EUR/JPY journal

Last week, I started to follow a thread started by bazza that seems to have some great potential. It can be found here: http://www.forexfactory.com/showthread.php?t=181945

Considering that I've modified the original rules, and the fact that the conversation hasn't really picked up in that thread, I thought I'd go ahead and start a journal of my forward-testing, and leave the original thread to either further discuss the development of the system, or, if there is no further interest in it, to die peacefully. I've dug up one of my demo accounts, and will trade this method exclusively in it for the purposes of this forward test.

Here are the rules that I'm trading by:

 

1. EUR/JPY on H1 Charts.
2. Looking at the 23:00GMT and 00:00GMT candles, enter long at the breakout of the higher of the two highs, or short at the breakout of the lower of the two lows. Let's not have a long discussion about what the 23:00 and 00:00GMT candles are - I will post charts with each day's trade, and it will be clear.
   1. If a breakout does not occur by the close of the 02:00GMT candle, there is NO TRADE for the day.

3. If the trade is triggered, set the initial stop loss at 100 pips, and calculate lot size so that this is equal to 2% of the account balance (max 2% loss if SL is hit).
4. Once the trade has entered, close half (for 0.5% profit) at +50 pips, and set a 100-pip trailing stop. In effect, this makes break-even the absolute worst that can happen once we've gotten to +50 - if the trade reverses at exactly +50 and goes back to stop out at -50, the net result is 0.
5. When the trade reaches +100 pips, tighten the trailing stop to either 50-pips, or the high/low of the previous H1 candle (low if you're in long, high if you're in short) - whichever is more favorable to your position (largest gain if SL is hit). In the worst case, again, this will result in a minimum guarantee of 1% profit should the trade immediately reverse at +100 and take out the SL which is now at +50 (or better).
   1. At this point, the trade will only close when the stop is hit. Continue to trail the stop by 50 pips. Each time a new candle forms, make the new stop the high (or low) of the previous candle if it is more favorable than 50-pips.

6. Only trade once per day. If the trade stops out, and takes out the other side of the "breakout" along the way, I will not enter a second trade.
7. Close any trade that is still open at 15:00GMT.

Yes, I have developed an EA to trade this (since a lot of the action happens when I'm not able to be in front of a PC here in the eastern US), and no, I am not planning to share it at this point.

First trade will be on Monday, and will be recorded here. I will provide detailed information about when the trade was entered and exited, and how it progressed, along with charts. I will not be posting "signals" in real-time, again, since I will most likely not be near a computer when the trades actually trigger.

Starting balance for the demo account being used is $942.71. I will be tracking total gain, with the goal being 5% increase per month.

great look forward to your post..

Danny

A good start....

Entry (long) at 134.77
Lots: 0.18
First half closed at 135.27 (+$4.82)
Second half closed at 135.65 (+$8.37)

Summary:
Breakout of the high of the 00:00GMT candle occured at 01:03GMT. Initial SL set at 133.77. At 06:54GMT, +50 was hit, and half of the trade (0.09 lots) was closed for a gain of $4.82 (roughly 0.50%). 100-pip trailing stop was set. Price continued to move up, and the +100 pip target was hit during the 10:00GMT candle. Stop was moved to the low of the 09:00GMT candle (135.418), since that was tighter than setting a 50-pip trail. For the next three candles, until the close, the stop continued to move up to the low of the previous candle, and was taken out at 12:07GMT (135.65).

Account Status
Starting Balance: $942.71
Today's P/L: +$13.19 (+1.40%)
Current Balance: $955.90 (+1.40%)

Thanks cgrey for your updates and charts..

Danny

Yes, thanks, cgrey.
I'too will be following along.

I'll enter my first demo tonight according to your rules.
See what happens.

I wonder to look for other pairs suitable for this method, or an adjusted version of it.
Food for thought.

couldn't have done too well today. to bad though because it is tanking at the moment

Another solid winner today.

Entry (short) at 135.13
Lots: 0.19
First half closed at 134.67 (+$4.40)
Second half closed at 134.05 (+$11.39)

Summary:
Breakout of the low of the 00:00GMT candle occurred at 02:06GMT. Initial stop was set at 100-pips. +50 (0.50%) was taken out at 11:50GMT, half was closed and the 100-pip trailing stop kicked in. 100-pip target was hit during the 14:00GMT candle, and since 50-pips was closer than the high of the 13:00GMT candle, the stop became a 50-pip trail. Trade was closed at the start of the 15:00GMT candle.

