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Daily 10% Breakout

  • #1
  • First Post: Jun 16, 2009 11:54pm Jun 16, 2009 11:54pm
This system is meant to be a simple fix and forget daily breakout system. It is derived from the daily range of the previous day, and hinges on the hope that today will have a breakout of 10-15%. This is not a system that will give you a home run in one day, but will hopefully give you steady cash flow regardless of market conditions. I would try it with any pair, but to date I have only seen proven success with USD/JPY. As with any system proper equity management is key.

Guidelines

1.Calculate previous day’s range.
2.Set a Buy and a Sell order 10% above and below current close price.
3.Set a Stop Loss at 2 times your Buy or Sell order.
4.Set a Target Profit at 10% above or below your Buy or Sell order.
5.Keeping Equity Management in mind set a new order before each major session open. Close any trade that has been open for 24 hrs.

Background
This system is not 100% original it is born from the Daily Quarter System or Simple Trading with Daily Range. I have been following these two treads for the past month or so and noticed that although they do work, the reward to risk ratio was 1:2, and I was losing pips. At 1:2 ratio you need to win approx 67%+ of the time with the daily range being consistent to breakeven. The best way to increase win % was to lower the TP % from 25% to 10% of daily range. You will sacrifice daily pips, but will win more often, which in turn will increase your profits.



Using Daily 10% only

Preformace SummaryWin %Total WinsLose %Total TradesNet Pips

Pairs
USD/JPY90% 18 10% 20 168
GBP/JPY50% 1 50% 2 (31)
EUR/JPY0% - 100% 1 (53)
GBP/USD50% 3 50% 6 (91)
USD/CAD0% - 100% 1 (171)
Totals 30 (178)

As you can see USD/JPY is by far the pair to use this system on. I think EUR/JPY, GBP/JPY, and GBP/USD can work, but will need more tinkering with percentages and open times to make work.


See attached for complete details of the system.
Attached File(s)
File Type: pdf Daily 10.pdf   273 KB | 3,478 downloads
  • #2
  • Jun 17, 2009 12:17am Jun 17, 2009 12:17am
Hi truckjrt,

Another interesting breakout variation...I assume you are taking the daily range with the candle ending @ 00:00 GMT? That translates into 7:00PM CDT.

What do you think accounts for the singular success of the USD/JPY currency pair?

Since UJ is winning more than 90% of the time, do the results of the daily trades generally occur during the Asian session?

Thanks for sharing,
Bob
  • #3
  • Jun 17, 2009 1:28am Jun 17, 2009 1:28am
Here's my trade for tonight:

Data from IBFX
USD/JPY
Daily Close:23:59 GMT
Daily Range 175 pips
Close Price: 96.00
Buy: 96.18
Buy TP: 96.36 = +18 Pips Profit
Buy SL: 95.82 = -36 Pips Risk

Pending order filled and Take Profit of +18 pips within the 1st hour of the new day.

Thanks Truck!
  • #4
  • Jun 17, 2009 6:48am Jun 17, 2009 6:48am
Quoting Bobcat2
Hi truckjrt,

Another interesting breakout variation...I assume you are taking the daily range with the candle ending @ 00:00 GMT? That translates into 7:00PM CDT.

What do you think accounts for the singular success of the USD/JPY currency pair?

Since UJ is winning more than 90% of the time, do the results of the daily trades generally occur during the Asian session?

Thanks for sharing,
Bob
I have been taking the daily range ending at 10:00 or 11:00 pm CDT, which should be 5 or 6 GMT.

The majority of my results have happened quick, that is the reason you can set orders before each major session.
  • #5
  • Jun 17, 2009 9:06am Jun 17, 2009 9:06am
Quoting truckjrt
I have been taking the daily range ending at 10:00 or 11:00 pm CDT, which should be 5 or 6 GMT.

The majority of my results have happened quick, that is the reason you can set orders before each major session.

May I ask why you have arbitrarily chosen 10:00 or 11:00 PM CDT? 7:00 PM is the official new day for many brokers.

Also, what do you think about placing a 2nd trade with a higher TP? The reason I pose this question, is that you have already achieved a 90% win rate with your current TP level. Since the likelihood of reaching the TP goal is so high, and if we set the 2nd order at break even when TP1 is reached, we essentially have a free trade 90% of the time for the 2nd order. Taking a higher TP on the second order would automatically further enhance the risk to reward ratio, as well.

Do you think this strategy would apply to the beginning of the major market opens, Asian, London and New York?
  • #6
  • Jun 17, 2009 6:14pm Jun 17, 2009 6:14pm
Quoting Bobcat2
May I ask why you have arbitrarily chosen 10:00 or 11:00 PM CDT? 7:00 PM is the official new day for many brokers.

Also, what do you think about placing a 2nd trade with a higher TP? The reason I pose this question, is that you have already achieved a 90% win rate with your current TP level. Since the likelihood of reaching the TP goal is so high, and if we set the 2nd order at break even when TP1 is reached, we essentially have a free trade 90% of the time for the 2nd order. Taking a higher TP on the second order would automatically further...
I use 10 or 11 b/c that is when I am going to bed and its before the London open. I have found that as long as you have your entries set before any of the sessions open then you should be good.


