In this tutorial, we will explore the core trading strategies available in FxMagnetic™ Breakout Trader. Each strategy comes with multiple variations and modes to help traders create strategies that take advantage of market conditions, maximize opportunities, and achieve a better trading portfolio.
This guide is designed to help both new and experienced users to navigate Breakout Trader effectively and maximize its features
What Is The Breakout Trader?
Breakout Trader strategies use Breakout signals where price decisively moves beyond a defined level of support, resistance, or a volatility-derived boundary, with the expectation that the move will continue in the breakout direction.
They work by defining a reference range or channel (price levels, Donchian, Bollinger, Keltner, or ATR bands), triggering entries when price closes outside that boundary, and using volatility or swing-based stops and targets to manage risk and follow-through.
Built-In Trading Strategies Quick Look
FxMagnetic™ Breakout Trader comes with 7 built-in core trading strategies with several modes:
Before we dive into each, it is crucial to understand the following:
Scanner Application
Every FxMagnetic software has a Scanner which serves as the analytical engine, allowing you to:
- Build and test trading strategies
- Run backtest optimizations
- Generate trading signals based on your configured parameters
- Analyze strategy performance with detailed metrics
Auto Trader Application
This works in conjunction with the Scanner to:
- Automatically execute signals generated by the Scanner
- Provide hands-free trading once your strategy is configured
- Maintain consistent execution without emotional interference
Important: You can use the Scanner independently for manual signal following, or combine both applications for full automation.
Strategy Building Blocks
The strategies are your building blocks to develop a trading strategies, and can be further enhanced with:
- Trade filters for additional confirmation
- Time filters for specific trading sessions
- Various exit conditions
- Parameter combinations through optimization (Yes, it comes with an optimization feature)
This creates virtually endless possibilities for strategy development.
Trading Modes
Each strategy can be executed in different modes to adapt to various market conditions:
Regular Mode
- Takes both buy and sell trades
- Closes existing trades when opposite signal appears
- Only one trade opens at a time
Reverse Mode
- Takes opposite trades from what the strategy indicates
- Example: Take sell trade when strategy shows buy signal
Buy Only Mode
- Only takes buy trades
- Holds until stop loss or take profit
- Ignores sell signals
Sell Only Mode
- Only takes sell trades
- Holds until stop loss or take profit
- Ignores buy signals
Reverse Buy Only Mode
- Only looks for buy signals but takes sell trades instead
Reverse Sell Only Mode
- Only looks for sell signals but takes buy trades instead
Trade Exit Behavior
- Buy Only/Sell Only modes: Trades exit only at stop loss or take profit
- Regular/Reverse modes: Trades may exit earlier due to opposite signals
Strategy Deep Dive
1. New York opening range breakout Strategy
Capture intraday momentum from the New York session open by trading closes beyond the initial opening range built from the first N minutes after 9:30 AM New York time. Designed for short-term breakout entries with configurable filters for volatility and range size.
How It Works:
- At 9:30 AM New York time the strategy measures a range using price high and low for the configured range minutes.
- After the range completes, a trade is signaled when a candle closes above the range high (buy) or below the range low (sell).
- Optional filters (max range height, ATR rising, pattern flexibility) screen ranges and confirm breakout quality before taking a trade.
Key Parameters:
- Range minutes: length in minutes after 9:30 AM used to build the opening range.
- Max range height (ATR multiple): skip ranges larger than this ATR threshold to avoid extreme volatility.
- Pattern Flexibility: Flexible or Strict breakout confirmation rules (F = relaxed, S = stronger confirmation).
- Stop Loss (SL): user-defined stop distance (points or ATR multiple) applied to each trade.
- Take Profit (TP): user-defined target distance or reward-to-risk setting.
- ATR rising filter: boolean to allow trades only when ATR is increasing.
- Artificial spread: points added to simulate execution costs and widen effective entry/exit.
Entry And Exit Logic:
- Buy Signal: a candle closes above the opening-range high after the configured range minutes and passes selected filters.
- Sell Signal: a candle closes below the opening-range low after the configured range minutes and passes selected filters.
- SL/TP Type: user-defined fixed distance or ATR-based SL and TP; multi-position behavior can set first position TP and move remaining positions to break-even.
