A Simple London Breakout V.2

TF is 15mins and I believe all the trades you saw by Mer are manual ones using the indicators

Like I said in a previous post, and as confirmed by Mer, the LBO is making profits by the random hitting of TP2 and TP3 at occasions depicting higher martingale factor.

That is the very reason you must have the proper set-up with respect to your initial balance in order to bear the punctual DD due to loosing increasing martingaled positions.

I believe today was one of the best example since a long time. I've been in a generally loosing streak for the last 5 days ... Mart factor up to level 6 .... but today was the random big winner as TP1-2-3 were hit on multiple PAIRS, bringing my account in the best position ever.

Accordingly, and based on the proposed optimization I mentioned based on backtested performance, win/loose series, and ADR, I`m under way of reporting a complete stat analysis for at least one PAIR and will let you know the end results. I performed this analysis using the OSS R stat software, for which I'm building a bridge/report analyzer interface. I will further report this to the Co-integration thread started by 7bits at FF to add to the 7bit MT4R interface. http://www.forexfactory.com/showthre...=262827&page=2

If some good statisticians are around the corner, I wouldn`t mind some help, specifically if someone would like to support a post-MT4 report optimization to optimize a strategy based on the Sharpe Ratio, or even better through a Modigliani Risk-Performance adjusted least square optimization. Do not hesitate to PM.

regards,
X.

PS: where is the concept of reversal during volatile conditions ... the last 5 days would have definitely mitigate the exposure, simply trading inside the box.

Hi Mer,

Yesterday i've used the strategy on eurjpy/ eurusd and gbpusd and made money with TP target level 1 only set. I entered the buy stop and sell stop 1 hr later after the line was drawn, therefore i did not trade usdcad as it was flip flopping up and down of the buy entry.

I have few questions i think:-

1) lets say after the window of 7-10 GMT the buy and sell entry lines are drawn with TP target level 1 to 3 and same goes to sell TP target. Do i need to do buy stop and sell stop 3 times with each target with a different level and SL with being the sell entry for all three?

2) once the 7-10hr window box drawned up, and if the 1st candle is at the line of either sell or buy entry, what would be our action, do we wait?

3) instead of 7-10hr windows is there any other window that can be used for example japan market hours and us market hours?

4) Do we plant the buy stop and sell stop immediately after the 10th hour candle and start of the 11th hour candel or observer the best time for entry?

5) Is there any other pairs that can be used to trade other than usdcad, gbpusd, eurusd, eurjpy and gbpjpy

6) I still don't quite get the multiplier strategy if lets say the first target SL and the second is x 2 which will recover the first loss... how does this works.

I'm trying my best to vet through the whole post and replies but unlucky to get the above information.

Hope you could help me on this...

Best Wishes!
Bala

http://www.forexfactory.com/attachme...1&d=1294991032

Hi Mer,

I find that the next day chart is not reloading even if i left the MT4 running, i've tried to log off and login still the same. When i load from indicator again then it worked. Is there anything i need to do?

Regards.... with compliment.

when i enabled the ea today around 3pm est price was above the entry level but still triggered the orders is this normal ?

Hi..

I'm trying to setup EA using the EA from the first page itself, most of the entries when i drag the EA is defaulted, I'm running on ibfx GMT0, what are the settings needed.. pls let me know if its documented in any forums.

Hi Merritt,

I think that it is I nice system, but I don't programmed in mql4, and I need thay your system only open 2 trade per session and the first trade only take 10 pip at profit and the second only take 5 pip to profit, also I need to add some parameter for example if the hight level to the box is 1.5960 only open the buy stop trade if the price up 5 pip more than the hight level (1.5965) and apply the same parameter to the sell stop, I appreciate your colaboration, thanks.

Hello xmph,

Let's first define this system which I believe is full of holes in regards to price direction and minimizing risk. The system is defining support and resistance as well as the Stoploss using the Frankfort session's high and low. The top of the box is the high and the bottom is the low. Any cross of the price of the Frankfort session high or low initiates a buy long or a short sell. The hope is this break will be substantial enough to hit the TP levels. If the price crosses the top or bottom and doesn't reach TP1 we wait until the price crosses the opposite top or bottom for a loss. This loss is a variable as post #1055 shows a high of 84 pips to a low of 41 pips.

