EURUSD Box Breakout

Hi all

This is an offshoot of the 0400-0700 GMT Breakout Strategy found here: http://www.forexfactory.com/showthread.php?t=183582

Out of necessity I altered this system to a 06:00 - 08:45 GMT time frame. with trade rules as follows:

On the M15 chart
Long entry at the high reached between 06:00 - 08:45 GMT
S/L at the low reached between 06:00 - 08:45 GMT

Short entry at the low reached between 06:00 - 08:45 GMT
S/L at the high reached between 06:00 - 08:45 GMT

Average box size is 31 pips, so that is our average loss if we get stopped out. If a trade does not trigger by 20:00 GMT, then I cancel it. I do not re-enter. I do not pyramid or use a Martingale method. I wanted to make and keep this as simple as possible.

As for TP, I have analyzed the results and came up with two TP's:9 pips and 13 pips. I know it does not sound huge, however I am all about frequency. I want a higher probability of wins than otherwise. In fact since the beginning of Feb 2010 though July 9th 2010, results have been as follows:
with 9 pip TP: 759 pips at 78.95% win rate
with 13 pip TP: 887 pips at 73.68% win rate

I began trading this with a 30 pip TP. It worked well at first, however did not fare so well when the EUR began trading choppy. I tested TP's of 1 pip through 60 pips and 9 and 13 came back with the best win rates and frequency. I am happy to provide the outcomes of any other targets if you like.

I have manually tracked my results since the beginning of Feb 2010 in a spreadsheet with data points and have began trading this on a live account. I began trading this on ToS (thinkorswim) and now have MT4.

This is where you come in...
I would like any feedback from anyone out there on how to make this system better. Also, and more importantly, if anyone out there can assist in creating an EA for this system, it would be fantastic. I think there could be great success in this system and I look forward in hearing from anyone out there with constructive ideas. Many thanks in advance!

Hi Hinkognito,

No disrespect, but the profitabilty of this setup is questionable.

Let's take 4 trades: (75% win rate)
1 Losing trade = -31 pips (your average)
3 Winning trades = +27 pips (9 pips per trade)
Net pips = - 4 pips

Your reported winning% is slightly higher (you hope), but is largely offset by the spread you have to pay on each and every trade. Your account will be in a free fall if the winning% falters. I would rethink a strategy that has such a lousy risk to reward ratio. Sorry...

Keep on trucking!

Thanks Bobcat,

No disrespect taken. I have been battling with this myself, which is why I have opted for a low TP with very high frequency. I have been playing this live with 1 mini lot in a small account (just so I wont blow myself up)and have been making incremental gains, even with the occasional loss.

Also thought about experimenting with TP of 13 them moving SL to +1 pip.

Appreciate the feedback!

who told that u ll have only 3 winning in a row??

hinkognito: check 'simple london breakout thread'..

You might consider changing your exit. Take half off and set the other half at zero loss and set a target of at least what you put at risk on the second half.

Or, since the first half is a guaranteed 4 pip loss, use this as your control for the stop loss of zero when you hit target of 9/13 pips. If not stopped out let it ride to what you risk. If you get better than a 50%target ratio for your new target of equa the risk, a 25% for loss, and 25% for getting zero pips, that should get you a win ratio of 50%.

Here are two charts depicting the results of various TP's using this system.
the blue bars represent total pips from the sample period (Feb 2010 - July 9th 2010) and the orange diamonds are the frequency of occurrence.

Again, I am not reentering (meaning one long trade if triggered and one short trade if triggered per day) if I get stopped out and using the opposite side of the box as SL.

Simple,

No one to my knowledge stated, " u ll have only 3 winning in a row"...including me.