0400-0700 GMT Breakout Strategy | Page 133 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

FXDD GMT+2 or GMT+3 10 replies

What does GMT shift and GMT shift Sun do in this indicator? 0 replies

MBO = Monday Break Out 8 utc gmt - 7 utc gmt 22 replies

What is the best server time for H4 trading? GMT+0, GMT+1 or GMT+2? 10 replies

web charting package with GMT +2 or GMT 2 replies

Attachments: 0400-0700 GMT Breakout Strategy
Exit Attachments

0400-0700 GMT Breakout Strategy

  • #2,641
  • Feb 12, 2010 1:10am Feb 12, 2010 1:10am
Quoting Soondoock
I do not understand why all the people try to use EA?
this is the most simple strategy to trade manually. You do not have to sit near computer all day. If you want EA for backtests, you do not need it also all that was is history, I used different EA trying to trade breakouts but at the moment the best way for me is to use a single indicator and trailing stop manager. That is all. We do not want to trade manually, we say let the EA do all the job, but after two or three losing trades we say, no I would better help EA manually. It is not about EA...

could you add a screen or two to show how it looks like ? im to lazy to add this to my terminal
Never whishing, always trading.
  • #2,642
  • Feb 12, 2010 1:22am Feb 12, 2010 1:22am
Quoting Hova
could you add a screen or two to show how it looks like ? im to lazy to add this to my terminal
Here you go my lazy friend, Ohhhh, forgot to add EMA.
here is screenshot and tpl with ema. I suppose Scull's method can be also manageable by this trailing manager
Attached Image (click to enlarge)
Click to Enlarge Name: 1.gif Size: 23 KB
Attached File(s)
File Type: tpl breakout5digits.tpl   43 KB | 471 downloads
The Road appears under the steps of walking men...
  • #2,643
  • Feb 12, 2010 4:59am Feb 12, 2010 4:59am
hi guys, got a BE with Grant's and -35 pips (inc spread) with Scull's today

Although RSI 14 in the 15M was at 71.6 by the end of the 800 bar, it seems the 15M chart sometimes stays oversold for a bit more, and indeed the 815 bar's high was 2 pips from TP. So I guess waiting to hit the TP wasn't a wrong assumption (specially since it's a fairly mechanical system...)

Having said that, by 900, it looks to me like the 800 1H chart had formed a pin bar / exhaustion bar of sorts (together with MACD divergence on that last 1H rally starting at 9am yesterday 11 Feb till today 800). So maybe it could've been a good thing to close the position at BE during the 900 15M bar, as the pair seemed to be rebounding from an potential S/R area at 1.5740-1.5720.

If anybody has the time, please let me know if my newbie analysis is misguided and it would be unprofitable to trade Scull's method with these things in mind. I know many times Scully has recommended to trade his method mechanically, but I noticed other traders here use other indicators as PA and S/R...

I'm trying to keep my posts short, sorry if I go on a bit (got it from my dad).

Many pips to everyone
Seba
  • #2,644
  • Edited 11:00am Feb 12, 2010 5:56am | Edited 11:00am
Quoting sebafx
hi guys, got a BE with Grant's and -35 pips (inc spread) with Scull's today

Although RSI 14 in the 15M was at 71.6 by the end of the 800 bar, it seems the 15M chart sometimes stays oversold for a bit more, and indeed the 815 bar's high was 2 pips from TP. So I guess waiting to hit the TP wasn't a wrong assumption (specially since it's a fairly mechanical system...)

Having said that, by 900, it looks to me like the 800 1H chart had formed a pin bar / exhaustion bar of sorts (together with MACD divergence on that last 1H rally starting at 9am...
Hi Seba,

From my experience the difficulty in trying to assess at what point a trade will not realise its full potential is that there are too many possible points at which this could happen. I used to have the following on my charts:

Key moving averages (20, 50, 100 and 200)
Weekly and daily pivots
Weekly and daily support and resistance levels
Fibo levels
Other support and resistance levels
Stocastics, MACD and RSI

I would also be mindful of key numbers

The bottom line was that I was trying too hard to work out what the market was going to do. As everyone knows you will never know whether it will go up or down or whether on one day support or resistance will provide a barrier or not. With me the reason was that I was scarred of having losing trades and did not have confidence in the trading plan that I was using

So my advice to you is work out a strategy with a set of clearly defined simple rules that you are confident works. Trial it and then trade it. Remove all the indicators that you are not using so that you do not hijack yourself and stop yourself from trying to second guess the market.

