A Simple London Breakout V.2

I closed all my open accounts at the end of the green box to better focus on the upcoming trading session.

My total overnight trade results (FXDD):

GJ = +122 pips
EU = +18 pips
GU = -45 pips
EJ = +30 pips
UCad = +17 pips

Net profit = +142 pips

YMMV. I guess the official rule is to let these trades run either to SL or TP. If profits were negative or a small positive profit, I would likely let the trade run. But, I think last night's position already had its chance, and besides, I like to book the profits rather than let them get erased by retracements. Like...I wouldn't be happy with +142 pips every night?

Good trading!
BC

Anyone trade any other currency pairs, or have different results from my post?

I did incorporate Martingale one time each for EU and UCad.

I will compare my early closeout to that of letting all the trades run to SL or TP. The results will prove interesting. Do you think my position would have been better to wait, or better to close at the end of the green box? Hands, please! You sir, wearing a monacle in the back row of the room...

Yes... I already had qlock, and my time is/was in alignmment with yours.

Thanks,
BC

Hello mer

I like your trading method.

To ease understanding, as I am a newbie, can you tell me which broker or MT4 you use?
Using same platform, this will align with your explanation and clarification for me to understand (sorry English is not my main language)

Thanks
tpat

The indicator's default is GMT +0, so if your GMT +2 you just add 2 hours to each time and you'll be set. You'll want to leave the multipliers the same, just change your lot sizes instead.

Bobcat, you may trade however you feel comfortable. For testing purposes and to show results, I'll be letting the open trades run until targets are hit or stopped out.

It will really be 6 of one, half a dozen of the other. You will always see results where it was beneficial to close early and times when it's not.

tpat, I am using FXCBS for all my examples. They are GMT +2 so make sure to add 2 hours to all of the times in the parameters. If you have a favorite broker already, you can use them as well with properly adjusted times in the indicator's parameters. The only thing is I may show a box size of 30 pips and it may show 32 pips on a different broker due to having a different feed, but that's not a big issue.

Here is the current results for the Eur/Usd.

The pair initiated a short trade at 09:15 GMT and closed out upon the reversal for a -162 pip loss at 16:00 GMT. New long trades were placed immediately using a multiplier of 2. Trade 1 has closed out for +66 pips (+33 x 2), leaving us with a running total of -96 pips. Trades 2 & 3 are still active at this times. Again, if we get to Target 2, we will have recouped our loss plus added +112 pips to the bank. We could possibly end up with up to +262 pips if Target 3 is reached.

just to ask if someone noticed that..
at 7:00 am GMT often happens a turn around for 30-50 pips...mostly on every pair

i would like to share something easy and amazing..
here is eurusd chart..
draw three vertical lines:
22:00 GMT
23:45 GMT
07:00 GMT
from 22 to 23:45 is our box
draw a trendline from 22 to 07 : write down distance in pips..
now draw symmetric trendline (still from 22) with same distance in pips...
upward diagonal is for sell only , downward for buy only...
now continue zigzag up to 3 buylines /sell lines..
so max 3 entries.. (generally it doesnt go further for the day
entries always at half of a trendline...
ie: if safe sell => exit wld be next point of the buyline
stop loss as shown

just look at usjpy or usdchf.. todat ...we re at 3rd entry now ..didnt break yet...

why we need 23:45? ok it s just showing our opening of the day.. price one day or anoher will try to retrace to this level (our box).. so just keep an eye..(ie USDJPY yesterdays box low... now price retraced to this box...)

yes,noticed that but not everyday

Hi mistersimple

I am not so understand the explaination you are given below,can you give more clear example step by step like step1,step 2 on the chart. Thanks
draw a trendline from 22 to 07 : write down distance in pips..
now draw symmetric trendline (still from 22) with same distance in pips...
upward diagonal is for sell only , downward for buy only...
now continue zigzag up to 3 buylines /sell lines..
so max 3 entries.. (generally it doesnt go further for the day
entries always at half of a trendline...
ie: if safe sell => exit wld be next point of the buyline
stop loss as shown

here is todays usdjpy...
the box + 07:00 gmt vertical line...

1 is first trend line u draw
2 is 2nd
3rd and so on...
entries/exits/ stop loss
when u highlight ur trendline u can see the distance (in mt4)
u shld obtain equilateral triangle (not exactly but ...)

mistersimple, don't take any offense here, because I do appreciate the info, but we're starting to get off track from the original strategy already and we're only on page 3! Please, if you are wanting to post different strategies or ideas, open a different thread and post them there so not to confuse anyone on this thread, thank you.

