London/US Range Trading

This strategy is basically a Spin Off of mer071898's Simple London Breakout strategy.

This strategy uses the same indicator that squalo has been working on and improving everyday. It will also use the same EA as soon as squalo gets the Martingale set up and working properly.

I have made a few small modifications to squalo's indicator and to mer071898's settings. The indicator with modifications and setting is below.

The Strategy

The strategy is to trade the range set in a currency pair between the hours on 3 and 6 am GMT. We will buy any breaks to the upside of the range and sell and breaks to the downside of the range. If we have a breakout to the upside and hit the profit target we will buy any pull back to the top of the range. (Support) We will do the same if it breaks out the bottom of the range. If we have the breakdown and hit the profit target and then get the retrace back to the bottom of the range we will sell again. (Resistance)

The Profit Target is 100% of the Box size drawn around the highs and lows between the 3 and 6 am hours.

Rules

1. If we hit the target on the first trade we are done for the day with this strategy.
2. If we do not hit the target we will use the Martingale system up to 4 times. 1 lot - 2 lots - 4 lots - 8 lots.... Unfortunately if we do not win after the 4th time we wiped out 15 positive trades. Looking back I have not seen this happen other then what I showed in the bottom chart. The good thing about the bottom chart is the first trade was a winner and we would not have traded all those lots.

The chart below shows a good range day during the London/US trading session. It was good for 64 pips and there was actually another trade that could have been taken for another 31 pips and a total for the day of 95 pips. If you install the indicator and look back you will see this is a typical range day and you can get a few good trades in unless we have a break out day.

http://4.bp.blogspot.com/_C0VzKMtMF_...geexample1.png



This chart however is not so pretty and shows a worse case scenario. I went back about a year and found this day that look like the worst day for this strategy. I did not see a lot of them so I believe it is the worst case.

Using Martingale we were up to 128 lots before we made a profit. and the draw down for this day was 3528 pips. For a micro that is $352.80, mini $3,528.00. Ouch... This strategy works but you have to have the stomach or nerve to keep doubling up until you are profitable.

http://2.bp.blogspot.com/_C0VzKMtMF_...geexample2.png


I do have a nice Money Management system that will make a nice return without using martingale for those that do not like to trade it. I will post the excel spreadsheet later.

I think that covers it for now. I will post updated charts on the EURUSD daily and possibly other pairs if time allows.

Enjoy.

RJ

Results for May 12th and 13th

May 12th we hit our target on the first try for a daily total of +48.

May 13th we were stopped out of our first long and went short 2 lots and hit the target for a daily total of +29

Interesting lol!

What trade off do you personally use between safety and gain... this always intrigues me because to be successful in it the ROI is normally quite tiny, especially given the risk. But for people who can't be assed to trade and like the mechanical side of things, it can do the trick I guess

Nice day on the EUR/USD today. 96 Pips total and only had to double up a couple times.

If you traded only until the first win then you would have been done on the 3rd trade.

GBPUSD had a good day also..Will work on a chart for it later.

Here is a look at the EURUSD chart for Monday 05/10/10. 176 Pips Total for the day. Only had to double up once.

Here is a look at Tuesday 05/11/10. One trade for +90 Pips Total.

Weekly Totals

Here are the weekly totals depending on your trading style.

If you traded only until you had a profit for the day the total is 279 Pips.

If you traded all day the total is 424 Pips.

A good week either way.

Hi

thanks for sharing do you have an ea for this yet?
and how long have you backtested it?with results?

can you also post your spreadsheet to show us the money management method instead of using MG.

thanks

I was thinking that... likely he's starting with 1penny per pip or something

Should I use this ea with Breakout indicator?

The EA I plan to use is the same as what is being used in the Simple London Breakout Strategy. The link is in the 1st post. It is being used by some but I am not using it yet.

I have not back tested it other then on a piece of paper and looking over it 1000 times to find patterns. One thing I have noticed id if you get a buy signal and are stopped before it hits the target it almost always reverses and hits the target in the other direction. Best thing I can tell you is to put the indicator on a chart and look it over.

I will add the spreadsheet in another post, soon.

Thanks

Yes the two are used together but...As mentioned in a earlier post...I am not using it yet but other are on the Simple London Breakout thread.

Likely not sim...i didn't know there was penny lots...

This is a rather basic MM spread sheet. nothing pretty..just the basics.

The columns with gray boxes headers DO NOT get changed...only the colored columns need updating.

First thing you need to change is the % of account to risk per trade (G1). It is currently set at 2% but change it to what you want.


Fill in the rest of the information as you go.

You can find the earning per pip on Sheet 1. You may need to adjust the multiplier for you account size. (Standard, Min, Micro)

This spread sheet can be used on any strategy not just this one. All it really does is keep each trade at 2% (or your setting) of your account. As your account increases the number of ctr or lots will increase. They will also decrease if you hit a rough patch and take some losses.

The reason I called it 20 A Day is because when I put it together my plan was to average 20 pips per day. If this were to happen you can see the results on the 20ADAY tab.

I love the break outs. I trade the asian manually cause i need to sleep. I set and forgert. this will make a nice ea

but are these the right london start and end times for alpari UK? the whole time things makes me crazy.

I have 9 start 18 end. so trading time would be 12 not 24 correct?

About to get triggered. First trade on this system; looks good and promising to me.

I hope the prices are the correct ones; if not I'll be stopped out. Can anyone confirm please that this is the correct setting? Thanks in advance

Cheers!

Hi Tommbstone...Not sure what you have there but it doesn't look right. I will be posting a chart shortly so just adjust your times so the levels line up with what I have.

Should have gotten the buy signal and target.....

Hi

I just wanted to show everybody something I do when we get a large box like this 110 pip box. Rather then trying to trade that size box with the big stops I move the box up 1 hour. So rather then have the indicator set for 3-6 GMT I set it for 4-7 GMT.

You can see from the examples I posted below it works pretty good.

ok i have the time right it looks like now. but my fib numbers are a smig off.