Forex Breakout and Price Action Systems: 10 Strategies Compared
Breakout systems enter when price leaves a defined area: the opening range of a session, a channel, a group of candles or a psychological level such as a round number. Price action systems read candles and structure directly. This page collects ten of these systems with their rules, timeframes, stops and targets. For the underlying skills, see our guides to price action and candlestick patterns.
These systems were collected from public trading forums and are explained here for education. They have not been independently backtested; results depend on spreads, execution and discipline.
The Systems at a Glance
| System | Timeframe | Main indicators |
|---|---|---|
| 3 Candles High or Low Trading System | 5-minute | |
| B.O.S.S. Breakout Method Trading System | Three B.O.S.S. custom indicators (green up, red down) | |
| 5 min Channel Trading System | M5 | Price channel (manual trendlines, Donchian Channel or Linear Regression Channel) |
| Hells Angels Trading System | 1-hour and 4-hour preferred; lower timeframes for experienced traders | Candlestick price action, Swing high/low reference lines, Optional simple moving average for trend |
| Price Action Fractal Scalping Trading System | 5-minute (M5) | Fractals (Bill Williams default), 6 EMA, 12 EMA |
| Psych Level Scalping Trading System | M5 entries; H1 and D1 for directional filter | SweetSpots.mq4 (psychological levels 00/25/50/75), TRO_DRAGON_MONEY_MGMT, M-Candles (H1/D1 candle colour) |
| Scalp Pattern Trading System | 15-minute | Engulfing candlestick pattern |
| 60 Minute After Open Trading System | 15-minute bars, entry 60 minutes after London or New York open | Intraday high/low of first session hour, Last completed 15-minute bar high/low |
| Open Range Scalp Trading System | 1-minute chart, first 15-minute range | Opening range high/low (first 15 minutes) |
| 5min Breakout Trading System | 5-minute (M5) | 10 EMA, 50 EMA, Bollinger Bands (30, 2) |
3 Candles High or Low Trading System
Price-action scalping system entering on the fourth candle after three consecutive same-direction candles forming a clear slope, with fixed small pip targets.
| Timeframe | 5-minute |
|---|---|
| Pairs | EUR/USD, AUD/USD, GBP/USD |
Buy rules:
- Three consecutive bullish candles, each with higher high and higher low
- Avoid candles with long opposing wicks or tiny bodies
- Enter long at the open of the fourth candle
Sell rules:
- Three consecutive bearish candles, each with lower high and lower low
- Avoid candles with long opposing wicks or tiny bodies
- Enter short at the open of the fourth candle
Stop-loss: Just below the second candle's low for longs; just above its high for shorts.
Exit: Fixed targets: AUD/USD 6 pips, EUR/USD 8 pips, GBP/USD 10 pips.
B.O.S.S. Breakout Method Trading System
London-open session breakout on GBP/USD, taken after 7:00 am when all three colour-coded indicators agree with the breakout direction.
| Pairs | GBP/USD |
|---|---|
| Indicators | Three B.O.S.S. custom indicators (green up, red down) |
Buy rules:
- Wait until the 6:55 bar closes (7:00 am UK); ignore earlier signals.
- All three B.O.S.S. indicators show green.
- Price breaks above the pre-open consolidation range high.
- Enter long on the close of the breakout candle.
Sell rules:
- Wait until the 6:55 bar closes (7:00 am UK); ignore earlier signals.
- All three B.O.S.S. indicators show red.
- Price breaks below the pre-open consolidation range low.
- Enter short on the close of the breakout candle.
Stop-loss: Just beyond the opposite side of the breakout range or recent swing; risk 1-2% per trade.
Exit: Target 1.5x to 2x risk, set before entry; stop trading after the London session.
5 min Channel Trading System
Trade the first pullback after a decisive channel break, targeting the channel height projected from the retest level.
| Timeframe | M5 |
|---|---|
| Pairs | Major pairs: EUR/USD, GBP/USD, USD/JPY, AUD/USD |
| Indicators | Price channel (manual trendlines, Donchian Channel or Linear Regression Channel) |
Buy rules:
- Price trades inside a clearly defined channel for a meaningful period.
- Candle closes decisively above channel resistance.
- Wait for first pullback to retest broken resistance as support.
- Enter when price bounces and a candle closes upward.
- Skip if reward-to-risk below 2:1 or strong level blocks target.
