Channel breakout system is the heart of the most successful public and commercial trading systems. What is a channel breakout system? It is a simple strategy where we create a channel around the price. Trading signals are generated whenever the price breaks out of the channel. There are number of ways we can create a channel. It can be a simple High / Low channel. It can be a percentage band channel like the Nick MA system or even an ATR channels. Most of the popular commercial systems like the ASCtend or the Brain Trend are all channel breakout systems. Even the very popular Super trend is channel breakout system
In the Metatrader we find many channel breakout systems. In fact the channel systems are commonly used to define the Trend itself. Indicators like Altrtrend, Bykov trend and Silver Trend are a few examples. Even the StepMA which I described earlier in this blog uses a channel to decide when the MA has to remain constant or move up. I plan to present some of these metatrader channel based Trend Indicators here.