You are using a channel / volatility band + trailing box type indicator (looks like dynamic upper-lower bands with red breakout levels). I will explain a clear rule-based system you can follow with proper Entry, Stop Loss, Take Profit, and 1:2 Risk:Reward.

I will keep it simple and professional.

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✅ 1. Trend Direction Rule (Very Important)

First identify trend:

• 🔵 If price is above middle band and bands are expanding → BUY trend
• 🔴 If price is below middle band and bands are expanding → SELL trend
• ⚠️ If bands are flat and tight → Avoid trading (sideways market)

Only trade in trending conditions.

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✅ 2. Entry Rules

🔵 BUY Entry

Enter BUY when:

1. Price closes above red upper breakout line
2. Candle closes outside upper band
3. Bands are expanding upward

👉 Entry = At next candle open

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🔴 SELL Entry

Enter SELL when:

1. Price closes below lower red breakout line
2. Candle closes outside lower band
3. Bands expanding downward

👉 Entry = At next candle open

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✅ 3. Stop Loss Placement (Very Important)

Use structure-based SL.

For BUY:

• Stop Loss = Below last swing low
  OR
• Below lower band

For SELL:

• Stop Loss = Above last swing high
  OR
• Above upper band

Never use random SL.

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✅ 4. Take Profit (1:2 Risk Reward Strategy)

Use fixed Risk:Reward ratio.

Example:

If Stop Loss = 50 pips
Then Take Profit = 100 pips

👉 Always maintain minimum 1:2 RR

Formula:

Risk = Entry – Stop Loss
TP = Entry + (Risk × 2) for BUY
TP = Entry – (Risk × 2) for SELL

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✅ 5. Advanced TP Option (Trailing Method)

You can also:

• Trail SL to middle band
• Or trail below/above opposite band
• Or close when candle closes inside band again

This locks profits in strong trends.

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✅ 6. Risk Management (Very Important)

Never risk more than:

• 1% per trade (safe)
• 2% maximum (aggressive)

Lot size formula:

Lot Size = (Account Balance × Risk %) ÷ Stop Loss (in pips)

Example:

$1000 account
1% risk = $10
SL = 50 pips

Lot size = $10 ÷ 50 = 0.20 mini lot (approx depending on pair)

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✅ 7. Best Pairs for This Indicator

Works best in:

• XAUUSD (Gold)
• GBPJPY
• NAS100
• EURUSD (during London/NY session)

Avoid:

• Low volatility Asian session
• News time (high spike fake breakouts)

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✅ 8. Common Mistakes to Avoid

❌ Don’t trade when bands flat
❌ Don’t trade against trend
❌ Don’t remove SL
❌ Don’t overtrade

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✅ Complete Example (Gold – XAUUSD)

Price breaks upper band
Entry = 4975
SL = 4965 (10$ risk)
TP = 4995 (1:2 = 20$ target)

Simple. Mechanical. No emotions.

Download File Click Here ❤️