list”
  • Select the Indicator and delete

MT4 Indicators Download below:

Stretch Breakout Channel

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