Breakout Strategy

Hey everyone I have been surfing around in these forums for some time now and seen some great strategies and some not so great. I recently decided to become a member and put up my strategy that has helped me a lot.

The best thing about my two strategies is that they work for people with jobs or going to school like me. The first strategy can be done in about 30 min once a week for a nice amount of pips. The other takes about 30 minutes max I have brought it down to about 15min in the morning Monday through Thursday if you get good at it and how many currencies you use. As you noticed I never trade Fridays, Ill look at the charts but normally the movement is too slow or unpredictable to trade safely.

4H Strategy

The first strategy is by far the simplest one and its the 4H breakout. It has been discussed many times on these forums and while they all have there little variations they are essentially the same.

This strategy is meant to be done once a week and forget about it. Just set it up Sunday night and set your orders.



So when looking at the above screen shot of my MT4 you can see the strategy is very simple. It starts every Sunday night at 00:00 or the beginning of the week. If you are using Metatrader 4 you can just click Ctrl - Y and it will set up lines for you at the beginning of every week.

You then draw lines or a box like in ym screen shot the size of the first candle of the week. This will make the low of that candle your sign to sell and the high of that candle your signal to buy.

Very important I recommend adding a 5 to 10 pip buffer in the high and low so that you can prevent getting hit by a bad signal, since I have seen it happen before when the price just goes 1 or 2 pips below the low or high and a trade is started just to get hit with a stoploss when it goes the other way. Normally after 5 to 10 pips the price is going to keep moving in that direction.

My take profit is normally set at 75 pips and then at 150 pips for my second TP. This method has worked great and very few times has it not worked. My stoploss has usually been 50 pips.

so..

S/L 100 pips
T/P1 75 pips
T/P2 150 pips

I have been experimenting with trailling stops and using different indicators to help me decide when better to exit trades or keep going but that does take more interaction and leans away from the set it and forget it method I was going for.

I will soon post some indicators that I have been experimenting with to see if they work on the 4H charts. And I will also post my results with trailling stops.

This strategy works or should work on all JPY pairs but I ahve only tried it one four of them : USD/JPY, GBP/JPY, EUR/JPY, CHF/JPY

15Min Strategy

This is my second strategy and it does involve a little more interaction than my previous one. It is meant to take advantage of the breakout that happens from 7am to 9am during the New York breakout.

This strategy has been called the Big Dog strategy around this forum, and if you have read those threads you will get what this strategy is about. From 7am to 9am EST the New York Stock Exchange opens and markets go crazy. You will see a lot of price movement during and after this time period and you will take advantage of it.

Please look at the screen shot to see how it is set up:



As you can see this strategy is also very simple to set up:

1)two vertical lines one at 1100 GMT & 1300 GMT
2)two horizontal lines one at the lowest candle & one at the highest candle

This is all you need to do, then if the price breaks the low line then you sell and if the price breaks the high line then you buy.

That is the essence of this strategy, I have heard of people using Fib lines, etc. But I normally just shoot for 50 pips at my first T/P and 100 pips at my second T/P.

So...

S/L 50 pips
T/P1 50pips
T/P2 100 pips

I normally just try and get 50 pips unless I see some really good price movement I might push the T/P higher, but normally I am not at the screen to see how it is moving so I just say 50 pips is a nice amount.

When I was first using this strategy I was just cutting it at 20 pips but thats only if you want to be really safe. I am also experimenting with trailling stops and indicators for this strategy and will post them once I get some more news on them.

This strategy has been pretty good to me. It should work on most USD pairs but I ahve only used it on four of them: EUR/USD, USD/CHF, USD/CAD, GBP/USD

Here is another screen shot of a week or two ago so you can see how simple and effective this strategy is:



The circles are where you would enter the trade. I will post some more screen shots as soon as I can get some free time.

Hope this helps everyone out, they are by far my two favorite strategies and I hope some of you out there enjoy them as well.

"Should work" is an interesting phrase to use when "presenting" your methods here...

I will Disagree with you in the meantime tho about a 50 pip SL being profitable on GBP/JPY... and why would you consistently risk 50 for a Tp of only 75 on that pair? You probably won't last long at that rate.

...easy, Tiger.

Gus posted on Ace's thread that he's a college student, so presumably just starting out. I'd say it's a great first "own thread" post, brimming with enthusiasm. And as for "hawking your methods here" - give the guy a break, it makes you sound old and bitter.

The market teaches us all its lessons when the time comes...

Hey well I have traded this for more than a week I just couldn't get better screen shots. Also I said should because I haven't tried it extensively on all the pairs really only on 2 but have recently made it 4 on each strategy.

The T/p and S/L are just my idea and if you are trading forex you should have your own knowledge about what you are doing and tweak everything a little to benefit you more. I do think everyone that trades these methods will do it their own way and change settings to their standards. I have been able to lately watch a lot of my trades better due to the summer so I can manually exit and enter trades thus why I have weird S/L and T/P

I see what you're getting at, AK4X, but no need to jump all over the guy. Whomever intends to use the ideas presented here should always backtest them him or herself. Everything works at some point or another so using the term "should" is accurate for the time being. The point is do your own homework and decide if it's a viable strategy or not.

And I do agree that 50 pip stop loss on GBPJPY is not enough and taking profit at 75 or even 175 is short sighted. You would be robbing yourself of huge numbers. In fact, I've done 2.5 yrs of backtesting for the H4 weekly breakout and the avg stop loss is closer to 100 pips if not slightly more.

Either way, let the man have is say and then strangle him if he gets out of line He has not approached that daunting border quite yet.

Point taken and post edited... Having suspended over 2 dozen Spammers in the last couple weeks some of whom lurked in a very subtle way for awhile before Pouncing, one maybe does get jaded...

My Geppy comment is on the heels of a +430 pip short off the recent highs a'rd 59.50 and even that left +100 pips on the table when it dumped yesterday...

Anyway... Apologies and I wish all the best for you Gus... If you have some seasoned guys who are supporting your efforts here, then you should do very well, and I sincerely hope you do.

Hey yeah I mean I understand and trust me I know that I am no expert by far in forex and that's really why I got in this forum. I know there's a ton of seasoned vets here and that this is where I will learn even more. I do know some of my stop loss and take profit are a bit off and maybe weird but I am still experimenting. The reason for this thread is mainly to put the two strategies I like the most in one place and get as much feedback as possible.

I actually wanted to post this indicator I found over at babypips.com I have been using it for a very long time and it was coded by a great forex trader. It is a combination of Moving averages which works great to tell you especially for the 15min breakout strategy because it helps with entry and exit. I also add an exponential moving average of 89 to let me know if the mrkt is still moving in that direction longterm.



I normally jsut use it to see if the trade will keep going or not and it really helps.

Thanks for sharing. I've had a look at some charts and with the 15min strategy you might go down to the 5min charts and wait for a meaningful close above/below the high or low as the Entry - if you can afford some chart time...

OOPS.

No.

The NYSE opens at 9:30 AM Eastern time.

There are "pre-market" and "after market" trading sessions, but those were basically marketing gimmicks to pull fresh meat... errrm, I mean retail traders into a very thinly traded market.

hi

how has your trading results gone so far using these strategies ? percentage of success ?

i doint understand the first strategy. should the candles be 4 hour candles. and asfter the first 4 hour candle on sunday midnight, you buy or sell according to if the seconf 4 hour candle goes above or below the first 4 hour candle ?

and why only do this on a sunday ? why not other days ?


regards

Is this still working? Many thanks for advice