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0400-0700 GMT Breakout Strategy

  • #1,941
  • Dec 15, 2009 1:33am Dec 15, 2009 1:33am
Quoting grant18265
maq,

i use 4-6 am (04.01 - 0559) UK time year round and 85 ema on a 15 min chart

cheers

Grant
thanks
  • #1,942
  • Dec 15, 2009 2:29am Dec 15, 2009 2:29am
Hello All,

I have been watching the 04:00am - 07:00am breakout strategy so I thought I would ask a few questions in case I have got something wrong. So as far as I can make out, you enter two units with a target of 30 and 60 pips respectively using the other side of the range as a stoploss, correct?

Ok, so I have been doing some sums and I can’t seem to figure out how the risk/reward ratio can be profitable without a considerably good winning percentage (I don’t maybe that’s why it works?).

Anyway, in the first picture below I entered two units at 0.1 lots each, this is not using any risk just 0.2 lots overall. This reveals that with a stoploss of 45 pips or more the strategy has a risk/reward ratio of 1:1. The second picture shows the same scenario but with 44 pips risk and shows that the risk/reward ratio now marginally becomes profitable.

Attached Image


Attached Image


In the third picture however, I then risked 1% of a £10,000.00 account which would allow me to enter a max of 0.4 lots at a risk of £109.80 and if you split the 0.4 lots into two units the reward would be £109.80 assuming you actually make the 60 pip target. What I see from this is that unless your stoploss is less than 45 pips the risk/reward on this strategy is 1:1. Obviously when the stoploss is lower than 45 pips this will change marginally but it still seems to me that the actual win/loss percentage has to be quite high. Maybe it is and is why it works, but could you explain how you use your risk and how it is then profitable.

Attached Image


Please correct me if I’m wrong, I am looking for a good breakout strategy to add to my arsenal and the poll seems to suggest this is a useful strategy so would just like to clarify how the 60 pip target can be profitable.

Cheers
Foggytrader
  • #1,943
  • Dec 15, 2009 6:45am Dec 15, 2009 6:45am
Quoting grant18265
maq,

i use 4-6 am (04.01 - 0559) UK time year round and 85 ema on a 15 min chart

cheers

Grant

What's your buffer Grant???



Thanks in advance
  • #1,944
  • Dec 15, 2009 6:52am Dec 15, 2009 6:52am
Quoting Cain
What's your buffer Grant???



Thanks in advance

Hi Cain

buffers are 7 pips long and 5 pips short

cheers

Grant
  • #1,945
  • Dec 15, 2009 7:02am Dec 15, 2009 7:02am
Thank you very much!
  • #1,946
  • Dec 15, 2009 7:24am Dec 15, 2009 7:24am
I took the breakout today banked +30 and +50 pips still have 1 position running. I still take the short if the price is below the 85 ema and the slope directions on the 1 hour chart are both in line wit the breakout trade, still use the same box as you guys on the 15 minute chart 6 buffer short and 8 buffer long.

the 85 ema to me is so often in the box it stops you from too many decent trades yes that may mean i might lose a few more as well but overall i think with good MM and 3 positions per trade its worth taking have been running it now live for a month with pretty good results the past few days have been challenging though with the thin volume.
  • #1,947
  • Dec 15, 2009 7:46am Dec 15, 2009 7:46am
Quoting kiwiduvet
I took the breakout today banked +30 and +50 pips still have 1 position running....
Hey Kiwiduvet, sounds like the same setup here esp with the 85 ema. i went back over the past several months and it just seemed to make "no trade" too many times even though it seemed fine.

Can you confirm the time of your box?

Thanks
  • #1,948
  • Dec 15, 2009 8:00am Dec 15, 2009 8:00am
Good trading guys,

from my backtesting of this year, taking the trades if the ema is in the box is slightly better (about 10%).

however as i trade this system for clients then its driven by max draw downs (consecutive losers)

so consecutive losers with the ema in the box is 9, but with the ema out of the box its only 4..

its much easier to pitch to new clients and keep existing ones happy when they see their accounts with only 4 losers in a row...

