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(binned per thread starter’s request) High/Low Breakout: a simple

  • #1
  • First Post: Edited Aug 21, 2018 6:05am Jun 27, 2017 6:39pm | Edited Aug 21, 2018 6:05am
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  • #2
  • Jun 28, 2017 2:35am Jun 28, 2017 2:35am
Here are today's entries - a truly easy system! Note that my broker uses NY candles close so I use tradingview charts to reduce confusion.

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  • #3
  • Jun 28, 2017 3:55am Jun 28, 2017 3:55am
Seems interesting, i have tried this approach before, but my main struggle was determining the entry time and previous period for high and low price range to place orders accurately. In my own opinion the timing for entry must vary between different pairs. That's just my thoughts from my previous experiences trying this strategy. Hope it works better for you.
  • #4
  • Jun 28, 2017 4:19am Jun 28, 2017 4:19am
EA is maybe good for this one.
  • #5
  • Jun 28, 2017 7:13am Jun 28, 2017 7:13am
Quoting Rmk90
Seems interesting, i have tried this approach before, but my main struggle was determining the entry time and previous period for high and low price range to place orders accurately. In my own opinion the timing for entry must vary between different pairs. That's just my thoughts from my previous experiences trying this strategy. Hope it works better for you.

I love breakout strategies .... but no more profitable with blind entries (only with cross hi / lo)
I Use Stochastic + Priceaction for better timing ... and hi/lo using like support and ressistance
Looks better and profitable
Cheers
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  • #6
  • Jun 28, 2017 7:22am Jun 28, 2017 7:22am
Here's the outcome from today's trade - can it be any simpler? Entered and hit TP on the same candle!

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  • #7
  • Jun 28, 2017 7:27am Jun 28, 2017 7:27am
look like easy and simple strategy thanks for sharing....will be test on my demo account
  • #8
  • Jun 28, 2017 9:40am Jun 28, 2017 9:40am
[quote=Ivanyo;10027070] Trading Rules: (quoted directly from original thread, but I have included NY time for convenience) 1 - Open your chart on 08:00 AM (GMT). <4:00 NY time> 2 - Find the Maximum Price and Minimum Price between 21:00 PM (GMT) to 08:00 AM (GMT). <18:00-4:00 NY time> 3 - You have 2 numbers. Maximum Price & Minimum Price. Now should open 2 pending orders: Buy Stop: At: (Maximum Price + 2 pips) T/P: (Maximum Price + (Maximum Price - Minimum Price)) S/L: (Minimum Price - 2 pips) Expiry: Next trading day at 08:00 AM (GMT) <4:00 NY time> Sell Stop: At (Minimum Price - 2 pips) T/P (Minimum Price - (Maximum Price - Minimum Price)) S/L (Maximum Price + 2 pips) Expiry: Next trading day at 08:00 AM (GMT) <4:00 NY time>

Hi Ivanyo,

From your trading rules, this is a simple range breakout strategy with a 1:1 risk:reward structure. Thus, it can only be net profitable over time if the success rate is >50%.

I have done many tests of many similar concepts over the years and the bad news is that the trade is basically a coin toss over the long haul, i.e. the success rate hovers pretty near 50% so the expected profitability of the system is zero, plus you have to bear round trip transaction costs.

Such concepts will only be profitable in the long haul if:
1. it is structured so that the reward:risk is inherently better than 1:1 and/or
2. some additional entry filters are incorporated to bring the success rate above 50%

Hope that helps
  • #9
  • Jun 28, 2017 9:41am Jun 28, 2017 9:41am
In this system I could not understand about tp. Anyone can plz explain?
  • #10
  • Jun 28, 2017 4:26pm Jun 28, 2017 4:26pm
Quoting marcmarc
Quoting Ivanyo
Trading Rules: (quoted directly from original thread, but I have included NY time for convenience) 1 - Open your chart on 08:00 AM (GMT). <4:00 NY time> 2 - Find the Maximum Price and Minimum Price between 21:00 PM (GMT) to 08:00 AM (GMT). <18:00-4:00 NY time> 3 - You have 2 numbers. Maximum Price & Minimum Price. Now should open 2 pending orders: Buy Stop: At: (Maximum Price + 2 pips) T/P: (Maximum Price + (Maximum Price - Minimum Price)) S/L: (Minimum Price - 2 pips) Expiry: Next trading day at 08:00 AM (GMT) <4:00 NY time>
...
That is why we are testing this strategy - we can make adjustments as we see fit but at the moment I would like to conduct my own independent tests for at least 100 trades to see if we need to make changes before taking anybody's word for it. That is how everyone should approach strategies shared in threads and forums - with a grain of salt and with independent judgement before taking anybody's words as gospel. I started this thread to share my discoveries - hope you will join me.

