Another Daily Range Strategy GBP/USD

Hello,

I thought it best not to hijack micardo's thread as it has probably produced a much better strategy than what i have come up with.

I thought of this strategy before reading up on the forums, micardo is using a similar theory and has been fairly successfull.

I've attatched a word document that roughly explains how it would work - read this first, then the rest of the post

I have finalised what i want to use as the Range (ie: when to enter the trade) the profit margin (in pips) or my Stop loss (in pips).

My thinking was:

Range: 30 pips above or below 00.00GMT
Profit: 10 Pips
Stop: 30 pips

Range: 40 pips above or below 00.00GMT
Profit: 14 Pips
Stop: 40 pips

Range: 50 pips above or below 00.00GMT
Profit: 17 Pips
Stop: 50 pips

I havn't done any backtesting as such, so if anybody wants to do it feel free, as i'm not really sure how to without doing it manually day by day.

Any feedback or constructive critisism will be appreciated.

Thanks

Heres the document

Hey kwackers,

Thanks for sharing your system! Some things that concern me with it are the risk/reward ratio. You are risking nearly 300% of what you could potentially make. Which means you better be winning a hell of a lot of times to make up for losses! I hope this makes sense.

Good luck,

Kevin

Yeah, that's what jumped out at me, too.

yeh need an 80% win ratio to make 4 pips, i guess i see where your coming from!

could this be adapted, i'm sure testing could show that either the win ratio would be high, or that the stops could be lowered considerably

i mean they probably would all be ok on a 30 pip stop loss.

Think i'm going to try

50 pip Range from GMT 00.00, 20 pip profit, 25 pip stop loss.


See how that goes.

Where can i find charts where i can study prices from 00.00GMT to try and figure out the accuracy of results?

Good ol' I B F X uses the 00:00 GMT frame for their charts.

I do my backtests manually with a 15' minutes chart and the crossline over it. i look what happens day by day.

If 15' minutes chart not clear, only on this particular day i use a shorter timer chart.
It takes a lot of time, and perhaps it's not exactly. But it's the only way i have for it.

What worries me from this strategy, is that it goes against a forex's golden rule: "follow the trend".

Let's test and let's see.

Risk vs. Reward

The trend shows theres almost always a drawback of 20 pips, hence my method.

Risk vs reward - for sure, but pip profit vs stop loss is just the basis, facotring in the probablity of it hitting either each trade is the more complicated version, which will be shown from backtests.

I'm still trying to see where the best place to set the pip range from 00.00GMT time , pip profit, and stop loss - then may be able to come up with something fairly decent, or at lewast profitable in the long run.

Thanks for taking the time to view the thread anyway

I've done some thinking about what you're doing here. Such small profit targets are ridiculous. You're trying to play the noise of the market. Take a step back on the time frame if you're looking for a few pips. Look at the overall movement and price action to see what's really happening. You should be able to spot the momentum pretty easily. Place a buy/sell and set your TP/SL. There should be a clear point that you realize you're wrong. Place the SL there. Let the profits run.

We don't call him Kwackers for nothing you know

Ahh well...

Position opened:
Sell

1.9658

Stop 1.9683
Limit 1.9643

Currently at 1.9663

Closed at 09.44 GMT at the 15 Pip limit for a $1,500 profit

Day one, Successfull

Hi

We just call it 15 pips, whether it is worth $1.5 or $ 15000 that would depend on leverage and MM

Day 2 1st order closed out at a 20 pip loss, the 2nd trade opened and made 15 pips.

So 10 pips up over 2 days

My trade today with this system was a 20 pip winner...
Which was your entry?
I went long at 1.9731, closed at 1.9751.

Lets see tomorrow..

Dan.

I know people are probably in doubt, i am myself.

Can anyone point me towards a backtest.

I've figured with pretty much any strategy thats making money you can increase profits by:

Backtesting, with SL, TP and the Range Values - Obviously, but specfic moments in time.

Significant new releases that are released the same time every year, months like January, august and december, where some the market might not be ranging as much maybe set a limit on a time, it seems like a lot of work, but if you end up with a Good strategy, might be worth it.


1.9751 open 1.9771close

Managed to get some backtesting done

GBP/USD DOES seem like the favourite pair.

Sorry Cant get attatchment to work