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Simple break-out strategy for trading daily chart 17 replies

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Daily Break Strategy

To all involved in this thread, and especially Basper:

Thank you for your generous sharing of information, concepts and EA's.

Question: What would results look like if we traded 3% risk on each trade instead of 1%. Since this is a positive expectation method. (aren't they all) we should get a positive result.

Anyone got a year's worth of back test specifics that I can experiment with on an Excel sheet? I would be happy to share the results with the group.

Many thanks

Tim.
Besper,

Quick question: at the beginning of your thread you mentiond DBCal. Is this a backtesting program? Do you have a link to DB Cal?

Many thanks
Hi there,

Could my reasoning be confirmed here. This is how I understand the system. Today, a bad day for trades. Entry that immediately went to Stop Loss.

We renter for a sell on the SL line and, bang, it stops out again. No other entries for the day.

Is this correct? Am I understanding the system correctly.

(I suppose its good to consider the worst case scenario in any trading system. So long as the positive edge holds we can live with days like this.)

Many thanks in advance.

Tim.
Attached Image (click to enlarge)
Click to Enlarge Name: Black Friday!.JPG Size: 90 KB
Hi Basber!

Very interesting to see someone has the similar system to mine. I used to trade this system in last year. Now i have already stopped using it because i am looking for more potential outcome. Indeed, this system works well because i had backtest it for 8 years. And the crucial things is this system is simple, able to discipline yourself and have the free time to do other stuffs.

So i would like to attach some of my statistical analysis here to provide you the useful evidences of how the market moves. To tell my story in short, i have created my own analysis system to prove and understand the market behaviour, and this thread system is exactly based on my finding. From the statistic report, i understand that where should be the right target and stop loss (High probability area).

Now i have another system that i need to focus with, is the combination of this system with trend and S/R range. Know this could be an better edge. So i think we could work together to maximize the potential of this system. If you need other statistical data or discuss something else. Please PM me.

Statistical Report Explanation
This analysis is the relationship for today and yesterday.

Type of analysis: Trending and ranging
Analysis period: Jan 2004 to Dec 2011 (8 Years)
Daily Timing : GMT 00:00:00 to 23:59:59
Total candlestick bars: 2083 (2083 daily bars)
Fibonacci 0% : Yesterday lowest price
Fibonacci 100% : Yesterday highest price

Horizontal value: Fibonacci 0 to 100%
Vertical value: Extension high and low price position (Trending), open price position (Ranging)

Please look at picture for other info.

Thanks.
Attached Images (click to enlarge)
Click to Enlarge Name: BD1.jpg Size: 195 KB Click to Enlarge Name: BD1-1.jpg Size: 139 KB
**Keep Simple**
FxGrowth All Time Return: -1.9%
Welcome to the thread Tim Here are the replies .. :

Quoting hazel1919
To all involved in this thread, and especially Basper:

Thank you for your generous sharing of information, concepts and EA's.

Question: What would results look like if we traded 3% risk on each trade instead of 1%. Since this is a positive expectation method. (aren't they all) we should get a positive result.

Anyone got a year's worth of back test specifics that I can experiment with on an Excel sheet? I would be happy to share the results with the group.

Many thanks

Tim.
3% risk will increase your drawdown. But afterall, what was given here was the basics. It's a rule of thumb for beginning. Although I don't recommend risking over 2% on any trade from any method, you can change the risk. But before that trade well with method to grasp it concepts so you can personalize it, or you can have an accurate backtest.



Quoting hazel1919
Besper,

Quick question: at the beginning of your thread you mentiond DBCal. Is this a backtesting program? Do you have a link to DB Cal?

Many thanks
It's not a backtesting program. It's a visual basic written program by me that I use myself for calculation of the levels. It's designed for 2 pip spread for EU.


Quoting hazel1919
Hi there,

Could my reasoning be confirmed here. This is how I understand the system. Today, a bad day for trades. Entry that immediately went to Stop Loss.