The prices probable direction and it's eventual target before reversing is left to pure chance and no analysis, either chart or market news comes into the trades. The second and subsequent trades are all done with as little thought as the first trade only this time we increase our bet by adding to the number of contracts by use of a Martingale System.

The thinking here is our odds of winning are getting better since we lost our ass the first time around we will not only win but cover our stupid mistake in the first trade. The longer we lose the better the odds of winning on the very next trade. Money is no object and is just a tool to make money. It's sort of like the oil companies drilling wells. The more dry holes you get the more likely the next one will strike oil. Right. The only difference is the oil companies hire a lot of smart people to increase their odds of hitting oil. In other words they know where to drill before they risk the cost of drilling.

But here we throw caution to the wind and risk/reward is the farthest from our minds. Chart analysis and fundamentals aren't necessary. This is a time based, prior session resistance and support momentum system with neither price direction nor price target ever taken into account.

Now you are saying to optimize this strategy a Sharpe Ratio, or a Modigliani Risk-Performance adjusted least square optimization calculation will make this gambling system all better. Right.

The whole world would love this idea if it had a chance in hell of actually working. They'd all quit there jobs and go the casino everyday. I'd like a little of that saki you've been drinking it would be easier to swallow this idea.

If you just look at post #1055 which is the last chart Mer posted you'd see a loss of -2665 pips. That equals $13,325 of loss. The next trade is 170 contracts or $263,515.30 + a minimum cost of $3,500 so we have out of pocket cost so far of $279,976.30. He shows a gross profit of 5,173 pips or $25,865 for the week. The risk was 41 pips times 170 contracts times $5 equals $34,850 + costs of around $3,500 is $38,350 total risk to gain an overall weekly gain of $25,865. This risk I remind you is with no consideration of any known trading analysis and would do just as well if you'd flip a coin. This is not putting the system or anybody associated with this system down but is just the fact of the matter.

Who needs a complicated formula to figure out this is just plain crazy. This system needs a warning put on it. "ANYBODY WITH A NERVOUS CONDITION OR A HEART PROBLEM SHOULD NOT TRADE USING THIS SYSTEM".

The two risk evaluation calculations you are asking help on cannot be calculated without some idea of the return on investment. They arrive at a number for comparing one set of values to another.

If anybody here is using this system "as is" and making real money I'd be surprised. This is not to say you couldn't make money in the short term but in the long run the odds are you will lose it all. Don't just believe me on this as all you have to do is google "Martingale System".

I doubt very much if any of you have the means to trade these amounts anyway so any discussion of using this system with the Martingale is probably not worth debate. The other side of the coin is without the Martingale your inevitable losses due to the system being price directionally challenged and a non-existent target will just lengthen the time of your demise.

The ones who still like this system I'd suggest using the maximum box size so 84 pips never is your box size. Adding some things to tell you where the price is most likely to be heading would also be wise. Learn the fundamentals. The first and foremost is to learn how to trade before using a system like this one. Without this knowledge you will not recognize the pitfalls of trading. The markets are a dangerous game for the traders who know what they are doing much less the novice.

The assumption that trading on a demo will teach you to trade is totally wrong. Trading without knowledge just creates bad habits that will keep you from being a professional trader. Trading a demo account with $50,000 when all you can afford is a $5,000 account is not going to work.

I know of only one trader who could and would trade 170 contracts at any given time. This is a professional trader who trades with other peoples money. Nobody bets the house on a single trade. Long term survival should be your first and foremost thought and this is only achieved by learning and controlling risk. Once your money is gone it's game over. It's just that simple. Once you've learned the finality of your trading decisions it will become obvious to you that trading and risking your hard earned money without the knowledge of how to trade is a recipe for financial disaster.

Xmph, if you lost 5 out of the last six days you've got to ask yourself what is wrong with those five days. Thinking that winning one out of six is a good thing is not how you should be thinking. If I lost that many trades I would quit trading until I found out what I was doing wrong.

