7am-9am Big Dog USD Breakout Strategy

hello all....i just wanted to see if anyone was making consistent profits with this strategy? I tried it several months back but blew 2 different demo accounts with it. I didn't risk too much money either. I had a $5000 demo account and only trading .1 lots or $1.00 per pip. Is anyone making profit with it? I stopped using it several months back after I found a mentor to teach me to trade but when I ran across the forum again I wanted to just see. I am now trading with purely price action and have finally had success with it. But only because I have a professional taking me by the hand.

may i know what kind of system your are using?

What is the best currencies to trade for the Big Dog USD Breakout from 7am to 9am? Please advise boss...

I traded the eur/usd pair only. Others traded the pound /dollar. I did alright when I was using this system, but I did not use it the way it is stated in the rules. I traded 5am to 7am pacific time, which was 8-10 NY time.

Can't answer your question as to which pairs are best, I only used one cross.

Scott

I've been trading this system for two years using the original rules and one currency pair but stopped a few months ago. This is a great system. Showing trading statements is not feasible since no two people trade exactly a like and due to broker feeds being not the same, one trader will exit under signals from one broker whereas another trader will have signals to stay in using the signals from a different broker. Some brokers differ 2-3 pips at times.

I think if you use this strategy as a "set and forget" system, you will lose money. However, if you can utilize price action in relation to the box, and be able to babysit your trades...you can do fine. You just have to be able to get out when you have the feeling that that is what you should do. I traded .1 lot and used price action and did my best to only trade in the direction of the trend and did quite well on demo. But if you just place your trades, and go to sleep...look out, because there are all sorts of reversals that can take you out. I always closed with anywhere from 5 to 35 pips.

I am trying this strategy on a completely different time frame, trading .1 lot, starting with a $3,000 ...started out bad, but now the market is trending a little and things have turned around. I think the key to any of these "box" breakout systems is to be able to monitor the trades, move SL to BE as soon as you can, and take profit when you feel comfortable.

right now, I have three trades open on the EUR/USD
9/13/2010 +691 pips at .1 lots
9/15/2010 +463 pips at .1
9/21/2010 +389 pips at .1

I am letting them ride and all are set to break even. So we will see what happens if the market reverses, I guess the least that can happen is that I break even.

I say use the system, but don't be afraid to tweak it around to fit your needs and the times you are available to trade. No matter where you draw the box, price will break out of it...and to me, it is all about predicting the market direction, monitoring the trade once you are in, and not placing too large of an order.

Here is a picture of my chart which should show the open orders at the bottom for those doubters out there

Scott

SLC, you have just provided all anyone needs to succeed with the Big Dog, or ANY STRADDLE.

~ Price WILL escape the box but may require your patience.

~ Thoughtful trade and money management once in the trade will equal success.

The Big Dog works as long as you stay with it once in the trade, perhaps adjust stops as profitability increases, or exit as price action dictates you should. Don't turn profits into losses.

Good trading to all this coming week.

Forest

Hey Scott! Can you tell us what rules do you use? From what you said I understood that you use a box from 8 to 10 and you trade in the direction of the trend. Do you set up the box and the you wait for a breakout even if it happens the next day? How do you trade in a ranging market?

hey everyone,

So I've been looking for a breakout strategy for the longest time, I recently came across this strategy and it looked rather interesting. I did a little back testing on...

EURUSD, EURJPY, USDCHF, GBPJPY, GBPCHF, GBPUSD and NZDUSD.

Note: The backtesting I did was through simple observation, I have not actually demo tested this just yet.

Here is what I came up with...

First some terms...

win = the amount of pips gained
loss = the amount of pips lost
breakeven = how many times i would broke even
win % = the percentage of trades that I would win
RR = risk to reward, for example a 1:2 ratio means for every 1 pip you risk, you should statistically gain 2 pips.

Note: I do not trade if the box range is 60+ pips. I like using the H1 timeframe rather then the M15 timeframe. The moving average is a 200 EMA. If my stop loss is hit, which is typically on the other side of the box, I enter another trade in order to make up my loss with a stop loss on the other size of the box. if the trade hasn't yet hit any profit levels before the next day, I will either close the trade for whatever amount of profit it has, or move stop loss to breakeven, this is why I broke even on some trades. I used a period of about 20 days to provide the results.

Now the results...

USDCHF

win: +35, +60, +51, +36, +41, +91, +101, +119, +57, +20 = 611 pips

loss: -37, -30, -50, -27 = -114 pips

breakeven: II

win % = 71%

RR: 1:5

GBPUSD

win: +92, +29, +45, +57, +104 = 327 pips

loss: -57, -52, -44, -48 = -201 pips

breakeven:

win % = 55%

RR: 1:1.6

EURUSD

win: +54, +80, +36, +57, +92, +44, +101, +54, +49, +165 = 732 pips

loss: -45, -19, -39 = -103 pips

breakeven: I

win % = 76%

RR: 1:7

USCAD

win: +79, +75, +55, +47, +40, +31, +38, +70, +45 = +480 pips

loss: -44, -51, -26, -35, -20, -31, -44, -39 = -290

breakeven: I

win % = 52%

RR: 1:1.6

EURJPY

win: +106, +116, ,+105, +51, +51, +35, +241, +51, +81, +43, +60 = +940 pips

loss: -59, -51, -54, -31 = -195 pips

breakeven:

win % = 73%

RR:1:4.8

NZDUSD

win: +50, +93, +70, +73, +30, +30, +28, +16, +70, +38, +74, +65, +48, +30 = +715 pips

loss: -28, -22, -27, -27, -31, -41, -28, -38, -41, -35, -26, -25 = -369 pips

breakeven:

win % = 53%

RR: 1:1.93

GBPJPY

win: +135, +185, +35, +65, +149, +237, +110, +59, +52, +43, +88 = +1158

loss: -75, -36, -66, -63, -44 = -284

breakeven: IIII

win %: 68%

RR: 1:4

GBPCHF

win: +128, +64, +43, +198, +198, +101, +95, +99 = +926 pips

loss: -71 = -71 pips

breakeven: I

win %: 88%

RR: 1:12

Conclusion

Based on my observation I believe demo trading a bit further on EURJPY, EURUSD, USDCHF, GBPJPY, GBPCHF and possibly, NZDUSD could become quite profitable.

I would like some further thoughts on this.

Eurisko --

Of course, many of us pursue just one or maybe two pairs, but your evidence is intriguing.

I'm sure you would agree that 20 days is not a sufficient trial but is surely worthy of more examination.

It's that re-entering once stopped out on the other side of the box that scares me. Obviously, over the last month doing so frequently worked for you.

You may have also discovered some pairs not really fit for early NY breakout trading. That is very valuable in itself, and the G.U performance is interesting since this is not an unusual pair to trade on NY opening.

Thanks for your work to date.

Forest-Sea,

I absolutely agree with you, this information is interesting but I need to do some further evaluation to determine which pair is best for such a strategy. Recently, I've been feeling rather uneasy about the results, I will be going back and looking at the charts some more.

I'm thinking about pushing the test back 60 or maybe even 90 days on each individual pair and then reporting the results the same way I recently did.

I also don't like entering another trade once my stop loss has been hit, however, the trick to this problem is having a statistically good ratio. If for example price action is ranging then you will get murdered, but if you have a ratio of 1:3 (risk:reward), then you can see how this would help you.

Do you have any suggestions regarding this?

Eurisko --

What are you using as your TP targets? How are they set? Your positive results are quite varied so I gather you are not taking a set number of pips.

This is another way of saying how do you determine your Risk:Reward ratio, in advance, if not taken on a set number of pips to TP?

Looking at established points of support/resis.?

Just want to be sure I understand how you are handling things. Certainly seems to be working!

Forest

I'm in the process of backtesting all 8 pairs for a period of 90 days. Once I finish with my observations, I will post everything. I will fully explain my approach, what I look for, etc...

Great!

anyone using FXCM MT4? I'm having a hard time actually matching up the correct time :/ their live support is not on either, and I've tried the clock indy but I just want to make sure that 12:00-14:00 corresponds to 7-9am

Maverick,

i just talked with FXCM, they said its -1 from london. So I'm guessing its GMT -1?

Maverick, I had a hard time figuring out all of this +1, -1 stuff. The easiest way for me was to just go online and see what time it was in New York as it related to my time zone. Then what ever it is, just set your indicator to draw the box to the corresponding time on MT4. On my chart, it is 13:00-15:00, which corresponds to the TF I use (8-10 NYT)

Hope this helps.

Scott

1. I trade only the eur/usd cross, I don't look at any other pairs (although I am tempted form time to time)
2. I do not place both buy and sell orders at the top and bottom of the box
3. I always utilize a SL, but not a set stop loss

So my approach is
*check the trend starting at the wk, daily, 4hr, and 1hr, once determined I then switch to the 15m, if I can not determine the trend with reasonable confidence, I will shut down or try to determine if there is a reversal starting. If I still am unsure, I will not trade.
* once trend is determined, i will place a pending order in the direction of the trend. or if it is a strong trend, i will imediatly place an order
* I have found there are lots of retracements, so that is why I will jump right in if the trend is strong, regardless of price action as it related to the box.
* so I have done all of this between 9:45 -10:00 (NYT) or 6:45-7:00am Pacific time (my time zone), once the order is placed either live or pending, I shut down the laptop and go to work.
*about an hour later, I log back on to check the oders. One of three things will have happened. I will be stopped out, or my pending order will have been fulfilled, or price will be ranging and no order has been triggered.
* at this time i need to check the trend again, and determine if i want to stay in the market. there are all sorts of reversals that can take you out, and these normally happen during the later half of the NY session. So I always keep that in mind.
* my main goal is to walk away with some pips or break even if i am still in the market. I will move SL to BE, or will cash out. I have always shot for 75 to 100 pips per week, and honestly it wasn't that difficult.

As trading goes, money managemnet is key. I have never paid much attention to risk:reward as most of my ordes get filled one way or the other. The way I see it, any pip is a good pip...so i try to not be greedy. When I demo'd this strategy, I managed do do about +50% per month which in my book is really well.

Just watch out for the greed factor, don't revenge trade, alway use a stop loss, don't let the market take back what you have earned.

fake short on EU today? or just a spike back??