We renter for a sell on the SL line and, bang, it stops out again. No other entries for the day.

Is this correct? Am I understanding the system correctly.

(I suppose its good to consider the worst case scenario in any trading system. So long as the positive edge holds we can live with days like this.)

Many thanks in advance.

Tim.
You still had the sell order for first entry and if triggered and not reached TP2 and reached SL are (the sell from first entry), buy from second entry will trigger. Worst case for this method is 4SLs in a day and best result is 4TP1 and 2TP2 for a day. Other things you described was right.

P.S. : Read the first post more accurately. Thanks

Regards,
Basber
Quoting ~bull.bear~
Hi Basber!

Very interesting to see someone has the similar system to mine. I used to trade this system in last year. Now i have already stopped using it because i am looking for more potential outcome. Indeed, this system works well because i had backtest it for 8 years. And the crucial things is this system is simple, able to discipline yourself and have the free time to do other stuffs.

So i would like to attach some of my statistical analysis here to provide you the useful evidences of how the market moves. To tell my story in short, i...
Hi BB,

Thanks for sharing I'm too using S&R zones and Trends for setting TP2 sometimes. I combine another method that I have with this one which increased the profitablity. I have 4 methods that I trade with. Two of them on Daily TF and other half on M15. (I consider this system as M15 method). Why don't you trade both your methods ?

Regards,
Basber
Hi Basper,

Thanks for your explanation.

So after the 4 stop losses, we re-enter long and ride all the way to TP2? I understand the losses, but I am still struggling to see how you get 4TP1 and 2TP2 for the day. From what I understand, after the losses, we re-enter for long on the ENTRY line and ride all the way to TP2?

Could you kindly mark them on the chart for me. Sometimes it is clearer than written language.

I thank you for your patience in advance,


Tim.
Attached Image (click to enlarge)
Click to Enlarge Name: Black Friday!.JPG Size: 90 KB
Quoting Basber
Hi BB,

Thanks for sharing I'm too using S&R zones and Trends for setting TP2 sometimes. I combine another method that I have with this one which increased the profitablity. I have 4 methods that I trade with. Two of them on Daily TF and other half on M15. (I consider this system as M15 method). Why don't you trade both your methods ?

Regards,
Basber
I won't risk twice for the similar systems. So an idea has came to my mind that one system could combine with many sub systems, such as applying system A when market is trending, system B if ranging, system C if breakout and so on.... From my past experience, sometimes stand alone system performs bad result and cause unnecessary draw down temporary. Although we could diversify the risk by trading multiple systems and instruments. However, i prefer one system to dominate all systems without risking twice or catch the same movement.

One thing need your advice, does TP2 method works? For my current focusing system, I use previous closing price position to determine my current day trade, if price is ranging i enter, if price is breakout i enter and cancel the ranging order, if price is choppy i enter because i don't know and it doesn't matter of losing some since i look for highest price(Short) or lowest price(Long) of the day.

Thanks.
**Keep Simple**
FxGrowth All Time Return: -1.9%
hey there will i be making cash only by using thay application? DBcal? please reply.
I use Price action right now and i am struggliung so this methot will be good for an alternative till i am perfect on price action?
Here is my little contribution to this wonderful thread:

Copy/Paste the attached Position Size indicator into your MT4 Indicators file.

Open MT4... enter the parameters for (a) your entry and (b) your stop loss and (c) the percentage you are willing to risk on each trade. Voila... it spits out how many lots (or mini-lots) you should be willing to put on each trade.

Wonderful time-saving tool.
Attached File
File Type: mq4 PositionSizeCalculator.mq4   10 KB | 59 downloads
Hi Basper,

I would like to know how you deal with trading the system in the face of news announcements.

How do you deal with widening spreads?

Which news announcements do you take particular note of (if any)?

Do you strictly not trade after the end of the NY session? Or is this a matter of discretion?

As usual, many thanks in advance.


Tim.
Hi Basper and any other experienced system users.

Please could you check my logic for Friday's trade?

