The High/Low Breakout Channel indicator for Metatrader 4 draws an interesting high/low channel on the chart that works very well for price breakout trading.
The indicator appears in the main MT4 chart as two colored red lines that define the high/low price.
Buy & Sell Trade Example
- Initiate a buy trade as soon as the candlestick closes above the upper red breakout line.
- Initiate a sell trade as soon as the candlestick closes below the lower red breakout line.
The High/Low Breakout Channel indicator can be used for both entry and exit signals or mixed together with your own favorite trading strategy for improved performance.
The indicator works equally well on all assets (Forex, CFD stocks, Indices, Cryptocurrencies, Commodities,..) and shows promising results if used correctly.
Free Download
Download the “high-low-channel.mq4” indicator for MT4
Indicator Chart (EUR/USD H1)
The example chart below displays the High/Low Breakout Channel mt4 indicator in action on the trading chart.
Trading Tips:
Utilize your own favorite trade entry, stop loss and take profit method to trade with the High/Low Breakout Channel Forex indicator.
As always, trade in agreement with the overall trend and practice on a demo account first until you fully understand this indicator.
Please note that even the best trading indicator cannot yield a 100% win rate over long periods.
Indicator Specifications & Inputs:
Trading Platform: Developed for Metatrader 4 (MT4)
Currency pairs: Works for any pair
Time frames: Works for any time frame
Input Parameters: Variable (inputs tab), color settings & style
Indicator type: high/low
Repaint? No.
Scalping Strategy: High Low Breakout Channel + Sibbet Demand Index Divergence (MT4)
This scalping strategy combines the High Low Breakout Channel Indicator and the Sibbet Demand Index Divergence Indicator to identify high-probability breakout opportunities.
The High Low Breakout Channel Indicator defines key support and resistance levels, while the Sibbet Demand Index Divergence Indicator confirms market momentum through volume analysis.
This strategy is suitable for 1-minute to 5-minute charts, ideal for active intraday scalpers.
Buy Entry Rules
- Wait for the price to break above the upper breakout line of the High Low Breakout Channel Indicator, indicating a potential bullish breakout.
- Ensure the Sibbet Demand Index Divergence Indicator turns green, confirming strong buying momentum.
- Enter a buy trade at the close of the candle that confirms both conditions.
- Set the stop loss just below the most recent swing low or a significant support level.
- Set the take profit at a 1:1.5 reward-to-risk ratio, or exit when the Sibbet Demand Index Divergence Indicator turns red.
Sell Entry Rules
- Wait for the price to break below the lower breakout line of the High Low Breakout Channel Indicator, indicating a potential bearish breakout.
- Ensure the Sibbet Demand Index Divergence Indicator turns red, confirming strong selling pressure.
- Enter a sell trade at the close of the candle that confirms both conditions.
- Set the stop loss just above the most recent swing high or a significant resistance level.
- Set the take profit at a 1:1.5 reward-to-risk ratio, or exit when the Sibbet Demand Index Divergence Indicator turns green.
Advantages
- Combines breakout levels with volume-based momentum for high-probability entries.
- Clear entry and exit signals reduce decision-making time.
- Suitable for quick, intraday trades on short timeframes.
- Adaptable to various currency pairs and market conditions.
- Enhances trading discipline by providing structured rules.
Drawbacks
- Stop losses can be hit prematurely if sudden spikes occur, particularly around news releases.
- Performance may vary across currency pairs; some pairs may experience frequent whipsaws.
- Scalping profits per trade are relatively small, requiring strict risk management and multiple successful trades for consistent gains.
- High spread or slippage during volatile market conditions can reduce profitability.
Case Study 1
On the EUR/USD 1-minute chart, the price broke above the upper breakout line of the High Low Breakout Channel Indicator, signaling a potential buy.
The Sibbet Demand Index Divergence Indicator turned green, confirming bullish momentum.
A buy trade was executed at 1.1850, with a stop loss at 1.1840 and a take profit at 1.1865.
The trade reached the take profit level within 10 minutes, yielding a 15-pip gain.
Case Study 2
On the GBP/USD 5-minute chart, the price broke below the lower breakout line of the High Low Breakout Channel Indicator, indicating a potential sell.
The Sibbet Demand Index Divergence Indicator turned red, confirming bearish pressure.
A sell trade was entered at 1.3500, with a stop loss at 1.3520 and a take profit at 1.3480.
The trade hit the take profit level within 15 minutes, resulting in a 20-pip profit.
Strategy Tips
- Trade primarily during high-liquidity sessions, such as London and New York overlaps, to reduce slippage and ensure reliable breakouts.
- Use currency pairs with tight spreads and low slippage, such as EUR/USD, GBP/USD, USD/JPY, and AUD/USD, for maximum scalping efficiency.
- Combine with support and resistance levels, pivot points, or previous highs/lows to filter fake breakouts and improve entries.
- Use smaller position sizes to limit risk, especially when multiple breakout trades are taken in quick succession.
- Apply a trailing stop to lock in profits when the price moves strongly in your favor after a breakout.
- Be patient and disciplined—wait for the breakout to close beyond the channel line with momentum confirmation before entering.
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Download the “high-low-channel.mq4” indicator for Metatrader 4