Trying to second guess the market will often produce 4 key outcomes:

---You will not take some of the trades that would have been winners or you will enter at a worse price than you should

---You will close out your winning trades too early

---You will close trades before they reach their stop only to find it does not get hit and goes on to be a winner

---The bottom line is that it will be unlikely that you will make money

I do appreciate that some people have a well defined plan which uses certain key levels and that is also fine if that is part of their trading plan

I hope this is helpful
  • #2,645
  • Feb 12, 2010 7:19am Feb 12, 2010 7:19am
Hi All,

I have just finished reading this thread from beginning to end - every post (I have been meaning to do this for a while). Great work to everyone! You should be proud. This is a healthy, caring, friendly, positive thread. It was a pleasure to read.

I have not performed any back testing so I have no technical information to add for optimisations and the like, though I would like to contribute to this thread by sharing some thoughts that may... or may not ... be off use.

Everyone is using technical filters. That can work out, but an alternative is to use non technical filters. Two that I have had looked at and used over a number of years are seasonal patterns and the accumulation and distribution of "commercial traders” and "public traders". This comes from the commitment of traders (COT) reporting data.

The first one, seasonal filters is quite interesting and you may be surprised to discover that currencies are seasonal (well, for that that did not know). But the movements are not exact, but can provide a rough indication, potential loose guide posts or act as a confirmation. I have attached the seasonal pattern for G/U. What do you see from the start of the year to know? Seasonal patterns alone are not strong enough to act on or use as a filter by themselves, but added to one or two other goodies, then the results get quite interesting...

The second one, the COT data is interesting. To know more about this, the Larry Williams book "Trade Stocks & Commodities with the Insiders: Secrets of the COT Report" is quite good (I have also attended a seminar/workshop with Larry on this several years back – before the book).
There is also see a very interesting article here: http://articles.mql4.com/867.

Sorry, I do not have the time to explain this now if you are new to this, but the information is available if you look. If you want to know more, let me know I can discuss another time.

Anyway, the picture below shows the commercials are getting close to a strong accumulation point and the public at a strong distribution point.

Now, the magic happens when these (and other things ...) line up. So, as an example, come March (seasonal low) if the commercials have a strong accumulation pattern and the public a strong distribution distribution pattern (and maybe bounces of a long term support level) and appears that it could head north, consider taking all the long signals.

So, what you have done now is filtered trades using a non technical indicator (i.e. MA). Look at the attached pictures and see if it makes sense.

Now, I know this concept is not for everyone... but I wanted to be a contributor to this thread, not just a taker (in that I will try the method after spending the three nights to read it!).

Finally, this is similar to two other London break outs that I have found successful. One is for taking trades before the break-out of the box. It can also help confirming the direction of box breakout. This is something I will look at when I have time (combing) and if I think it will help, I will share.

PS - I am not typically a poster (though I have been reading FF threads for about 5 years)... but I will add something IF I think it is of definite value to this thread.

For now, thank you, good trading and good bye.

Cheers,
Darren.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: GBPUSD-SeasonalMove.jpg Size: 139 KB
Click to Enlarge Name: COT.jpg Size: 207 KB
  • #2,646
  • Feb 12, 2010 7:23am Feb 12, 2010 7:23am
Oops - forgot the seasonal chart. Here you go.
Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSD-SeasonalChart.jpg Size: 142 KB
  • #2,647
  • Feb 13, 2010 4:11am Feb 13, 2010 4:11am
Friends,

I would like to add another piece of food for thought to your thread. Again, as per my previous post, it may... or may not be helpful, though may provide someone with some new ideas.

It appears that Jan-2010 was a tough month for your BO system. I know there are some differences in opinion in this thread on whether to filter trades with the trend or take every trade, though personally I like to stack the odds in my favour. For me, I find trading with the trend does helps.

So, if you want to take trades with the trend, then the 85 EMA or slopes or other technical indicators u r using seems OK. However, I personally like to use RPA (raw price action). There are different ways to do this, but I would like to show you one way.