Many thanks.

Tim.
Attached Image (click to enlarge)
Click to Enlarge Name: Basper question.JPG Size: 101 KB
Quoting hazel1919
Hi Basper and any other experienced system users.

Please could you check my logic for Friday's trade?

Many thanks.

Tim.
It has been a week since your post so I thought I would make a comment. I'm sure Basber won't mind. Good trending behaviour is not usually expected on a Friday and especially not on the last day of a month. Many large positions are closed on these days and this can be a cause of the whipsaws you have encountered.

Your entries don't seem quite right to me on your chart but I have not read the whole thread so I can't really comment on that. Perhaps someone else can.
Quoting hazel1919
Hi Basper and any other experienced system users.

Please could you check my logic for Friday's trade?

Many thanks.

Tim.
Nope, not right. Tim, please read the whole thread and examples. It's more than enough ..

Regards,
Basber
Quoting smikester
It has been a week since your post so I thought I would make a comment. I'm sure Basber won't mind. Good trending behaviour is not usually expected on a Friday and especially not on the last day of a month. Many large positions are closed on these days and this can be a cause of the whipsaws you have encountered.

Your entries don't seem quite right to me on your chart but I have not read the whole thread so I can't really comment on that. Perhaps someone else can.
Thanks for bringing up such a good point Smikester

I usually break my risk to half it's normal amount in december .. lots of whipsaws.

Regards,
Basber
Quoting hazel1919
Hi Basper,

I would like to know how you deal with trading the system in the face of news announcements.

How do you deal with widening spreads?

Which news announcements do you take particular note of (if any)?

Do you strictly not trade after the end of the NY session? Or is this a matter of discretion?

As usual, many thanks in advance.


Tim.
Hi Tim,

When high impact news is going to hit the market, a) If I'm in market and in profit, I will set SL @ BE ; b) In market & negative, set TP @ BE ; c) remove the orders if not in market.

It depends which news is important. News like jobs or interest rates or etc. usually hits the market significantly. Sometimes announcements from central banks hit the market and sometimes GDP. It depends what market is waiting for. It's better to ignore it if you are new to trading. But if you want to be a professional, you should know what's happening around the globe. It will maximize your profitibility. I usually read the reuters and bloomberg news and decide whether a particular news is important or not, beside the regular high impact news.

I usually remove my orders at the end of NY session. If a trade is open, I'll leave it to be the way it was.

Hope it was helpful

Regards,
Basber
Quoting hazel1919
Here is my little contribution to this wonderful thread:

Copy/Paste the attached Position Size indicator into your MT4 Indicators file.

Open MT4... enter the parameters for (a) your entry and (b) your stop loss and (c) the percentage you are willing to risk on each trade. Voila... it spits out how many lots (or mini-lots) you should be willing to put on each trade.

Wonderful time-saving tool.
Thanks
Quoting surajkincity
hey there will i be making cash only by using thay application? DBcal? please reply.
I use Price action right now and i am struggliung so this methot will be good for an alternative till i am perfect on price action?
First learn the basics. Read some source books. Then search for a proper method to trade. There is no shorter way to reach the goal of being successful in trading ..

Regards,
Basber
Quoting ~bull.bear~
I won't risk twice for the similar systems. So an idea has came to my mind that one system could combine with many sub systems, such as applying system A when market is trending, system B if ranging, system C if breakout and so on.... From my past experience, sometimes stand alone system performs bad result and cause unnecessary draw down temporary. Although we could diversify the risk by trading multiple systems and instruments. However, i prefer one system to dominate all systems without risking twice or catch the same movement.

One thing need...
Sorry but I didn't get the TP2 thing ..!

Regards,
Basber
HI Basber at first i want to say thxxxxxxxxxxx a lot for ur strategy i am a new in Forex from 1 year ago and i want to begin with Daily Break Strategy but i want u post the summery for this strategy and explain the EA i work on FXDD GMT+2 begin with Monday

thx a lot to deathbait
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