Sell rules:
- Price trades inside a clearly defined channel for a meaningful period.
- Candle closes decisively below channel support.
- Wait for first pullback to retest broken support as resistance.
- Enter when price rejects and a candle closes downward.
- Skip if reward-to-risk below 2:1 or strong level blocks target.
Stop-loss: Just below the bounce low for longs, just above the bounce high for shorts.
Exit: Take profit = pullback level plus/minus channel height, moved a few pips closer to entry.
Hells Angels Trading System
Price-action system trading valid formation candles: strong-bodied candles closing near their extreme at meaningful levels, in higher-timeframe trend direction.
| Timeframe | 1-hour and 4-hour preferred; lower timeframes for experienced traders |
|---|---|
| Pairs | Forex (example EUR/USD); also indices, commodities, crypto |
| Indicators | Candlestick price action, Swing high/low reference lines, Optional simple moving average for trend |
Buy rules:
- Wait for a VALID GREEN candle to close: large body, close near high.
- Prefer candle at support, round number, or after pullback in uptrend.
- Enter at open of the next candle.
- Take buys with higher-timeframe uptrend bias.
Sell rules:
- Wait for a VALID RED candle to close: large body, close near low.
- Prefer candle at resistance, round number, or after pullback in downtrend.
- Enter at open of the next candle.
- Take sells with higher-timeframe downtrend bias.
Stop-loss: Just beyond valid candle's opposite extreme (below low for buy, above high for sell) plus small spread buffer.
Exit: Take profit at minimum 1.5:1 or 2:1 reward-to-risk, or trail stop behind each new valid candle.
Price Action Fractal Scalping Trading System
M5 scalping system entering 2-pip breaks of fractals in the direction of a stacked 6/12/34 EMA trend, with fixed pair-specific targets.
| Timeframe | 5-minute (M5) |
|---|---|
| Pairs | EUR/USD, AUD/USD, GBP/USD |
| Indicators | Fractals (Bill Williams default), 6 EMA, 12 EMA, 34 EMA |
Buy rules:
- 6 EMA above 12 EMA, 12 EMA above 34 EMA.
- Up fractal forms above the EMAs.
- Buy stop 2 pips above the up fractal level.
Sell rules:
- 6 EMA below 12 EMA, 12 EMA below 34 EMA.
- Down fractal forms below the EMAs.
- Sell stop 2 pips below the down fractal level.
Stop-loss: Just below previous up fractal for longs; just above previous down fractal for shorts.
Exit: Fixed take profit: 6 pips AUD/USD, 8 pips EUR/USD, 10 pips GBP/USD.
Psych Level Scalping Trading System
M5 scalping at round-number psychological levels, trading bounces or pushes through only in H1 candle colour direction, with D1 alignment for larger targets.
| Timeframe | M5 entries; H1 and D1 for directional filter |
|---|---|
| Pairs | Majors (EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD), max spread 1.5 pips |
| Indicators | SweetSpots.mq4 (psychological levels 00/25/50/75), TRO_DRAGON_MONEY_MGMT, M-Candles (H1/D1 candle colour) |
Buy rules:
- H1 candle is bullish (green).
- Price reaches a 00/25/50/75 level.
- Wait for confirming bar: rejection bounce or clean push through level.
- Enter long a pip or two above the level.
- Maximum one trade per hour.
Sell rules:
- H1 candle is bearish (red).
- Price reaches a 00/25/50/75 level.
- Wait for confirming bar: rejection or clean push through level.
- Enter short a pip or two below the level.
- Maximum one trade per hour.
Stop-loss: Hard stop just beyond the next psychological level; risk 0.5-1% per trade; daily loss limit 2-3%.
Exit: If H1 and D1 colours agree, target next psych level and trail (1:1 to 1:2); if they disagree, take about 5 pips.
Scalp Pattern Trading System
Scalping system trading bullish/bearish engulfing candles on the 15-minute chart during the first and last hour of the trading day, entering when price breaks the prior candle's high/low, with 6-pip target, 6-pip stop and a one-minute time stop. Requires ECN account.
| Timeframe | 15-minute |
|---|---|
| Pairs | Major pairs with spreads below 1 pip, primarily EUR/USD |
| Indicators | Engulfing candlestick pattern |
Buy rules:
- Trade only in the first or last hour of the trading day
- Previous candle is dark (bearish)
- Buy at market when current white body exceeds previous dark candle's high
Sell rules:
- Trade only in the first or last hour of the trading day
- Previous candle is white (bullish)
- Sell at market when current dark body drops below previous white candle's low
Stop-loss: 6-pip stop loss, or exit after 1 minute without reaching target.