For instance, here are the results of 13 week's trading from the original thread on babypips. What you will notice is that when the market runs, you will be in profit every single day.

Result in pips:
2010.08.27
2010.08.26
2010.08.25 +73
2010.08.24 No Trade
2010.08.23 +90
Sum of above week: +18 pips

2010.08.20 +60
2010.08.19 -93
2010.08.18 +90
2010.08.17 +67
2010.08.16 -106
Sum of above week: +18 pips

2010.08.13 No trade
2010.08.12 -99
2010.08.11 +102
2010.08.10 -131
2010.08.09 + 53
Sum of above week: +3 pips

2010.08.06 -52 +52
2010.08.05 -91
2010.08.04 +48
2010.08.03 -97
2010.08.02 +102
Sum of above week: -38 pips

2010.07.30 -58 +58
2010.07.29 -71
2010.07.28 -64 -64
2010.07.27 -69 +69
2010.07.26 +91
Sum of above week: +20 pips

2010.07.23 +68
2010.07.22 +61
2010.07.21 No Trade
2010.07.20 -98
2010.07.19 +83
Sum of above week: +119 pips

2010.07.16 +71
2010.07.15 +54
2010.07.14 +87
2010.07.13 +82
2010.07.12 -121 +121
Sum of above week: +294 pips

2010.07.09 +70
2010.07.08 +79
2010.07.07 +74
2010.07.06 -125
2010.07.05 +41
Sum of above week: +139 pips
2010.07.02 -53
2010.07.01 +101
2010.06.30 +45
2010.06.29 +75
2010.06.28 +52
Sum of above week: +220 pips

2010.06.25 -62 +62
2010.06.24 -70 -70
2010.06.23 +75
2010.06.22 -72 +72
2010.06.21 -130
Sum of above week: -195 pips
2010.06.18 -80 -80
2010.06.17 +92
2010.06.16 -65 -65
2010.06.15 -72 +72
2010.06.14 +121
Sum of above week: -77 pips

2010.06.11 +70
2010.06.10 +111
2010.06.09 +92
2010.06.08 +68
2010.06.07 +73
Sum of above week: +314 pips

2010.06.04 -46 +46
2010.06.03 +108
2010.06.02 +139
2010.06.01 +103
2010.05.30 +98
Sum of above week: +448 pips

Quoting khattak23
In this system I could not understand about tp. Anyone can plz explain?
Re-read the first post again until you understand - it is fairly straight forward.
  • #11
  • Jun 28, 2017 4:49pm Jun 28, 2017 4:49pm
Quoting marcmarc
Quoting Ivanyo
Trading Rules: (quoted directly from original thread, but I have included NY time for convenience) 1 - Open your chart on 08:00 AM (GMT). <4:00 NY time> 2 - Find the Maximum Price and Minimum Price between 21:00 PM (GMT) to 08:00 AM (GMT). <18:00-4:00 NY time> 3 - You have 2 numbers. Maximum Price & Minimum Price. Now should open 2 pending orders: Buy Stop: At: (Maximum Price + 2 pips) T/P: (Maximum Price + (Maximum Price - Minimum Price)) S/L: (Minimum Price - 2 pips) Expiry: Next trading day at 08:00 AM (GMT) <4:00 NY time>
...
I agree.