BUT like you have said if you can handle the bigger drawdowns/losers then take the trades if the ema is in the box

hope i explained that ok... lol

Cheers

grant

ps. since Sept using the ema no trade rule the gain has been +59% which all of my clients are loving...... lol
  • #1,949
  • Dec 15, 2009 8:21am Dec 15, 2009 8:21am
Quoting grant18265
grant

ps. since Sept using the ema no trade rule the gain has been +59% which all of my clients are loving...... lol
Grant,

Totally understand. Don't think I could do this with OPM. But I like the 59% with lower DD as well. Perhaps I should be looking at sacrificing some gain for less DD as well.
  • #1,950
  • Dec 15, 2009 8:30am Dec 15, 2009 8:30am
i thought about the issue of the 85 ema, too. and realized the same problem of too many times not taking actual good setups..
so for me it has been quite profitable to add a 60 sma on the 15min chart and see the angle of it.. if it is quite steeply heading up/down although the 85ema goes through the box it may be a good opportunity to take the trade despite of the '85ema in the box fact'...

please excuse me for my english skills!


cheers!
  • #1,951
  • Dec 15, 2009 12:45pm Dec 15, 2009 12:45pm
I keep reading some of the posts and don't believe how this strategy have change. I have kept this strategy as is in the first post, and I have not seen a losser still. You have to know when not to trade. Monday was not a tradable day for obviouss reasons. Today was excellent and I made my 30 pips profit easy. If I would've follow it I would've made more but is 1:30 am for me and I have to work at 7:00 am... My advice is that, don't keep complicating things, keep it simple. Just as an example, I placed my lines at 4:00 gmt(22:00 cst) and 7:00 gmt(1:00 cst) high and low of course.. then I place my orders. For long 10 pips with spread and for short 7 pips. THAT's IT!!! When I don't have to work I manage the trade winning combination of ema's(which I'm not disclosing because it took a lot of work to find) but they are three of them. I disclose them one time and one of the traders took it as it was his.. so no more. JUST KEEP IT SIMPLE GUYS!
  • #1,952
  • Dec 15, 2009 1:07pm Dec 15, 2009 1:07pm
Quoting e061578
When I don't have to work I manage the trade winning combination of ema's(which I'm not disclosing because it took a lot of work to find) but they are three of them. I disclose them one time and one of the traders took it as it was his.. so no more. JUST KEEP IT SIMPLE GUYS!
Why post if you dont need help and choose not to contribute? You come here just to brag that you have no losses and that you have a method that will not disclose? Many of us come here looking for help, even the experienced traders come here looking for new systems or ideas. I follow this thread from the first post and I had many losses until great guys like Scull and others came here and contributed with their ideas that perfected the original system. I am very thankful to many guys here. I am glad this is not a forum to show off or keep things secret. I am not this forum mod and it's your decision to keep "your finding" to yourself, but please dont come here to critisize changes or brag!
Funny!
  • #1,953
  • Dec 15, 2009 1:36pm Dec 15, 2009 1:36pm
Question. Does anyone have a breakout box indi that allows me to enter a different buffer for long and short and then draw the box.

thx in advance

N
  • #1,954
  • Dec 15, 2009 2:33pm Dec 15, 2009 2:33pm
Quoting guitarman327
Why post if you dont need help and choose not to contribute? You come here just to brag that you have no losses and that you have a method that will not disclose? Many of us come here looking for help, even the experienced traders come here looking for new systems or ideas. I follow this thread from the first post and I had many losses until great guys like Scull and others came here and contributed with their ideas that perfected the original system. I am very thankful to many guys here. I am glad this is not a forum to show off or keep things...
Cheers mate, just read your post, many thanks, we should all work together in this.

Grant's system is also very good, i use that a lot and it is working great!

I must say again, just keep it very, very simply.

Draw lines at 5 and 7 or 7.15, doesn't matter all that much tbh. Set SL at 40 or to the range of boxes, but no more than 60 pips, take 30 pips profit. If the order hasn't activated by say 5ish London time, cancel orders. Be aware of high impact news announcements, but don't be scared. My results are based on trading it this way 100% robotically, with a bit of common sense thrown into the pot, i.e. NFP days are dodgy and some others, but even then you can trade and just lower your risks.

