Box Breakout Method

15-minute chart

Euro dollar, pound dollar, etc.

The dollar currencies are favorable

As for box breakout

It is desirable to own the center line

A box market refers to a state where the price moves above and below MA deviations

So it behaves as if moving within the envelopes’ bands

However, the envelope defaults to 0.1%

In other words, it only keeps 10 pips away from the MA on either side

Therefore even if you set the envelope to 0.2%

that only determines the pips of the MA deviation

and has no relevance to market perception or market awareness at all

The box market moves up and down by MA deviation

but it does not align with the envelope

Rather, envelopes are more of a breakout-oriented analysis method

However, a breakout of the envelope

is a rejection of movement in MA deviation,

so it tends to become a box or range market, making envelope breakouts unfavorable

Therefore, this box breakout is actually effective

It is only for considering the box market

So we measure the box market with just one line of MA

The market is a natural sequence of chasing movement,

but how firmly you solidify that standard in theory is important

If theory influences the market, then the logic succeeds

Conversely, if a theory has no meaning in the market, it means a fluke win

In that sense, the box breakout is a method based on wins and losses in the market, so it is effective

The center line of MA is the 80 SMA

Use medium- to long-term MA as the center line

This relates to the 15-minute time frame

The market moves are most faithful on the 1-hour and 4-hour charts

That becomes clear when you look at the market: the 1-hour and 4-hour charts focus on support and resistance

One thing to note: that does not mean that the long-term time frames are correct or absolute

There will always be false signals on any time frame

Technically, there is no such thing as a true false signal

A state of deception occurs when the balance of traders’ positions is disrupted

The market does not deceive on purpose to create such a state

There are reasons, and that is why deception forms in the market

As time frames get shorter, traders’ buy-sell balance becomes more volatile

Therefore, short-term time frames are more prone to deception

Conversely, long-term traders’ balance does not shift as often because

Long-term traders trade with the understanding that stops will likely be hit

Occasionally, there are deceiving trends on long-term charts

In such cases, long-term traders are not trading

Because they trade on long-term time frames

They are not focused on short-term deceptive moves

If you try to enter short-term on long-term pips and take profits

short-term time frames tend to create deception,

resulting in more losses,

and overall performance is worse than trading solely on the long-term

The downside of trading only on the long-term is that

the timing of entries is somewhat delayed

so you have to widen the stop loss at entry points

Therefore, in the 15-minute chart, this is compensated

As a result, the number of entries is similar to long-term, and the stop loss is more favorable than long-term

Now the method

Use the 80 SMA as the axis to determine the box market in the price action

From there, enter at the breakout point determined by MA deviation

Is this really sufficient?

As mentioned earlier, the market is influenced by the long-term time frame

Therefore, considering the logic of the trader’s position size

This is really enough

If deception is not formed, you’re trading based on the long-term, so

the market will move in that direction

Stops

Since this is a box breakout, the loss is minimized and there’s no problem

The pips are still appropriate for a box market; however, from a profit-loss perspective, the profit potential isn’t very good

Take-profit levels

There are box market levels of the same, 2x, and 3x

From Dow Theory’s zigzag perspective, 3x or more is appropriate

However, that also assumes a trending market

If a trend emerges after a breakout from the box, you can target 3x or more

Otherwise, you may end around 1x or 2x

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