Trade well and prosper,

Johnny

Wow, where the hell did that come from, is it that time of the month? You, of all people, already knew the risk of this strategy with all the previous posts that were made. Open your own thread if you have all the answers, my friend or please leave and keep the negative comments to yourself!

i have to agree with him mer.

its a shame that this thread has not continued the work of simple london breakout.

we should be focusing more on what merlintrade is doing in simple london breakout 1

that is a trading system.

im not sure how many people are interested in martingaled stuff to hell.

lets get the mechanics underneath right then go from there.

breakouts are profitable - nothing mad, but they do work.

i know this is pissing on the parade and negative comments arent welcome but i hope this is seen as consructive comment as said, its a shame.

breakouts are a beautiful passive system.

tip.... GU EU EG EJ

Hello Mer,

First of all I love this system and thank you and Squalou for putting it on FF but I know the pitfalls and I know how to trade. The newbs I see posting all have dollar signs in their eyes. You and some others are posting things that look like a gold mine to them but the cold hard fact is it's fool's gold unless you know how to trade and most importantly how to survive.

To survive this game you need to manage risks which has been written by more intelligent people then either one of us. It is commonly written to risk only two percent of your account on any given trade. Following this rule the risk of $38,350 as I explained in my previous post would suggest a total account value of $1,917,500. A rather hefty amount would you not agree.

On the Forex-money-management site it is written as follows:

Before entering a trade, reassure that risk / reward ratio is at least 1:2 (but ideally 1:3 or higher), which means that chances to lose are three times less than promises to win.

The profit of $25,865 on a risk amount of $38,350 falls way short of this goal. According to many professional traders this was not a good trading week when risk is factored into the equation.

Since the box size equals the stop loss and this is fully adjustable leaving the system with an 84 pip box size would nullify the trade for most traders using the risk/reward factor of two percent. Why you posted that in your chart is a puzzle to me. An 84 pip box at the top of the chart?

The buy long occurred at the high which was very near the previous day's high which is a major point of resistance. The potential profit of 84 pips X 2 = 168 pips just wasn't there to be had. The outside potential was only the difference between the previous days high and the price at the time of the buy long. This profit potential was hardly enough to cover the cost much less any profit. A knowledgeable trader would never have made this trade hence my suggestion to learn how to trade first before trading this system or any system for that matter.

The negative comments were for the uninformed new traders. Many are not even reading post one much less the whole thread. The smarter traders already know the pitfalls and are trading accordingly. You may get upset with my comments but that was not my goal. Enlightenment is sometimes a hard pill to swallow.

This system can lose and can lose in a big way as seen on your very own chart. A negative 2665 pips or -$13,325 is beyond most traders accounts. I wish for this to be a perfect system but it is not and like most systems it has flaws. The biggest problem is how fast it can lose money and the low win to loss ratio.

Calculating the risk/reward of each trade is not a difficult thing with the right tools. Using complicated formulas to calculate risk is totally unnecessary as it is basic math. The tools don't exist here to estimate reward but once learned can easily be added to the charts. Enough said.

Trade well and prosper Mer,

Johnny

Yeah some of the question that i've posted was not answered, perhaps mer was busy pippin'..

The system is fine for me martingale is optional per mer if your account allows it im not using it and i am above my water mark since december. when the market is range bound the ct strategy will work better obviously and ea for this would be awsome as well many thanks mer and squalo

Thanks ! my eyes almost went dry reading a remake of previous conversations.

hi, this a good EA but a need to know taht how add 5 pip more at the hight level and lowest level at the box, example if the hight level is 1.5945 i need to the ea open the trade in 1.5950 to the buy trade and the same way to the sell trade, adittional, I saw that i need to waiting to trade at the last bar for example, if set the EA to 4-8gmt the Robot start to trade at 8:15gmt so i'm waiting to this bar close and if kept inside the box is a good oportunities to trade, i think that if add 5 pip more is and a filter to prevention, thanks

what is the time range that are recommended for eurusd, eurgbp and gbpusd if one is using 3-Tier breakout system? I am new here but have been using this system on my mt4 chart. I need clarification on the start and end time for the range to trade the breakout.

thumbs up to the thread starter, for the last year i ve been looking for a decent breakout system on the gbp/usd. There is a lot to like about this system. Have you ever looked into taking with trend breakouts initially, perhaps using a higher time level rsi reading to determine bias (similar to the lawgirl thread)?
Cheers

hi harion
set the EA london breakout at 4gmt to 7gmt, thanks

Thanks for the response.

Does anyone know if the London breakout EA(v1.3b) is working fine on mt4 platform? pls kindly share the current settings so that I can do the same on my chart. thanks.