__________________________________________________________________________________________________________________________________________

A few more examples I want to cover involve knowing what to do with open trades that continue into the next box. We had a perfect example from yesterday on the Eur/Jpy. After a successful start we had a re-entry at 15:45 GMT. Price then ranged for the remainder of the day until after the new box formed this morning. If I need to open new trades while there are still open trades running, I just open the new trades at the same multiplier that is used on the current trades that are running, in this case there was no multiplier used from yesterday, so it would be just like starting fresh. If the current running trades from yesterday continue to any target or stop, we close those trades out like we normally would. If you hit a stop like we did this morning at 09:00 GMT, we must wait for a valid re-entry or a new box before we can add the multiplier. Luckily, a re-entry presented itself at 10:30 GMT and now we can use our multiplier of 2 to recoup the losses. We ended up with a perfect run up to Target 3 and now we can start fresh on the next re-entry or when new box forms. Here is what we would have made from last night til today:

Yesterday

Trade 1= +38
Trade 2= +1
Trade 3= +1

Running Total= +40

Trade 1= open
Trade 2= open
Trade 3= open

Today

(Used the same multiplier as we used on the open
trades from yesterday)

Trade 1= +23 (09:00 GMT)
Trade 2= +1 (10:15 GMT)
Trade 3= +1 (10:15 GMT)

Running Total= +65

(Yesterday's open trades were stopped out right before Trade 1 above was closed.)

Trade 1= -62
Trade 2= -62
Trade 3= -62

Running Total= -121

(Valid re-entry emerged at 10:30 GMT using a
multiplier of 2)

Trade 1= +46 (+23 x 2)
Trade 2= +98 (+49 x 2)
Trade 3= +148 (+74 x 2)

Final Total= +171 pips

Hi Mer,

I had another successful evening trading with this system. My thanks again to you.

How did you determine the 3 profit levels? I need the math to enter into my own spreadsheet, as I use the FXDD chart, but I trade with Oanda.

Thanks,
BC

I glad your having success with this, good for you. The Targets 1 and 3 are simply Fibonacci extensions and Target 2 is just Target 1 + Target 3 divided in half. I used these extensions as Target 1 is prone to reversals and if Target 1 becomes breached, we have a good chance to reach Target 3, mainly due to the characteristics of natural Fibonacci movements.

________________________________________________________________________________________________________________________________

My next example is on the Eur/Usd from last night, so I can kill two birds with one stone and give you my results and another example like the post above. To keep you updated from yesterday, The pair initiated a short trade at 09:15 GMT and closed out upon the reversal for a -162 pip loss at 16:00 GMT. New long trades were placed immediately using a multiplier of 2. Trade 1 had closed out for +66 pips (+33 x 2), leaving us with a running total of -96 pips. Trades 2 & 3 were still active at this time.

Now we are in the same predicament as the Eur/Jpy was because we now have a new box formed and the open trades have not closed out yet. Not to worry though, we just follow what we did when we traded the Eur/Jpy. We open all new trades using the last multiplier used on the current open trades. We had two setups opened at 08:15 and 12:00 GMT that occurred before the running trades were closed, so each of those setups were able to use a multiplier of 2 as well. Trade 2 from yesterday hit Target 2 at 12:00 GMT, right after the 2nd setup was triggered. Trade 3 from yesterday was still active, but never reached Target 3 and was closed out from the reversal at 14:15 GMT. There were 2 more re-entry setups after the trades from yesterday finally closed. Since we had already recouped any previous losses, we started back from the beginning with no multiplier for these trades. Here is how we did from yesterday til now:

Yesterday

Trade 1= -54
Trade 2= -54
Trade 3= -54

Running Total= -162

Trade 1= +66 (+33 x 2)
Trade 2= open
Trade 3= open

Running Total= -96

Today

(Used the same multiplier of 2 as we used on the open
trades from yesterday)

Trade 1= +42 (+23 x 2)
Trade 2= +2 (+1 x 2)
Trade 3= +2 (+1 x 2)

Running Total= -50

Trade 1= +42 (+23 x 2)
Trade 2= +2 (+1 x 2)
Trade 3= +2 (+1 x 2)

Running Total= -4

(Yesterday's open trades (Trades 2 & 3) were stopped out after the trade setups above were opened)

Trade 2= +142 (+71 x 2)
Trade 3= +66 (+33 x 2)

Running Total= +204

(Valid re-entry emerged at 14:15 GMT using no multiplier)

Trade 1= +23
Trade 2= +1
Trade 3= +1

Running Total= +229 pips

(Valid re-entry emerged at 19:30 GMT using no multiplier)

Trade 1= +23
Trade 2= +1
Trade 3= +1

Final Total= +254 pips

*Update*

We had another re-entry at 21:15 GMT. Since it was opened and closed before the new box has formed, I will add it to today's totals.