Please note that this is not my idea so I cannot take any credit. It was shared with me by Jay Norris (Author of the book "Mastering the Currency Market"). Also note that this is only part of the way Jay determines the trend so using this in isolation is not perfect, but it’s a decent starting point on using RPA to get your trades in sync with the trend.

Using RPA, it is good to follow the larger time frame. For 15m charts, the long term trend can be followed by looking at either the 60m or 4hr trend, but for a smoother ride and less whip saws, 4hr is good.

The method is pretty easy.

In a down trend, find the lowest CLOSE. Mark the high of this candle. A close above the high of this candle is a trend change. If you get a lower CLOSE, then mark the high of that candle. A close above the high of that candle is a trend change. Continue that process until you get a trend change.

In an uptrend, find the highest CLOSE. Mark the low of this candle. A close below the low of this candle is a trend change. If you get a higher CLOSE, then mark the low of that candle. A close above the low of that candle is a trend change. Continue that process until you get a trend change.

I have done this for Jan-2010. Picture below for your study. It is really quite easy once you get it.

It shows the trend using this simple technique. Now, if you want, you can take trades on your 15m chart (I assume most people in this thread are using 15m charts) in the direction of the trend as shown by the 4 hr chart.

At this time, I do not know of this will help or not as I have done no back testing with your BO system, but it is worth a look.

Now.... if someone with more time on their hands than what I have could take this chart below (you can clearly see when the trend is up [take long breaks] or down take short breaks]) and back test taking trades using this RPA filter for Jan-2010 (as opposed the 85 EMA and slopes) and get the results back to this thread, that would be great.

If it turns Jan-2010 from a negative month into a positive month, it means this is worth looking at further and I might be able to add further value to the system. We can look at getting a little deeper with this technique with some things like inside bars (ignore), gaps (fill), etc (but for now, what I described is enough).

I would love to back test, but my time is limited at the moment. I hope you understand.

If nothing else, maybe someone has learnt some new ideas from this and my last post.

PS. If this does not turn Jan-2010 into a profitable month (or more profitable) I am going to be very surprised.

Regards,
Darren.
Attached Image (click to enlarge)
Click to Enlarge Name: Jan-2010 (trading with the longer term trend).jpg Size: 83 KB
  • #2,648
  • Feb 13, 2010 5:23am Feb 13, 2010 5:23am
Quoting dazzdude
Friends,

I would like to add another piece of food for thought to your thread. Again, as per my previous post, it may... or may not be helpful, though may provide someone with some new ideas.

[font=Calibri][size=3]It appears that Jan-2010 was a tough month for your BO system. I know there are some differences in opinion in this thread on whether to filter trades with the trend or take every trade, though personally I like to stack the odds in my favour. For me, I find trading...
Hi Darren,

Here are the results using the 23:00pm to 03:00am GMT as the last bar to use for determining the trend. I have used my rules from post # 2066

4/1-----------B/E-------------------------B/E
5/1-----------NO-------------------------WIN
6/1-------------F--------------------------F
7/1-----------NO--------------------------F
8/1------------F---------------------------F

11/1-----------B/E-------------------------B/E
12/1-------------F-------------------------F
13/1-----------B/E-------------------------B/E
14/1-------------F-------------------------F
15/1-----------NO--------------------------F

18/1-----------B/E-------------------------B/E
19/1-----------B/E-------------------------B/E
20/1-----------B/E-------------------------B/E
21/1-----------WIN------------------------WIN
22/1-----------B/E-------------------------F

25/1-----------NO-------------------------NO
26/1-----------NO-------------------------B/E
27/1-----------NO-------------------------NO
28/1-----------B/E------------------------B/E
29/1-----------NO-------------------------NO

My system 4 x fail 1 x win ( total - 0.6 R )
4hr system 7 x fail 2 x win ( total - 0.2 R )
  • #2,649
  • Feb 13, 2010 6:30am Feb 13, 2010 6:30am
Hi Indy,

Your system is good, stick with that. I was worth a try. Thank you for taking the time to back test this. I appreciate your effort.

I have not been trading my own london breakout this year (based on a simliar concept). I will go back and look at that for Jan-2010 and compare to your results (I am just interested to see how it stacks up against yours and the others - maybe I will switch!).