Account Status
Starting Balance: $942.71
Today's P/L: +$15.79 (+1.65%)
Current Balance: $971.69 (+3.07%)

That may be of interest to someone. However, since this is a "journal" thread, and not a "system" thread, the focus here will remain on the trades taken on this pair following the rules above.

You may want to discuss other pairs, or the system itself in the original thread that bazza started here: http://www.forexfactory.com/showthread.php?t=181945

Great day for the system..

Let's hope there will be more... I like to test a system for a while in demo before I move it over to a live account. I want to see at least a few months that it will return 5% before I open a live account for it.

Fortunately, it is such a simple system to follow, I can just let it run and check it daily to see the results for the day. Set-and-forget systems are my favorites

I looked at wrong candle time. you are correct. nice trade today.

While recapping today's trading, I discovered a bug in my EA that is trading this system. It has absolutely no impact on performance, but rather, is cosmetic. In the top-right corner, I display the trigger long, trigger short, and current stop loss. I noticed that once the +100 target is hit, the stop loss that I display there is always the close of the previous candle, even if the 50-pip trail is used.

I've corrected the bug, but again, it didn't impact anything (other than possibly confusing anyone looking at the charts I've posted). The actual trade logic was using the correct stop loss - it was just displaying the wrong value here.

Our first loss... We'll have them. This is definitely not a "never lose" system. In time, we hope we have significantly more winners than losers.

Entry (long) at 134.22
Lots: 0.19
Stop hit (both halves closed) at 133.21

Summary:
Breakout of the high of the 00:00GMT candle occurred at 01:32GMT. Initial stop was set at 100-pips. Soon after entering, price reversed, and eventually took out the 100-pip stop at 06:18GMT.

Account Status
Starting Balance: $942.71
Today's P/L: -$21.17 (-2.18%)
Current Balance: $950.52 (+0.83%)

Hi cgrey, I will be giving this a shot tomorrow with a small slice of profits from tonights trades.

Do you mind posting your numbers when the box finishes so I can compare them to mine.

easiest way to do this=
use ibfx demo mt4 platform they use gmt 0
Put on ej 1 hr chart in upper left hand part of screen click on icon the the right of the arrow. then scroll over the candles. you will see time at the bottom - see attached picture

when you see the candles 2300 and 000 those are the correct candles - can't be easier than that

Have a look at the charts I've posted. The blue box covers the two candles we're looking at. On the top right corner, I am displaying "Trigger Hi" and "Trigger Lo", and there are also solid horizontal lines drawn at the trigger levels (red is the short trigger, green is the long trigger).

I assume this is what you're looking for?

To further explain what is on my charts, for anyone that is looking....

The light blue box covers the two candles that we are taking the hi and lo of to watch for breakouts.

In the upper-right corner, the hi and low trigger values are displayed, along with the current stop loss.

The THICK red solid horizontal line is the initial 100-pip stop loss that is set when the trade is first opened.

The thin red and green solid horizontal lines are the hi (green) and lo (red) breakout trigger lines. When price crosses up above the green line, or down below the red line, we enter.

The two dotted green lines show the 50 and 100 pip target points.

The dotted red horizontal line is the current stop loss (and is updated in real time when the trade is open).

Hopefully, this clears things up a little for anyone following along..

sinner-

Oh, I think I see now... You're asking if I can post in this journal in "real-time" when the 00:00GMT candle closes with what the "triggers" are.

No, sorry - I am not near a computer around that time. One of the big reasons I developed the EA to trade this. Unfortunately, I have other commitments at this hour, and (usually) can't be online or trading.

If using Ibfx then try this indi with these settings your chart will look like the pic

this should help anyone with time issue problems

Two losers in a row. This is why we forward-test new systems in demo accounts. Two losers doesn't exactly make anything a failure. We'll see where this goes...

Entry (short) at 133.19
Lots: 0.19
Stop hit (both halves closed) at 134.25

Summary:
Breakout of the low of the 23:00GMT candle occurred at 01:41GMT. The trigger was literally breached by 1 FRACTIONAL pip (the actual trigger was 133.194 and the low of the candle that broke it was 133.193). Initial stop was set at 100-pips. Soon after entering, price reversed, and eventually took out the 100-pip stop at 12:30GMT.

Account Status
Starting Balance: $942.71
Today's P/L: -$21.06 (-2.22%)
Current Balance: $929.46 (-1.41%)