Trade 1= +23
Trade 2= +1
Trade 3= +1

Updated Total= +279

Another thing I wanted to point out, on the previous versions of the indicator we had a red box appear which told us the box was too big to safely make a trade. In this version, we are not concerned how big the box is, but how small the box is. On the Usd/Cad we have a red box meaning that the box is at or below our minimum box size we set in our parameters. This can be traded like any other night but I would advise to cut your lot sizes in half because:

A) The pip distance between your Entry Point and Target 1 are smaller and can get eaten up by the spreads.

B) Since the box size itself is so small, your multiplier can really ramp up quickly if you hit a ranging period right in the middle of the box.

As you can see we still made a lot of pips (+209 pips to be exact), but look at the candle at 15:00 GMT. Because of the size of the box with such a large candle, we actually had two setups on the same candle. Luckily, the spike down caught Target 1 before the big jump to the upside.

Again, I'm not saying you can't trade these boxes, but try and at least lower your risk by lowering the size of your lots accordingly.

you re right sorry for that...

Not a problem, it does sound interesting though and you might get a lot of discussion on it.

Thank you mer071898 for sharing with us an easy to understand and very interesting system. I was just wondering how you find the risk of trading 5 pairs with martingale method? Isn't there a risk of them all getting stopped out and the lots piling up at the same time instead of helping to offset losses from other pairs? Or do you find that this hardly ever happen? Would it maybe be safer for the ones of us with a weaker heart to focus on one better performing pair (which in your experience would this be?), but with a slightly larger lot size? What is your experience in this?

First and foremost, I've always highly suggested that if you are going to take on any martingale type of strategy, you must first be properly funded to allow for the type of drawdowns you may experience. Yes there is always that risk out there that all the pairs may show losses at the same time, but to calculate the odds of all 5 pairs going 4-5 levels into the multiplier is astronomical I'm sure. I believe that spreading your trades across multiple pairs will accomplish 2 things:

1) Spreads the risk across more pairs which in turn allows you to sustain your equity in case you have a pair or two that is in heavy drawdown by offsetting it with the profits from the other pairs until it can recover. For example, obviously if you have loaded up on 6-7 pairs of Jpy (Usd/Jpy, Eur/Jpy, Gbp/Jpy, etc...) you are putting yourself at a higher risk due to the correlation of the pairs, remember where one goes, the others will follow. As long as you mix up the pairs and not use too many correlated pairs, you should be fine.

2) Profits, plain and simple. The more pairs that you can trade on without sacrificing your balance in the account, the faster you can build that account and use the equity to your advantage. I can safely use the sequence of the multipliers because I have enough capital to trade them safely with minimal risk to my account. Keep in mind that you can derive any multiplier sequence that your mind can come up with. It can more aggressive if you have a larger account or less aggressive on smaller accounts.


You obviously do not want to trade a $1 or $2k account by starting out with .1 lots because even if you are trading 1 pair and, for example, are already up to a multiplier of 4, you will have 2.1 lots on the table which is way too risky. But by trading .01 lots you would only be risking .21 lots total instead which is still risky, but doable. This strategy is really meant to be used with a small starting lot size (unless you have unlimited capital to spare) and to slowly build your account, not make you an overnight millionaire.

Let's say you trade $10K account with just the 5 pairs I'm looking at and use only .01 lots (or $.10 a pip) as a base lot size. Now lets say each pair averages 50 pips a day (which is very feasible with this strategy), that's 250 pips a day (50 x 5 pairs) and take that times 5 trading days in a week and we would have 1250 pips a week. Now take that times 52 weeks in a year, we get 65,000 pips. Take that times $.10 a pip and we get $6500 or 65% return on your money. If you ask any REAL traders about what percentage in a year is considered a good return, most will say 20-30%. Even if you only averaged 25 pips a day, you'd still get a 32.5 % return for the year. After 2-3 years, you should be able to safely move up your lot size with the added equity you've built up. Sorry to be so long winded, but I hope that answers your questions.

Thank you mer071898 for taking the time to answer my question and giving some good advice. Very well explained and seems like a sensible approach to a Martingale system. What I particularly like with your system is that it is so mechanical.