I think people are so into trying to eliminate losers (which is fair enough), but losing is part of the game, it's how you handle them that counts!

Accept it - Deal with it - Move on

Happy Pipping cheekos!!!
Trade the price action, not the cash!!!
  • #1,955
  • Dec 15, 2009 4:16pm Dec 15, 2009 4:16pm
attached is indy i use for breakout box

cheers

Grant
Attached File(s)
File Type: ex4 jason-breakout-box_v3.ex4   14 KB | 497 downloads
  • #1,956
  • Edited Dec 16, 2009 12:02am Dec 15, 2009 4:28pm | Edited Dec 16, 2009 12:02am
Quoting e061578
I keep reading some of the posts and don't believe how this strategy have change. I have kept this strategy as is in the first post, and I have not seen a losser still. You have to know when not to trade. Monday was not a tradable day for obviouss reasons. Today was excellent and I made my 30 pips profit easy. If I would've follow it I would've made more but is 1:30 am for me and I have to work at 7:00 am... My advice is that, don't keep complicating things, keep it simple. Just as an example, I placed my lines at 4:00 gmt(22:00 cst) and 7:00 gmt(1:00...


correct me if i'm wrong here but what of the following isnt simple:

gbpusd only
15 min chart
box 4-6 am UK time
long buffer 7
short buffer 5
SL 15
TP 75
BE at +25
85 ema above box go short
85 ema below box go long
85 ema in box no trade
risk 1% per trade

+59% since sept 1st

i'm confident my 8 year step son could be taught to trade this..

i'm glad your using Tasciys original method so well but he didnt invent the breakout trade and as he hasnt posted for a long while this thread would have died a long time ago with out the collective efforts of some talented traders (excluding you as you dont like sharing)

ok rant over...

many pips to all of us

Grant
  • #1,957
  • Dec 15, 2009 4:41pm Dec 15, 2009 4:41pm
Quoting grant18265
correct me if i'm wrong here but what of the following isnt simple:

box 4-6 am UK time
long buffer 7
short buffer 5
SL 15
TP 75
BE at +25
85 ema above box go short
85 ema below box go long
85 ema in box no trade
risk 1% per trade

+59% since sept 1st

i'm confident my 8 year step son could be taught to trade this..

i'm glad your using Tasciys original method so well but he didnt invent the breakout trade and as he hasnt posted for a long while this thread would have died a long time ago with out the collective efforts of some talented...
well said grant its dead simple this strategy, i know the guy who originally posted the Big Dog US open, a great guy, again the philosophy is to keep it simple and look for a few pips a day from it and move on, this need not be your only tool in your trading toolbox but with good MM it will net you gains over the course of the year, and is a very useful asset to have.

alli would add to your notes is
1)only the g/u pair
2)only the 15 mintue chart as was origianlly intended
  • #1,958
  • Dec 15, 2009 5:14pm Dec 15, 2009 5:14pm
Quoting grant18265
attached is indy i use for breakout box

cheers

Grant
Thanks Grant. Your generosity in both time and expertise is an example to all of us here on Forex Factory. I have loaded the indicator and set it up according to your simple trading rules. I set "add spread to high" TRUE and "subtract spread from low" FALSE. Those are the defaults and I believe that is correct

cheers

N
  • #1,959
  • Edited 5:22pm Dec 15, 2009 5:21pm | Edited 5:22pm
Here is a super simple break even expert to use with grants system. Drag onto your trade window and set beakeven to 25 and your done


cheers

N
Attached File(s)
File Type: mq4 BreakEvenExpert_v1-10.mq4   3 KB | 608 downloads
File Type: ex4 BreakEvenExpert_v1-10.ex4   3 KB | 431 downloads
  • #1,960
  • Dec 15, 2009 7:07pm Dec 15, 2009 7:07pm
Quoting grant18265
risk 1% per trade

+59% since sept 1st



Grant
Grant, I actually assumed that you risked 2% per trade. Risking only 1% and obtaining 59% in just over 3 months is fantastic. I am still working through the 15 pip SL as it just seems so tight to me. But I can't refute the outstanding results.
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