- Trade Filter Used: Max range height (skip ranges exceeding configured ATR multiple).
Strategy Benefits:
Captures high-probability momentum moves that often occur at the New York open while using range size and volatility filters to avoid low-quality breakouts, producing compact, tradeable intraday signals.
2. Custom opening range breakout Strategy
User-defined session open breakout that builds an opening range for a configurable number of minutes and trades a close beyond that range to capture early-session momentum.
How It Works:
- At the user-defined session start time the strategy records range high and low for “Range minutes” to form the opening range.
- After the range period elapses, a buy is signaled when a candle closes above the range high; a sell is signaled when a candle closes below the range low.
- Optional filters can skip oversized ranges (ATR threshold), require ATR rising, or apply pattern flexibility to tighten/loosen breakout confirmation.
Key Parameters:
- Session Start Time: User-defined session open (HH:MM) that begins the range period.
- Range Minutes: Number of minutes from session start used to build the opening-range high/low.
- Max Range Height (ATR multiple): Skip ranges whose height exceeds this ATR multiple to avoid extreme volatility.
- Pattern Flexibility: Flexible or Strict breakout confirmation mode (F = relaxed, S = stricter close/body requirements).
- SL (stop loss) and TP (take profit): User inputs for fixed or ATR-based exit sizing and multi-position behavior.
- ATR Rising Filter: Optional boolean to require ATR increasing for trade permission.
- Daily Time Filter: Window limiting when the scanner/EA will consider breakouts.
Entry And Exit Logic:
- Buy Signal: A candle closes above the user-defined opening-range high after Range Minutes have elapsed and pattern filter conditions are met.
- Sell Signal: A candle closes below the user-defined opening-range low after Range Minutes have elapsed and pattern filter conditions are met.
- SL/TP Type: User-defined stop loss and take profit (fixed points or ATR-based); supports multi-position TP/SL and move-to-breakeven rules.
- Trade Filter Used: Max Range Height (skip ranges exceeding configured ATR multiple).
Strategy Benefits:
Captures early-session directional momentum while letting users control session timing and range sensitivity, reducing false breakouts via ATR-based range filtering and strict/flexible confirmation modes.
3. London breakout Strategy
Captures momentum that follows a breakout from a pre-London session range built in the minutes before the London open. Trades aim to follow the directional move that starts at or after the London session start.
How It Works:
- Build a pre-session range using price highs and lows over the configured pre-range minutes immediately before the London session start.
- After London open, wait for a candle to close above the pre-range high for a buy or below the pre-range low for a sell to confirm the breakout.
- Optionally skip ranges that exceed the Max range height (ATR multiple) or require pattern strictness to reduce false signals.
Key Parameters:
- Pre-range minutes: Minutes used to form the range before London open; defines the breakout zone.
- Session start time: London session start (default 08:00 London) used as the breakout reference point.
- Max range height (ATR): ATR multiple threshold to skip excessively large or volatile ranges.
- Pattern Flexibility: Flexible or Strict entry confirmation controlling required candle body/close rules.
- Stop Loss (SL): User-defined stop distance used for scans and autotrader.
- Take Profit (TP): User-defined target distance or multiple used for exits.
- DST time shift: Optional shift to align session times with broker server when DST differs.
Entry And Exit Logic:
- Buy Signal: Candle closes above pre-session range high at or after the London open.
- Sell Signal: Candle closes below pre-session range low at or after the London open.
- SL/TP Type: Fixed distance or ATR-based SL and TP with multi-position rules available (first position TP, remaining to break-even or optional TP).
- Trade Filter Used: Max range height (skip ranges exceeding configured ATR multiple).
Strategy Benefits:
Well suited to capture the London session’s high-liquidity directional moves by using a short pre-range to identify local imbalances, producing clear, time-aligned breakout entries with configurable volatility and confirmation filters.
4. Custom pre-session breakout Strategy
A pre-session range is built using user-defined minutes before a chosen session start; trades attempt to capture the directional breakout when price closes beyond that pre-session range after the session begins. This targets predictable liquidity shifts at session open while allowing custom session timing.
How It Works:
- Define a pre-range window that ends at the chosen session start; high and low of that window form the breakout zone.
