Trading signal: take a position on a bullish break-out


This signal was created by Eric Lefort, the famous French author and trader. It enables to take a position when quotes cross a bearish- or horizontal line upwards. This signal is exclusively bullish.

Category : Trend reversal and trend resumption
Components : Trend line
Time frame(s) : All
Usable for buy signals : Yes
Usable for short sell signals : No

This signal seeks to trace black downward- or horizontal trend lines between two peaks on quotes, following precise and configurable criteria. When a trend line is validated, a green line is traced over a certain number of periods.

The parameters are set by default to offer as many trend lines as possible. It is recommended to show the signals on a chart and then to play with the parameters below in order to learn how to select the type of trend line:

StartTime : Start of the period of activation of the signal (ex.: 900 for 9 a.m.)
EndTime : End of the period of activation of the signal (ex.: 1845 for 18.45 p.m.)
MessageBox : 1 = send a message when a signal appears
PlaySound : 1 = play a sound when a signal appears
SendEmail : 1 = send an email when a signal appears
Smooth : Number of bars needed to form a peak
Mini : Minimum number of bars between two peaks
Maxi : Maximum number of bars between two peaks
Prolong : Number of bars to form a green line
MaxHighInclination : Maximum inclination of the line
MinHighInclination : Minimum inclination of the line
EntryStrategy : 0 = no entry, 1 = entry if break-out on close, 2 = entry at the close of the candle if the break-out takesplace during the candle
DifferEntry : Entry delayed by this amount of bars

When to open a position?

A buy signal is triggered if the price closes above the green line after an upward cross. A signal is identifiable by the presence of a vertical grey band.

Automatic trading signal

In this example, five trend lines are drawn on the chart. Only the first three trend lines produce buying signals.

We notice that this type of signal allows entering at the foot of a bullish trend reversal (signal #1) and during a bullish progression (signals #2 and #3).

It is also effective to limit losing entries during downward trends (signal#4 et #5).