The Magic Breakout plus System is an MT4 forex breakout trading indicator. It uses two types of Wave indicators for assessing the dynamic price breakout levels.
This system also involves Color CCI – a Commodity Channel Index indicator that examines the balance between bullish and bearish force underlying the price movements.
The Wave indicator in red color shows the short-term trend reversal zone. On the other hand, the tri-band in blue color represents the Upper Wave indicator. The Upper Wave focuses on intraday price breakout areas.
We’ll use these wave levels for analyzing the current trend conditions. For example, when the price moves above both wave and upper wave levels, we address the market trend as bullish.
Once we get the trend confirmation from Wave indicators, we look for Color CCI momentum signals for confirming an order.
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Buy Signal Generation with Magic Breakout plus System
In this setup, initially, the price was in a choppy condition until it broke above the wave zone.
During this period, the Wave levels moved above the Upper Wave lines confirming the bullish market trend.
Also, the Color CCI shows a positive value and plots green bars confirming a buy order activation signal.
Sell Signal Generation with Magic Breakout plus System
For sell orders, the price needs to close below all the wave levels to confirm a bearish trend.
During a bearish trend, the Wave levels should move lower than the Upper Wave lines which we consider as a bearish crossover.
Finally, the Color CCI value becomes negative, and with its bars turned red signaling for a sell order.
The Magic Breakout plus System brings a new trend-following trading concept by applying two different types of wave indicators in the same chart.
These waves not only outline the highly potential price breakout zones but also plots crossover signals by moving across each other.
Moreover, the Color CCI indicator offers easy momentum signals which you can use to filter any trade setups at any market trend conditions.