Breakout of a trading range is considered as one of the most accurate methods for taking positions in the market. It implies strengthening of the momentum and heavy participation in the direction where breakout happens. In this post, we’ll explore a range breakout Amibroker exploration which will show you the exact price point where you can place buy/sell orders. Also, you’ll know the stop loss and targets for both buy and sell positions.
In case you missed it, we have also posted an Excel sheet for the same breakout strategy. Please find it here.
Range Breakout Amibroker Exploration – Overview
This exploration is based on the average 5-day range of the instrument. On an intraday timeframe, if the price crosses above or below this range, you should take positions.
This is an intraday only strategy where you’ll find the buy/sell levels for each day at market open. You should take trades as per the levels and close all open positions at EOD.
Below are some of the important columns from the exploration:
- Buy Above – The price above which you can place Buy order
- Sell Below – The price below which you can place Sell (Short) order
- Buy SL – Stop loss for Buy position
- Sell SL – Stop loss for Sell position
- Buy Target (1,2,3) – 3 Targets for Buy position
- Sell Target (1,2,3) – 3 Targets for Sell position
Range Breakout Amibroker Exploration – Download Link
You may download the exploration code form below link. The file is in zip format, you’ll have to unzip it before use
The code has been tested in Amibroker version 6 and above. You may download the trial version of Amibroker form this link
How to use this Exploration Code?
Step 1: Open Amibroker, Click on File–>New–>Formula and Copy Paste the exploration code you downloaded.
Step 2: Click on File–>New–>Analysis. Set time frame to Daily.
Step 3: In the “Apply to” drop-down select ‘All symbols’ or filter based on the list of stocks you want to watch. In the range drop-down, select ‘1 recent day(s)’ to run exploration only for the current day. And select the AFL code in the “Formula” box
Step 4: Click on Explore Button. You will see the list of stocks with buy sell levels and targets.
Note – You’ll need a real-time data subscription to use this exploration as the levels are calculated based on current day’s open price.
Understanding the Exploration Code
The code is fairly simple where day’s range and average 5 days range using the below formulas:
The day’s range is the minimum among the difference between High price and Open price and Open price and Low price.
The AddColumn() function adds these values to the exploration result.
Next, the BuyAbove and SellBelow variables are calculated. It implies the breakout price above/below which you have to take the position.
Buy stoploss (BuySL) is the same as SellBelow and Sell stoploss (SellSL) is the same as BuyAbove.
The logic is that if the CMP crosses above the sum of open price and average 5 days range, then you have to place BUY order.
Similarly, if the CMP crosses below the difference of open price and average 5 days range, then you have to place SELL order.
Finally, the buy and sell targets are calculated and added to the exploration.
The first Buy target is the summation of Buy price and average 5 days range. The second target is the summation of first buy target and average 5 days range and so on. For simplicity, we have added just 3 targets but you can add more continuing the same logic.
Vice versa applies for Sell targets.
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