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Daily Break Strategy

  • #121
  • May 22, 2012 8:45am May 22, 2012 8:45am
Quoting lemna
Hi Basber

Thanks for sharing all your hard work, this strategy looks solid.

I am in the process of back testing it myself and during the period I am looking at the days after inside days seem to have a very high win rate.

So I was wondering if you already looked at IB days, NR4/7 etc. concept within this strategy while you were designing it?

I think it might produce somewhat lower average months but maybe smooth out the equity curve.

Anyone else have any thoughts?

Yes, you're absoloutly right. I didn't bring it up to keep it as simple as possible. Take the main idea from the method, then personalize it to fit your personality and your knowledge. You can of course change TPs to take the most out of market. Trade management is a very hard concept, and unfortunately there no only "one way". I presented the basic method. Don't change everything. I suggest that you and anyone else work on TP2 if you want to change it. let the rest be as it is.

Regards,
Basber
Trading methods are designed to put the odds in our favor, not predicting.
  • #122
  • May 22, 2012 10:31am May 22, 2012 10:31am
Quoting lemna
Hi Basber

Thanks for sharing all your hard work, this strategy looks solid.

I am in the process of back testing it myself and during the period I am looking at the days after inside days seem to have a very high win rate.

So I was wondering if you already looked at IB days, NR4/7 etc. concept within this strategy while you were designing it?

I think it might produce somewhat lower average months but maybe smooth out the equity curve.

Anyone else have any thoughts?
Good observation,

If with further testing it is proven that what you have stated increases the probability of the wins for this system then to counteract the lower average monthly returns you could just take a bigger risk since the probability is higher....
Just a suggestion.
  • #123
  • May 22, 2012 3:37pm May 22, 2012 3:37pm
Quoting mannai70
Good observation,

If with further testing it is proven that what you have stated increases the probability of the wins for this system then to counteract the lower average monthly returns you could just take a bigger risk since the probability is higher....
Just a suggestion.
When someone wants to increase his/her risk, s/he must notice his/her maximum drawdown very very carefully.

Many people asked "when you net 20% profit per season with less than 1% risk on every trade, why don't you double your risk to double your income ?"
The answer is a little complicated for new traders, but for whom who had more than 5 years of experience in this business, it's obvious. Trading is mostly a battle of mind. The most important skills in trading concludes in managing your emotions. In this example, big drawdowns make you suffer a psychological burden, and many things came by next that may damage your account. My account is huge, so no need for high risks and income is sufficient. I myself always suggest risks lower than even 1% for traders. Risk around 2% is okay if you're trading on higher timeframes, such as daily and you don't do more than 1-2 trades per week. When you increase your risk, many other things (mostly phychological matters) may come into play that you may not handle well. It's not a mathematical formula, it's human nature and no one can eliminate it. More experienced traders just can handle it, not eliminating their weaknesses.

Just my 2 cents though ...

Regards,
Basber
Trading methods are designed to put the odds in our favor, not predicting.
  • #124
  • May 22, 2012 5:29pm May 22, 2012 5:29pm
Thanks Guys

I just finished backtesting May to end 2nd week December 2011 on GMT candles.

The system performs so well during that time that there's no advantage to be gained by only trading after the inside days.

I got an average monthly win (risking 1%) of 6.4% and only 1 losing month (-0.7%) and a max drawdown of -3.9% (and that was during a winning month).

What does look even better, as Basber suggests, is something like being more ambitious with the TP2 targets after the inside days, especially where the first trade fails or only makes TP1, then reverses right out the other side.

The earlier in the London session the reversal happens, the better.

What a fine strategy. Basber, this is a work of art.
  • #125
  • May 22, 2012 7:26pm May 22, 2012 7:26pm
Quoting lemna
Thanks Guys

I just finished backtesting May to end 2nd week December 2011 on GMT candles.

The system performs so well during that time that there's no advantage to be gained by only trading after the inside days.

I got an average monthly win (risking 1%) of 6.4% and only 1 losing month (-0.7%) and a max drawdown of -3.9% (and that was during a winning month).

What does look even better, as Basber suggests, is something like being more ambitious with the TP2 targets after the inside days, especially where the first trade fails or only...
Very special thanks for the statistics and the informative findings you shared with us.
  • #126
  • May 22, 2012 11:40pm May 22, 2012 11:40pm
Quoting lemna
Thanks Guys

I just finished backtesting May to end 2nd week December 2011 on GMT candles.

The system performs so well during that time that there's no advantage to be gained by only trading after the inside days.

I got an average monthly win (risking 1%) of 6.4% and only 1 losing month (-0.7%) and a max drawdown of -3.9% (and that was during a winning month).

What does look even better, as Basber suggests, is something like being more ambitious with the TP2 targets after the inside days, especially where the first trade fails or only makes...
Now you can enjoy the ride Lemna,

Don't overtrade

Regards,
Basber
Trading methods are designed to put the odds in our favor, not predicting.
  • #127
  • May 23, 2012 10:49am May 23, 2012 10:49am
Hi Basber, Chris from South Africa here,
I'm relatively new to forex trading. Now I've been wondering what brokerage/trading software to use that allows "trigger" orders (if that's what it's called?)
I've been trading on a dummy MT5 account and have had pretty good success over the first 2 months of trading. I found your system, started reading the thread and it looks really great!

