Currency System Analysis, Vol. 2

Typical channel breakout systems go long when price hits an x-day high and go short when price hits an x-day new low in hopes the trend will continue. However, such approaches usually detect trends quite late and thus give up a large part of their profits.

The following system tries to address this problem by entering positions a bit before price actually penetrates a breakout level. The tool used to do this is the HighestLowestRange (HLR) indicator, which shows prices relative location within the high-low range of the past x bars.