I have tinkered idea with a second trade at TP with SL at breakeven. Currently I am setting two trades one at 10% and at 15% of daily range. and So far the 15% has been just a profitable as the 10%.
  • #7
  • Jun 17, 2009 11:49pm Jun 17, 2009 11:49pm
My 7:00 PM CDT trade was a winner again.

Thanks, Truck
  • #8
  • Jun 18, 2009 2:50am Jun 18, 2009 2:50am
Also , my USD/JPY 11:00 PM CDT trades with TP1 @ 10% and TP2 @ 15% were both winners, too. This was another +32 pips profit.
  • #9
  • Jun 18, 2009 8:43am Jun 18, 2009 8:43am
Uhmm excuse me but can you please explain rule #3?

Set a Stop Loss at 2 times your Buy or Sell order. Does that mean 20% of the current close price? Thanks.
  • #10
  • Jun 18, 2009 9:09am Jun 18, 2009 9:09am
Quoting needles
Uhmm excuse me but can you please explain rule #3?

Set a Stop Loss at 2 times your Buy or Sell order. Does that mean 20% of the current close price? Thanks.
Yes.
  • #11
  • Jun 18, 2009 9:40am Jun 18, 2009 9:40am
Wow thanks for the quick reply. Uhmm are you doing this live? For how long? thanks again.
  • #12
  • Jun 18, 2009 9:49am Jun 18, 2009 9:49am
Quoting truckjrt
Guidelines

1. Calculate previous day’s range.
2. Set a Buy and a Sell order 10% above and below current close price.
3. Set a Stop Loss at 2 times your Buy or Sell order.
4. Set a Target Profit at 10% above or below your Buy or Sell order.
5. Keeping Equity Management in mind set a new order before each major session open. Close any trade that has been open for 24 hrs.
Hi Truck. Checking out the new numbers. I'll try it out on the test account next week.
Mine?
  • #13
  • Jun 19, 2009 12:12am Jun 19, 2009 12:12am
Quoting truckjrt
Yes.
1. "set a new order before each major session open". Do you use the original close at 11pm CDT previous day for this or the close of the last session?
2. Which broker do you use to obtain data at 11 pm CDT?
3. You said 15% may well be as good as 10%. Is the 15% also set and forget? or do you move to breakeven after reaching 10%?

Thank you very much.
  • #14
  • Jun 19, 2009 7:22am Jun 19, 2009 7:22am
Profit on both the 10% and 15% USD/JPY trades set @ 10:00 PM CDT
  • #15
  • Jun 21, 2009 7:53am Jun 21, 2009 7:53am
@aelimian

1. "set a new order before each major session open". Do you use the original close at 11pm CDT previous day for this or the close of the last session?No for each new order I recalculate a new 24 hr range and use the most current close candle or current price. The object is to have the current price exactly in the middle of your current buy and sell orders to catch any breakouts long or short.
2. Which broker do you use to obtain data at 11 pm CDT?FXCM
3. You said 15% may well be as good as 10%. Is the 15% also set and forget? or do you move to breakeven after reaching 10%?Currently I have been setting 10% and 15% orders. And to date, when the 10% hits TP so does 15%.
  • #16
  • Edited 1:36pm Jun 21, 2009 12:30pm | Edited 1:36pm
Quoting truckjrt
@aelimian

1. "set a new order before each major session open". Do you use the original close at 11pm CDT previous day for this or the close of the last session?No for each new order I recalculate a new 24 hr range and use the most current close candle or current price. The object is to have the current price exactly in the middle of your current buy and sell orders to catch any breakouts long or short.
2. Which broker do you use to obtain data at 11 pm CDT?FXCM
3. You said 15% may well be as good as...

Thank you very much. I have a clearer picture now. Do you cancel pending orders at the beginning of each new major session or do you
leave each set of orders for 24 hours?
  • #17
  • Jun 21, 2009 9:48pm Jun 21, 2009 9:48pm
Truck,

How do we handle Sunday evening trades? If we are taking the previous day's range from 10:00 PM CDT on Friday until 10:00 PM CDT on Sunday, we will only have Sunday night's candles to work with, since Friday's market closed at 5:00 PM CDT.

Or do we simply avoid trading Sunday evenings?

Thanks,
Bob
  • #18
  • Jun 21, 2009 9:56pm Jun 21, 2009 9:56pm
Truck,

Are you calculating broker spread into your TP or Entries?
  • #19
  • Jun 22, 2009 6:50am Jun 22, 2009 6:50am
Quoting Bobcat2
Truck,

How do we handle Sunday evening trades? If we are taking the previous day's range from 10:00 PM CDT on Friday until 10:00 PM CDT on Sunday, we will only have Sunday night's candles to work with, since Friday's market closed at 5:00 PM CDT.

Or do we simply avoid trading Sunday evenings?

Thanks,
Bob
I have been trading Sundays, but I think it would be best to wait. I have been getting hammered on Sundays.
  • #20
  • Jun 22, 2009 6:50am Jun 22, 2009 6:50am
Quoting Bobcat2
Truck,

Are you calculating broker spread into your TP or Entries?
I haven't but I think I need to.
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