Not sure if you're allowed naming brokers etc on the thread? But any help in any regard to the types of orders to be placed for the SL fib lines would be greatly appreciated.

Thanks in advance,
Chris
  • #128
  • May 23, 2012 11:29pm May 23, 2012 11:29pm
Quoting cpeyper7
Hi Basber, Chris from South Africa here,
I'm relatively new to forex trading. Now I've been wondering what brokerage/trading software to use that allows "trigger" orders (if that's what it's called?)
I've been trading on a dummy MT5 account and have had pretty good success over the first 2 months of trading. I found your system, started reading the thread and it looks really great!

Not sure if you're allowed naming brokers etc on the thread? But any help in any regard to the types of orders to be placed for the SL fib lines would be greatly...
It doesn't matter Chris. You can use whatever broker you want. There are many websites and forums even here discussing pros and cons for different brokers. I'm not familier with all of them, so suggesting one is not what I like to do.

Regards,
Basber
Trading methods are designed to put the odds in our favor, not predicting.
  • #129
  • May 29, 2012 3:10pm May 29, 2012 3:10pm
Hello, is anyone activly testing the EA? is it working correctly? what about the secondary trades?

Thanks
  • #130
  • May 31, 2012 7:43am May 31, 2012 7:43am
Hi All

I did a back test of the last 4 years and thought I would share the data here (attached), comparing last year with last 4 years. No trades on UK public holidays or last 2 weeks of December.

My analysis is, watch out if you get 3 consecutive losing months or a draw down bigger than 10 units of risk at any time.

I can't claim every trade in the back test as 100% accurate but it should be accurate enough to give a big picture. Even with slippage and bad execution, this system still has a good expectancy. But will be pretty hard to sleep without an EA!
Attached File(s)
File Type: pdf Daily Break System Backtest.pdf   97 KB | 1,281 downloads
  • #131
  • May 31, 2012 10:17am May 31, 2012 10:17am
Thank you for the results Lemna
  • #132
  • Jun 4, 2012 1:21am Jun 4, 2012 1:21am
Quoting lemna
Hi All

I did a back test of the last 4 years and thought I would share the data here (attached), comparing last year with last 4 years. No trades on UK public holidays or last 2 weeks of December.
Hi lemna,
Could you please place your back test result for last 4 year in format:
TP1 – x;
TP2 – y;
SL – z;
Like Basber did in his post 109. Thanks in advance.
  • #133
  • Jun 4, 2012 3:51am Jun 4, 2012 3:51am
Sure, over 4 years it was like this:

TP1 - 320
TP2 -283
SL - 355

plus a handful of trades at close Friday that were somewhere in between.

I also took trades if Sunday gap came down to entry within an hour.
  • #134
  • Jun 4, 2012 3:53am Jun 4, 2012 3:53am
here is the fibo indi depends on high-low its draws...
Attached File(s)
File Type: ex4 AutoFibonacci.ex4   7 KB | 561 downloads
  • #135
  • Jun 4, 2012 7:48am Jun 4, 2012 7:48am
Quoting lemna
Sure, over 4 years it was like this:

TP1 - 320
TP2 -283
SL - 355

plus a handful of trades at close Friday that were somewhere in between.

I also took trades if Sunday gap came down to entry within an hour.
Thanks Lemna - How do you run the tests? any EA? I have some tweaks that I wish to apply and see if we can improve things.
  • #136
  • Jun 4, 2012 8:57am Jun 4, 2012 8:57am
I had a look today in the EA, it places two orders in the previous day low and high bur that's all it does. There is no OCO, no secondary trades and no SL to BE.

Anyone maybe using a different ea?

Thanks
  • #137
  • Jun 4, 2012 10:57am Jun 4, 2012 10:57am
Hi Wala. d,

Believe it or not, I did a manual backtest with forex tester. Time consuming but at least this gives you a feel for a strategy that you dont get from EA testing. I'm sure there were a few errors but over such a large sample I am confident the statistics I have are correct proportionately.

I have no EA and am trading it manually from GMT using alerts to my phone.

I did not look in detail at whether trades during one session had better or worse results (e.g.. Asian session). But during the manual process I did not get a feeling that time was much of a factor. I might be wrong.

So I can't help with programming but would be very interested to hear your ideas for tweaks (or ideas anyone else has) and to give my opinion based upon what I saw already.

My thoughts are towards looking for big TP2 profits at reversals after NR4 inside days or NR7 days where price has hit long term S/R ideally with Fib confluence.

Sometimes though, these days can be complete disasters, so I wouldn't choose them blindly.
  • #138
  • Jun 4, 2012 11:00am Jun 4, 2012 11:00am
I went live with this last Friday.

Had a sell loss in the Asian session, then a buy reversal loss I think just at the end of the Asian session. Around NY open there was a buy that reached TP1, and then a buy reversal that reached TP1 but came just 1 pip short (with my broker) of TP2 then got stopped out for BE. To anyone else trading it hope you made that TP2!

No trades for me today or tomorrow as London holiday.
  • #139
  • Jun 4, 2012 11:15am Jun 4, 2012 11:15am
london ,newyork session are a profitable one.i dont trade asian session.if someone like to trade asia then trade audusd,nzdusd.london,newyork is the price drivers pair trends very well.
  • #140
  • Jun 5, 2012 6:22am Jun 5, 2012 6:22am
here is the short call
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd short call.gif Size: 15 KB
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