- After the session start, a close above the pre-range high signals a buy and a close below the pre-range low signals a sell.
- Optional filters discard oversized or low-volatility ranges and can require additional confirmation such as ATR rising or pattern strictness.
Key Parameters:
- Pre-range minutes: Minutes before session start used to build the high/low breakout range.
- Session start time: User-defined session open that marks range endpoint and trade activation.
- Max range height (ATR multiple): ATR-based threshold to skip ranges that are too large or volatile.
- Pattern Flexibility: Flexible or Strict breakout confirmation for looser or stronger signal requirements.
- DST time shift: Optional offset to align session times with broker server DST differences.
Entry And Exit Logic:
- Buy Signal: Candle closes above the pre-range high after the session start.
- Sell Signal: Candle closes below the pre-range low after the session start.
- SL/TP Type: User-defined SL and TP (fixed points or ATR-based); multi-position behavior can set first position TP and move remaining positions to break-even.
- Trade Filter Used: Max range height (skip trades if pre-range exceeds specified ATR multiple).
Strategy Benefits:
Captures the early-session momentum tied to scheduled liquidity shifts while letting traders choose session timing and pre-range length for better signal alignment and fewer false breakouts.
Pattern Flexibility Selector Feature
This feature controls how strictly entry conditions must be met without changing what patterns are detected.
Strict Mode (S)
Uses precise breakout rules and higher confirmation requirements. Prioritizes clear, narrowly defined entry and exit signals, reduces false breakouts, and favors trade setups with stronger statistical backing; best for disciplined, lower-frequency strategies and risk-averse traders.
Flexible Mode (F)
Allows relaxed breakout rules and earlier, lower-confirmation entries. Increases sensitivity to potential moves and captures more opportunities at the cost of more false signals; suitable for adaptive, higher-frequency approaches and traders willing to manage more noise.
Impact on Results
Switching between modes can significantly change:
- Number of generated signals
- Trade sequence and timing
- Overall strategy performance
- Risk-reward characteristics
Always test both modes during optimization to determine which works better for your specific pair and timeframe.
Important Trading Rules
- Single Trade Management: Software opens one trade at a time per strategy for better risk management. For multiple concurrent trades, attach software to additional charts.
- Exit Behavior:
- Regular/Reverse modes: New opposite signals close existing trades
- “Only” modes: Trades run until stop loss or take profit
- Filter Integration: Use trade filters for additional confirmation and improved results.
- Mode Experimentation: Consider testing different modes (Regular, Reverse, Buy Only, Sell Only) as market conditions change.
- Parameter Optimization: Regularly re-optimize parameters to adapt to changing market conditions.
Monitoring Performance
Track these key metrics for each strategy:
- Win Rate Percentage: Target varies by strategy type and risk-reward ratio
- Maximum Consecutive Losses: Monitor for strategy viability
- Return to Drawdown Ratio: Higher ratios indicate more efficient strategies
- Total Pips/Points Gained: Absolute performance measure
- Drawdown Percentage: Risk measurement and capital preservation
- Trade Frequency: Ensure adequate signal generation
Understanding your numbers are crucial to your trading success. Remember, FxMagnetic can only help speed up your strategy development. Your outcomes would still depend on how well you use the software.
Tips for Success
- Always define the range length explicitly and test multiple values; different instruments and sessions require different range lengths, use the scanner to compare results for 5, 15, 30, 60+ minute ranges
- Never enter on a mere touch; Breakout Trader waits for a candle to close outside the range before signaling entry, configure your expectations and automated rules accordingly
- Use Max Range Height expressed in ATR to filter out pre-existing high-volatility ranges; skip ranges larger than your ATR threshold to avoid exhausted moves
- Use the Daily Time Filter to restrict when the scanner looks for breakouts to reduce overtrading and focus on the session windows that matter
- Choose Strict versus Flexible Pattern Flexibility depending on goals; Flexible generates more signals for discovery, Strict requires stronger confirmation and produces fewer, higher-quality setups
- Monitor maximum consecutive losses as an indicator for strategy viability.
- Consider using trend filters or monitor higher time frames to understand the overall trend.
- Regularly optimize settings to adapt to changing market conditions.
- Practice proper risk and money management when using tools like these.