Exit: Take profit at 6 pips; close manually if trade lasts over 1 minute without hitting target.
60 Minute After Open Trading System
Time-based ECN scalping method fading session extremes one hour after London/New York open via stop-entry orders on 15-minute bar breaks.
| Timeframe | 15-minute bars, entry 60 minutes after London or New York open |
|---|---|
| Pairs | EUR/USD; also USD/JPY, GBP/USD on ECN accounts |
| Indicators | Intraday high/low of first session hour, Last completed 15-minute bar high/low |
Buy rules:
- Wait 60 minutes after London or New York session open.
- Price is resting near the intraday low.
- Buy stop 1 pip above high of last completed 15-minute bar.
- Stand aside if price is mid-range or around high-impact news.
Sell rules:
- Wait 60 minutes after London or New York session open.
- Price is hugging the intraday high.
- Sell stop 1 pip below low of last completed 15-minute bar.
- Stand aside if price is mid-range or around high-impact news.
Stop-loss: 5 pips stop loss; plus 1-minute time stop.
Exit: Take profit at +6 pips; exit if trade has not moved favourably within 1 minute.
Open Range Scalp Trading System
Scalps the breakout of the first 15-minute range at the London or New York open, taking 5 pips with a 5-pip or one-minute stop, plus one opposite-side re-entry.
| Timeframe | 1-minute chart, first 15-minute range |
|---|---|
| Pairs | Highly liquid majors with spreads below 1 pip, ideally EUR/USD |
| Indicators | Opening range high/low (first 15 minutes) |
Buy rules:
- At London or New York open (08:00 local), mark the first 15-minute range high and low.
- Place buy stop 1 pip above the range high.
- If stopped out on the short side, keep buy stop for one re-entry.
Sell rules:
- At London or New York open (08:00 local), mark the first 15-minute range high and low.
- Place sell stop 1 pip below the range low.
- If stopped out on the long side, keep sell stop for one re-entry.
Stop-loss: 5 pips from entry, or exit if trade is open more than one minute, whichever comes first.
Exit: Close immediately at 5 pips profit; cancel the opposite order after a win; max one re-entry per session.
5min Breakout Trading System
M5 breakout system entering when a candle closes beyond a Bollinger Band, confirmed by EMA trend, RSI and MACD momentum; exits via SAR flip or fixed pip target.
| Timeframe | 5-minute (M5) |
|---|---|
| Pairs | EUR/USD, GBP/USD, AUD/USD |
| Indicators | 10 EMA, 50 EMA, Bollinger Bands (30, 2), Parabolic SAR (0.03, 0.2), RSI (14), MACD (12, 26, 9) |
Buy rules:
- Candle closes above upper Bollinger Band
- 10 EMA above 50 EMA
- RSI above 60
- MACD above 0
Sell rules:
- Candle closes below lower Bollinger Band
- 10 EMA below 50 EMA
- RSI below 40
- MACD below 0
Stop-loss: Just beyond opposite Bollinger Band or recent swing high/low, typically 6-12 pips.
Exit: Close on Parabolic SAR flip, or fixed target about 7 pips EUR/USD, 9 pips GBP/USD; optionally partial at target, trail rest with SAR.
How to Test These Systems Safely
- Pick one or two systems whose rules you can follow without interpretation.
- Set them up on a demo account with the broker’s real spreads; several systems use custom indicators that must be installed in MQL4/Indicators (see our free MT4 indicators for common tools).
- Check that arrow or signal indicators do not repaint: scroll back and compare past signals with what you saw live.
- Record at least 50-100 trades, including costs, before deciding whether a system has an edge.
- Risk 0.5-1% per trade and stop for the day after a set loss.
Frequently Asked Questions
Why do so many breakouts fail?
Many breakouts are false moves that reverse back into the range, especially in quiet hours. Waiting for a candle close beyond the level, trading during active sessions and following the higher-timeframe trend reduce false breakouts.
What is the best time to trade forex breakouts?
The London open and the London-New York overlap, when volume and volatility rise after the quieter Asian session.
Where should the stop-loss go on a breakout trade?
Usually on the other side of the range or pattern, or at its middle for wide ranges, so a failed breakout is closed quickly.
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