Hi Everyone,
I'm currently looking at a very simple breakout trade for the GBP/JPY and I'm in the middle of backtesting it, but at the moment it looks really good.
I thought I would post it here before I finished the testing just in case anyone had any comments/thoughts that I could add into the testing to try and get a more detailed picture.
The strategy goes as follows - oh and just before anyone asks - I'm in the Channel Islands so I'm on UK time and all the times I give are UK times.
Take a chart of the GBP/JPY - any time frame less than 1 hour - but for entry purposes a 5 min chart would be ok.
Place a high and low on the chart which covers the time frame from 17.00 the previous day to 8.00am (or close of 7.55am candle on the 5min chart). This is taken an hour after the close of the London market the previous day and right up to the open of London on the current day.
When the high or low of this timeframe is broken between 8.00am and before 11.00am then place a trade in this direction. The theory behind this is that this time window is when the market is liable to move, by 11.00am it has made it's main run and has settled down for the day.
At the moment I'm looking at exit strategies - 40 pips (+8 pip spread) is nearly always achievable, but there are days when over 70 pips is possible. So perhaps a trailing stop strategy would be better to lock in profits. Another alternative is just to let the trade run and exit at 16.00 (close of UK markets). On a number of occasions this will lock in a sizeable profit, though there are days when it has gone your way and then come back by 40 pips leaving you only 10 pips profit.
My stop loss at the moment is 33 pips (25 pips + 8 pip spread).
At the moment the win ratio is 77%, but I'm only about halfway through the data that I have available.
Non-Farm payroll day is another day that I will have to look at, as by giving it a wider stop and greater target it could prove very profitable. I will come back with some more data on this later.
Anyway that's the theory; I'm now looking for any comments/thoughts/ideas.
I'm currently looking at a very simple breakout trade for the GBP/JPY and I'm in the middle of backtesting it, but at the moment it looks really good.
I thought I would post it here before I finished the testing just in case anyone had any comments/thoughts that I could add into the testing to try and get a more detailed picture.
The strategy goes as follows - oh and just before anyone asks - I'm in the Channel Islands so I'm on UK time and all the times I give are UK times.
Take a chart of the GBP/JPY - any time frame less than 1 hour - but for entry purposes a 5 min chart would be ok.
Place a high and low on the chart which covers the time frame from 17.00 the previous day to 8.00am (or close of 7.55am candle on the 5min chart). This is taken an hour after the close of the London market the previous day and right up to the open of London on the current day.
When the high or low of this timeframe is broken between 8.00am and before 11.00am then place a trade in this direction. The theory behind this is that this time window is when the market is liable to move, by 11.00am it has made it's main run and has settled down for the day.
At the moment I'm looking at exit strategies - 40 pips (+8 pip spread) is nearly always achievable, but there are days when over 70 pips is possible. So perhaps a trailing stop strategy would be better to lock in profits. Another alternative is just to let the trade run and exit at 16.00 (close of UK markets). On a number of occasions this will lock in a sizeable profit, though there are days when it has gone your way and then come back by 40 pips leaving you only 10 pips profit.
My stop loss at the moment is 33 pips (25 pips + 8 pip spread).
At the moment the win ratio is 77%, but I'm only about halfway through the data that I have available.
Non-Farm payroll day is another day that I will have to look at, as by giving it a wider stop and greater target it could prove very profitable. I will come back with some more data on this later.
Anyway that's the theory; I'm now looking for any comments/thoughts/ideas.