I was thinking of not just a simple breakout but when the price breaks the line and closes above the line in 1hr tf than you look to see if the bar is tradable, meaning; is it an exhaustion bar? If it is than don't trade. How to determine? I don't know. For example you can measure the closed bar from the line it broke to its closing price and if that measurement is more than 3 times the ATR than don't trade. Also you can use 200 sma on the daily bar to see if price is above 200 sma, If it is you only trade long. I mean you can add a lot of filters but they have to make sense. What I wouldn't add as a filter for example is a simple crossover of Stoch lines or MA lines. The 200 sma on daily is very powerful as it is used by institutions.
  • #12
  • Jun 28, 2017 4:50pm Jun 28, 2017 4:50pm
I'm in and ready to learn more. i see what it can improve my breakout EA. Thanks for sharing my friend.
SVT refer to mql5 link
  • #13
  • Edited 6:35pm Jun 28, 2017 4:58pm | Edited 6:35pm
Quoting SubheadSeven
I'm in and ready to learn more. i see what it can improve my breakout EA. Thanks for sharing my friend.
Seems like your system is doing fine as it is based on your TE - welcome aboard! Glad to have you here.

Just make sure you are keeping track of your losses and don't let them get too big!
  • #14
  • Edited 9:29pm Jun 28, 2017 8:16pm | Edited 9:29pm
Quoting Ivanyo
Hello fellow trader! I've dabbled in and out of trading strategies until now and came across such a simple but easy strategy on babypips which I thought I'd share. Because I work full time and am based in Australia, most forex activity occurs whilst I'm asleep so I had to find a system which would allow me to take advantage of that activity whilst I was asleep, without actually being present and actively watching the charts - this can be done via breakout trading. I have not back tested this strategy but the people over at babypips .....
This may save you some time. It seems a bit flat in back-testing... I even added a break-even compenent (on open positions) after expiration time to make it more profitable.
  • #15
  • Jun 28, 2017 8:41pm Jun 28, 2017 8:41pm
Quoting Nicholishen
{quote} This may save you some time. It seems a bit flat in back-testing... I even added a break-even compenent (on open positions) after expiration time to make it more profitable. {file}
Hi - thanks for sharing. Care to explain or provide some insight to how the settings work? I'm wondering if it will exactly replicate what we are doing manually on a daily basis.
  • #16
  • Jun 28, 2017 9:20pm Jun 28, 2017 9:20pm
Quoting Ivanyo
{quote} Hi - thanks for sharing. Care to explain or provide some insight to how the settings work? I'm wondering if it will exactly replicate what we are doing manually on a daily basis.
Yes exact replica. No settings needed. Only caveat this assumes your broker is already on GMT.
  • #17
  • Jun 28, 2017 9:25pm Jun 28, 2017 9:25pm
Quoting Nicholishen
{quote} Yes exact replica. No settings needed. Only caveat this assumes your broker is already on GMT.
Any way to change the times if my broker isn't?
  • #18
  • Jun 28, 2017 9:28pm Jun 28, 2017 9:28pm
Quoting Ivanyo
{quote} Any way to change the times if my broker isn't?
Here...
Attached File(s)
File Type: ex4 High_Low_Breakout_1_2.ex4   43 KB | 408 downloads
  • #19
  • Jun 28, 2017 10:33pm Jun 28, 2017 10:33pm
Quoting Nicholishen
{quote} Here... {file}
Thanks - I will test on a demo account before using on a real account.
  • #20
  • Edited 11:58pm Jun 28, 2017 11:43pm | Edited 11:58pm
Quoting Ivanyo
{quote} What you will notice is that when the market runs, you will be in profit every single day.
Hi Ivanyo,

You are right to want to conduct your own tests otherwise you won't really believe the results if it just comes from someone else; that's exactly why I ran my own tests. Several times my initial tests suggested I had discovered a winning strategy, only to find that when I expanded the time period and/or tried it on other markets, the result disappeared and I was back to a break-even strategy overall. Very frustrating but an excellent learning curve!

As for range breakout strategies on a 1:1 risk:reward structure, your above quote sums it up perfectly: they are profitable in trending periods and lose consistently in choppier times.

Actually, this observation is pretty much true for pretty much all strategies: they tend to win in trends and lose in choppier markets; or vice-versa. It strongly suggests that for just about any strategy you need a market condition filter so you only place trades in favourable conditions.
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