How do you get calculate your return? (e.g. 0.6 R) so I can compare?

Regards,
Darren.
  • #2,650
  • Feb 13, 2010 7:30am Feb 13, 2010 7:30am
Indy,

Maybe I misunderstood your return values...

U r using?

Stop 20 pips
Target 77 pips

If so, that makes before spread:

Indy (-80, +77 = total of -3)
4hr (-140, +154 = total of +14)

And after spread of 2 pips per trade:

Indy -3, -10 = -13
4hr +14, -18 = -4

Correct?

If correct, what happens when you also filter the trades on the 15m chart using the same RPA technique (if you have the time and kept the results). That is, both 4 hr and 15m must be trending up to take the trade above the box and both 4 hr and 15m must be trending dn to take the trade below the box using the same rules (as this is typically what you would do with this - that is both short term and long term are in agreement before taking a trade).

If you do not have the time or desire, that's perfectly OK :-)

Regards,
Darren.
  • #2,651
  • Edited 7:46am Feb 13, 2010 7:33am | Edited 7:46am
Quoting dazzdude
Hi Indy,

Your system is good, stick with that. I was worth a try. Thank you for taking the time to back test this. I appreciate your effort.

I have not been trading my own london breakout this year (based on a simliar concept). I will go back and look at that for Jan-2010 and compare to your results (I am just interested to see how it stacks up against yours and the others - maybe I will switch!).

How do you get calculate your return? (e.g. 0.6 R) so I can compare?

Regards,
Darren.
I don't work in pips only return on initial risk. Therefore each winning trade results in a return of 3.4 x intital risk (R) (using my 2 pip spread) So 1 x win = 3.4 R - 4 x losers (1 R each) = - 0.6 R. Here are the results for my system for the prior months:

October---------- + 10.6R
November-------- + 22.8R
December-------- + 6.8R (trading 1/12 to 18/12)
  • #2,652
  • Feb 13, 2010 8:11am Feb 13, 2010 8:11am
Quoting dazzdude
Indy,

Maybe I misunderstood your return values...

U r using?

Stop 20 pips
Target 77 pips

If so, that makes before spread:

Indy (-80, +77 = total of -3)
4hr (-140, +154 = total of +14)

And after spread of 2 pips per trade:

Indy -3, -10 = -13
4hr +14, -18 = -4

Correct?

If correct, what happens when you also filter the trades on the 15m chart using the same RPA technique (if you have the time and kept the results). That is, both 4 hr and 15m must be trending up to take the trade above the box and both 4 hr and 15m must be trending...
Hi Darren,

Unfortunately this does not help. Using the 05.45am to 06.00am GMT 15 min bar as an additional filter removes 4 of the failing trades but also takes out the 2 winners
  • #2,653
  • Feb 13, 2010 8:54am Feb 13, 2010 8:54am
I wouldn't be as concerned about January being a losing month, that happens sometimes. The fact that the system only seems to have worked since rates went to zero is a bigger concern for me.

Quoting dazzdude
Friends,

I would like to add another piece of food for thought to your thread. Again, as per my previous post, it may... or may not be helpful, though may provide someone with some new ideas.

[font=Calibri][size=3]It appears that Jan-2010 was a tough month for your BO system. I know there are some differences in opinion in this thread on whether to filter trades with the trend or take every trade, though personally I like to stack the odds in my favour. For me, I find trading...
  • #2,654
  • Feb 13, 2010 8:55am Feb 13, 2010 8:55am
which broker are you using with a 2 pip spread? I find very few have a spread that low in gbpusd and most that do seem to be scams.

