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GBP/USD simple breakout system

  • #1
  • First Post: May 12, 2007 7:42am May 12, 2007 7:42am
Hi everyone,
I have too many systems I made myself, some are technical and some are mathematical, I'll try to post here in this forum the mathematical ones

I came out with a very simple breakout system for GBP/USD
All I have to do is to check the high and the low of the previous day
For eg the high and the low for the last Thursday was (high = 1.9660) and (low = 1.9769)
I place 2 orders as follows
Buy entry order @ 1.9960 TP 1.9965 (Yes 5 pips only) I'm using 5 lots
Sell entry order @ 1.9769 TP 1.9764 also using 5 lots
It's 90% + profitable system, I backtested this system from September 2005 up todate
I had 381 win and 26 loss
Maximum loss in every month didn't exceed 2 losses
Avg loss per month = 1 loss
There are months which don't have any loss, for eg April 2007, all executed orders made profit, no loss
I guess that noone will like this system, since I'm risking my account for a daily 5 to 10 pips only, but at the end I got my money in my pocket again
I'm a pip collector so I'm trying to do any system to gain pips even if it is risky and nonsense, no profit without risk

My orders for Monday are:
Buy entry order @ 1.9842 TP 1.9847 X 5 lots
Sell entry order @ 1.9759 TP 1.9754 X 5 lots
Stoploss is at your choice
Best regards and happy trading
  • #2
  • May 12, 2007 8:04am May 12, 2007 8:04am
Nice strategy, thanks for sharing

There is a similar scalping strategy based on the breakout of last day's (or most recent) extremums, but unlike yours it uses no TP but a trailing stop of 10-30 pips instead. Can be quite profitable too if used on multiple pairs (all majors for example). Works also for strong moves after news if orders are set about 5 minutes before news.

People claim to get 100+ pips per day, but I am not sure if it is true, I am going to test it in the following weeks.
Probably aiming for just 5 pips, like you do, is safer.
  • #3
  • May 12, 2007 8:08am May 12, 2007 8:08am
Interesting idea, though risky. Where do you place your stoplosses?

Thanks for posting!
  • #4
  • May 12, 2007 9:59am May 12, 2007 9:59am
Thank you, this system needs more development, this is not the final setup, it would be nice if someone could post his/her ideas or a way to develop this system in a way to make it less risky and to gain more pips
  • #5
  • May 12, 2007 10:02am May 12, 2007 10:02am
One suggestion to increase profits would be to use a feature where the trade breaks even after 5pips profit and then the SL trails by 1-2 pips till it gets stopped out. I am aware there are EAs around that do this sort of thing.
  • #6
  • May 12, 2007 11:20am May 12, 2007 11:20am
This idea has been discussed before under a thread called SRDC 1 which later was developed into SRDC 2 then 3 and 4. The problem is that you cannot set a stop of 5 pips, the stop should at least be 30-40 pips which if hit will wipe out 8 winning trades.

Make a search for SRDC for further information.
Regards
  • #7
  • May 12, 2007 11:52am May 12, 2007 11:52am
Have you estimated, what is the % of successfull trades if you set TP 10 pips instead of 5?
  • #8
  • May 12, 2007 1:38pm May 12, 2007 1:38pm
Howard,
It's different than the SRDC, since in SRDC we add 7 pips to the high and subtract 7 pips from the low, but in my system I take the high and the low as they are

DrainBamage,
Yes I have the results for 10 TP,
266 win and 41 loss since september 2006 till the 11th of May 2007
  • #9
  • May 12, 2007 1:53pm May 12, 2007 1:53pm
DrainBamage,
Yes I have the results for 10 TP,
266 win and 41 loss since september 2006 till the 11th of May 2007[/quote]

But if we made a small calculation
For TP 5
No. of win = 288 X 5 pips(TP) X 5 lots = $7200
No of loss = 26 x 30 pips(SL) X 5 lots = $3900
P/L = 7200 -3900 = $3300

For TP 10
No. of win = 266 X 10 pips(TP) X 5 lots = $13300
No. of loss = 41 X 30 pips(SL) X 5 lots = 6150
P/L = 13300-6150= $7150
  • #10
  • May 12, 2007 2:00pm May 12, 2007 2:00pm

Thanks !!! Looks like 10p is a lot more profitable. I will definetely give it a try.

Quoting pino2
DrainBamage,
Yes I have the results for 10 TP,
266 win and 41 loss since september 2006 till the 11th of May 2007
But if we made a small calculation
For TP 5
No. of win = 288 X 5 pips(TP) X 5 lots = $7200
No of loss = 26 x 30 pips(SL) X 5 lots = $3900
P/L = 7200 -3900 = $3300

For TP 10
No. of win = 266 X 10 pips(TP) X 5 lots = $13300
No. of loss = 41 X 30 pips(SL) X 5 lots = 6150
P/L = 13300-6150= $7150
  • #11
  • May 12, 2007 2:15pm May 12, 2007 2:15pm
Quoting pino2
DrainBamage,
Yes I have the results for 10 TP,
266 win and 41 loss since september 2006 till the 11th of May 2007
But if we made a small calculation
For TP 5
No. of win = 288 X 5 pips(TP) X 5 lots = $7200
No of loss = 26 x 30 pips(SL) X 5 lots = $3900
P/L = 7200 -3900 = $3300

