Catching the morning train

Hi,

This is a break out strategy that I learned which works very well, it is very simple and uses no indicators, anyone can trade it.

This works on EUR/CHF/JPY/GBP, what you are trying to do i catch the daily move if there is one.


1. Open a 30 min chart on the pair.

2. At 8am look at the first 30 min bar when it closes draw horizontal lines at the high + 2 pips and low - 2 pips.

3. If a bar closes 2 pips above the high of the first bar, you buy. If it closes 2 pips below the low you sell. If no bar has closed above or below by 4pm close then no trade.

4. Close trade at 5pm.

5. If price closes above then reverses below the low by 2 pips you sell 2x the first position so you basically take the loss but get in the other way which will hopefully reduce the loss/wipe it / or even get you profit. Vice-versa for the other way.

6. Stick to the rules above, use proper Money management and as always try it before you go in.

Times (Change +1 in BST)
08:00 GMT - First 30 min bar opens
08:30 GMT - First 30 min bar closes = this is our reference bar.
16:00 GMT - If no trades we quit.
17:00 GMT - Close any trades. This is the only way we take profit.

I'm in the process of back-testing this but I have limited time but I am going to write automated back-test to fine tune the start/end hour.

Feel free to ask any questions.

UPDATE : Fixed the chart as chart uses GMT + 3 so open on chart is 11 and close is 20.

Below is an example from today EURO. Stop loss would have been 34 pips. Profit 94 pips. This is a system where you will make small losses/profits and now and then catch a big move. The main thing is sticking to the rules.

Making money is very easy once you have a profitable system and money management.

What is the timing based on? GMT?
Would you keep doubling if you have
a ranging day?

Thanks

Hi Aelimian,

Yes its based on GMT. I would only double once so the second stop would be just 1 lot rather than 2 (or whatever size you use).

Mark

What is the take profit strategy

Hi okehiedon,

You just close the trade at 5pm GMT (if there was one that day), so its a time based exit, and its important you stick to that.

This method will only work if you stick to the rules, it will allow you to have a tight stop and catch any big moves. An example.

UPDATED: fixed per new chart.

$10,000 account.
Risk 5% = $500.

Stop loss on todays trade was 34 pips = @$15 per pip.

Profit was 94 = $1410 in one day. And that is typical for this system.

The system is based on price only no other indicators. Its so simple the hard part is sticking to it, if you can do that and compound your profits then you can increase your account . All you need is to catch the big daily move and this system will allow you to be there when it happens with a small stop loss, therefore bigger position, therefore bigger profit.

Hi... interesting system.

I think where people are going to get confused is where you mention things like 5 PM GMT. What you mean is just 0500 GMT. The PM makes one believe that it could be something else.

Anyway, I am going to take a good look at this sytem. I really like these breakout systems. Thanks for sharing.

Thanks to share your interesting system Mark , I will give it a try next week for sure ! What about the stop loss ?
Thanks
Luk

anyone though about "catching the evening train" ? "catching the first train" ? "catching the last train" ? or maybe taking a bus ?

Incorrect, 5pm GMT is 17:00 GMT - you're the one confusing things here!

5 PM GMT would actually be 1700 GMT.......... 0500 is AM......
The whole time thing is where most people get confused....

So with that in mind....... the start is at 0800 GMT and the close is 1700 GMT...... GMT is a 24 hour clock mode.

Yes I should have been more clear about that, the start and end times
08:00 GMT - First 30 min bar opens
08:30 GMT - First 30 min bar closes = this is our reference bar.
16:00 GMT - If no trades we quit.
17:00 GMT - Close any trades. This is the only way we take profit.

The times could be adjusted based on backtesting but roughly they have to be start of session till end. No trades in last hour of session though.

The stop loss is explained in the the first post point 5.

Sorry about that. But why use 5 pm at all then and just say 17:00 GMT? That's all I was getting at.

May I clarify whether you open a buy/sell position upon the break of the horizontal lines or are you buying after the 30 min bar closes above/below the horizontal lines? Means you wait for the candle to close.

Thx

An interesting concept, will try it on Monday Morning.

An example of a very bad day...

You got the time wrong,in your chart it should be 3 hours earlier.

Oh can you explain why? I tot the time is 8 GMT ??

i think the morning train could be used to refer to the first hour of the major market opening i.e, Tokyo, London or New York. it is more straightforward to say in this way, as the opening hour could be shifting due to the daylight saving.