Quoting Indyfx
I don't work in pips only return on initial risk. Therefore each winning trade results in a return of 3.4 x intital risk (R) (using my 2 pip spread) So 1 x win = 3.4 R - 4 x losers (1 R each) = - 0.6 R. Here are the results for my system for the prior months:

October---------- + 10.6R
November-------- + 22.8R
December-------- + 6.8R (trading 1/12 to 18/12)
  • #2,655
  • Feb 13, 2010 9:40am Feb 13, 2010 9:40am
Quoting robl45
which broker are you using with a 2 pip spread? I find very few have a spread that low in gbpusd and most that do seem to be scams.
Rob,

I have sent you a private mail
  • #2,656
  • Edited 1:30pm Feb 13, 2010 1:27pm | Edited 1:30pm
Quoting darmamade
Hi, thanks for posting this good trading plan here for us to learn. Perhaps having a better/tighter SL would increase the profitability of this trading plan. Since a good breakout usually is the one that goes well in the first place, my idea is to place SL above/below the high/low of the bar that breaks the band.

rgrds,
I

That means u will be making ur entries after 730 GMT, at the least. Thought the author maintains that his horizon is 400 to 700 GMT strictly.

My own suggestion to the System is to keep both the buy and sell orders open until TP1 is hit. If the contrary happens, the other side is also triggered and that's hedging. To me, this is easier to handle than an outright loss.
  • #2,657
  • Feb 13, 2010 6:08pm Feb 13, 2010 6:08pm
Hi,

I have been following this thread for some time, and I am happy to see the friendly atmosphere, and of course, the great systems. I have been trading similar systems for a while, with success, and I also used to trade the original system in this thread a couple of months back.

I would like to say thanks to Grant and Scullmeister, for tweaking this system. I think that BO-system like this are great for their simplicity, but I think that they need some filters and extra rules, and that is exactly what you guys have been contributing with. Thanks!

From Monday I will start a test with Grant's system. I like the EMA filter and thet great RR, and again, the simplicity.


Regards

Archie
  • #2,658
  • Feb 13, 2010 7:52pm Feb 13, 2010 7:52pm
Indy,

Thanks for backtesting. It was worth a look. Just using the 4hr trend worked OK (maginally better for Jan than yours, but not by much and it had to take more takes (more effort) to do this. Stick with what you have, it seems good.

Also, I like the way you measure the performance of you system. It's simple and effective. Nice one.

Regards,
Darren.
  • #2,659
  • Feb 14, 2010 7:38am Feb 14, 2010 7:38am
Hi Indy,

Once again, thanks for the back testing you did for me. Today, I applied the same analysis as a filter to my own London breakout system. I tried it two different ways and I was surprised the find that it did not help mine either. Oh well... that happens.

I ran a quick manual back test of my London breakout system for Jan-2010 (by eye so there could be errors). I did not take into account news, spread, slippage, etc, so it's only a very rough back test. I would consider the system very much still in a development / testing phase and have not yet decided upon the best settings (I need to invest some time into it).

Here are the results using a 80 pip target and 25 pip stop loss. Hold until it is either a win or loss and no filtering. Nice and simple.

-25
+80
+80
-25
+80
+80
+80
-25
-25
+80
-25
-25
-25
-25
+80
-25
+80
+80
-25
+80
-25
-25
+500 (total)

(It was only a quick test, there could be some errors)

As you showed the initiative and keenness to back test my previous idea, I would be willing to share the system with you (or grant, scull, greg, etc) if you would like to get your teeth into it and find some good settings (picking almost any settings seems to work. I'd be interested to see how good this system could get, but have been spending my time on other projects. Some manual back testing last year showed it should be capable of averaging 400+ pips / month and all months tested over several years all seemed to work).

If you would be interested, let me know. I have been wanting to do this for months, but my time is limited. If it turns into something good I will share it with the folks in this thread. I am happy to share anything I have (as pretty much everything I currently know and have has been shared with me through some form or another. ).

Note: Although similar to the method in this thread, it is also different and I am also cognisant not to derail this thread with a new system.

Ps - not sure how the PM thing works, but I am sure I can work it out.

Regards,
Darren,
  • #2,660
  • Feb 14, 2010 8:17am Feb 14, 2010 8:17am
dazzdude what time frame have you used on this backtest?

Quoting dazzdude
Hi Indy,

Once again, thanks for the back testing you did for me. Today, I applied the same analysis as a filter to my own London breakout system. I tried it two different ways and I was surprised the find that it did not help mine either. Oh well... that happens.

[color=black][font=Verdana]I ran a quick manual back test of my London breakout system for Jan-2010 (by eye so there could be errors). I did not take into account news, spread, slippage, etc,...
"The person who knows that enough is enough, will always have enough". .
5 traders viewing now