For TP 10
No. of win = 266 X 10 pips(TP) X 5 lots = $13300
No. of loss = 41 X 30 pips(SL) X 5 lots = 6150
P/L = 13300-6150= $7150[/quote]


I'm very sorry I posted some wrong numbers by mistake
First I mentioned in this post that the result is from September 2006 and the correct date is september 2005

The correction of the results written above
For TP 5
No. of win = 381 X 5 pips(TP) X 5 lots = $9525
No of loss = 26 x 30 pips(SL) X 5 lots = $3900
P/L = 9525 -3900 = $5625

For TP 10
No. of win = 366 X 10 pips(TP) X 5 lots = $18300
No. of loss = 41 X 30 pips(SL) X 5 lots = 6150
P/L = 18300-6150= $12150

Whoever wants to check the results to bring a daily hystorical data from september 2005 to May 11th 2007 and apply on TP 5 pips and 10 pips

Sorry for mistyping in the last post
  • #12
  • May 12, 2007 4:30pm May 12, 2007 4:30pm
Pino2, Thanks for bringing up this idea, very simple to see and results are promising. But in a bad run, for example, if the very first or few trades touch the entry price and did not touch the TP and IF the price turnes against, where to put the SL? Please explain. Thanks. http://www.forexfactory.com/images/icons/icon7.gif
  • #13
  • May 12, 2007 5:09pm May 12, 2007 5:09pm
Looks like to me its 30 pips sl from Hi or low. Pretty obvious


Quoting MegaPips
Pino2, Thanks for bringing up this idea, very simple to see and results are promising. But in a bad run, for example, if the very first or few trades touch the entry price and did not touch the TP and IF the price turnes against, where to put the SL? Please explain. Thanks. http://www.forexfactory.com/images/icons/icon7.gif
  • #14
  • May 12, 2007 5:19pm May 12, 2007 5:19pm
Quoting alsup1955
Looks like to me its 30 pips sl from Hi or low. Pretty obvious
Thanks. My mistake, I only looked at the profit and loss!!!!
  • #15
  • May 12, 2007 6:04pm May 12, 2007 6:04pm
Hi, this is a very simple but profitable system and it definitely looks good. Can anyone write an EA for this?
  • #16
  • Edited 8:28pm May 12, 2007 7:23pm | Edited 8:28pm
Quoting pino2
But if we made a small calculation
For TP 5
No. of win = 288 X 5 pips(TP) X 5 lots = $7200
No of loss = 26 x 30 pips(SL) X 5 lots = $3900
P/L = 7200 -3900 = $3300

For TP 10
No. of win = 266 X 10 pips(TP) X 5 lots = $13300
No. of loss = 41 X 30 pips(SL) X 5 lots = 6150
P/L = 13300-6150= $7150

I'm very sorry I posted some wrong numbers by mistake
First I mentioned in this post that the result is from September 2006 and the correct date is september 2005

The correction of the results written above
For TP 5
No. of win = 381 X 5 pips(TP) X 5 lots = $9525
No of loss = 26 x 30 pips(SL) X 5 lots = $3900
P/L = 9525 -3900 = $5625

For TP 10
No. of win = 366 X 10 pips(TP) X 5 lots = $18300
No. of loss = 41 X 30 pips(SL) X 5 lots = 6150
P/L = 18300-6150= $12150

Whoever wants to check the results to bring a daily hystorical data from september 2005 to May 11th 2007 and apply on TP 5 pips and 10 pips

Sorry for mistyping in the last post[/quote]

Which broker did you use for your backtest?
Also I assume you made allowance for the spread for the buys?
Is this a set and forget system?
Are unfilled order canceled at the end of the day?


Thanks
  • #17
  • May 12, 2007 9:07pm May 12, 2007 9:07pm
Pino2, thanks for sharing your method. It looks like a good one.

Could you please answer some questions about it -
- what time does your daily candle close? Midnight GMT? Midnight Eastern time?
- how do you treat the weekends - do you combine Friday's range with Sunday's range for Monday's trade? Do you treat each day separately and trade on Sunday using Friday's prices? Or..?

Thanks for all your help!
  • #18
  • May 12, 2007 9:08pm May 12, 2007 9:08pm
Me and my friend are developing an EA for that... but... where did you get those results? You made visual observations on the chart or used an indicator to calculate it?

This indicator might help you guys.
Attached File(s)
File Type: mq4 HiLoAvg.mq4   2 KB | 1,986 downloads
  • #19
  • May 12, 2007 11:35pm May 12, 2007 11:35pm
Well if I'm not wrong, I believe pino2 has an EA already for it.
  • #20
  • May 13, 2007 2:35am May 13, 2007 2:35am
Quoting Shutterbug
Pino2, thanks for sharing your method. It looks like a good one.

Could you please answer some questions about it -
- what time does your daily candle close? Midnight GMT? Midnight Eastern time?
- how do you treat the weekends - do you combine Friday's range with Sunday's range for Monday's trade? Do you treat each day separately and trade on Sunday using Friday's prices? Or..?

Thanks for all your help!
Hi Shutterbug,
I use the high and the low of the day, at the end of the US session, Midnight GMT

Yes I use Friday price, the high and the low of friday for example I used the high and the low of the last friday :
The High and the low of the day was High = 1.9842 and low = 1.9759
Buy entry order @ 1.9842 TP 1.9847
Sell entry order @ 1.9759 TP 1.9754

Best regards
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