Range breakout
A range breakout system defines a window (say, the Asian session), records its high and low, and places pending orders just outside: a buy stop above the high, a sell stop below the low. When rising liquidity pushes price out of the range, one order triggers and the other is cancelled.
The idea is structural rather than predictive: it does not forecast direction, it positions for expansion after contraction. Its risks are equally structural — false breakouts, wide spreads at session open, and slippage on the stop orders that define it.
Covered in depth in Lesson 01: What an Expert Advisor actually is — and what it isn't.
Related terms
- Trading session — The hours when a major financial center is active — Asian, London, and New York sessions shape the day's liquidity rhythm.
- Pending order — An instruction that rests at the broker until price reaches a chosen level — buy/sell stops and limits.
- Slippage — The difference between the price an order requested and the price it actually filled at.
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