Forex Breakout Strategy using CCI, EMA Indicators

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Time frame: 15 or higher.
Currency Pairs: all.
CCI 20 (Commodity Channel Index, Period 20, Typical Price)
The Wave (EMA34 High, EMA34 Close, EMA34 Low)

breakout trading system


Trend definition

Uptrend: The price has already crossed the Wave upward and the price is above the Wavebottom.

forex uptrend

Downtrend: The market is trending down if the price is below the the Wave-top.

forex downtrend

Long Entry
Price was above the Wave for some time.
(above the Wave-top)
● Price entered the Wave.
Price was above the Wave and then crossed the Wave-top downward.
● CCI crossed +100 line upward; A POSSIBLE LONG ENTRY SIGNAL on the next candle open.

This is a good signal to go long on the next candle open. But be careful…
● “Five bars check” rule.
Check that CCI was below the +100 line for at least five bars before the cross.
● Check that the market is trending up now.
Check that the price is above the Wave-bottom as with the first rule.
● Buy now!
If all above is filled, buy as new candle opens.

forex breakout chart


Short entry
● CCI crossed the -100 line downward.
Look at CCI when the candle has closed. Was it above the -100 line for at least five bars? Is it
below the -100 line now? If yes, continue to the next step. We have to check market conditions.
● Is price trending down?
Is price below the Wave-top? (Stick with our definition! Don’t let your feeling or intuition to define the trend! Trend definition is a mechanical task here, although sometimes counterintuitive.) If yes, go to the next step.
● Do you see a valid swing pattern?
Train your eyes on the first few trades and you will see the swing pattern subconsciously without reviewing the rules. Review: price was below the Wave and then entered the Wave (in other words, price crossed the Wave-bottom upward
● Sell now!
And prepare your exit targets…


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