LFB System - London Fib Breakout | Forex Factory

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LFB System - London Fib Breakout

  • #1
  • First Post: Edited Apr 30, 2013 5:00am Apr 28, 2013 3:15pm | Edited Apr 30, 2013 5:00am
Hello traders this is possibly the best "indicator free system" around. It relies only on Fibonacci and breakout of certain levels. It has a fixed Take profit levels (3 levels) and a stop loss for the trade. I have been trading this system for the past one and a half years. I have made this system as simple as possible. Never clutter any indicators in to the system, trade the market with setup and rules below.

Again do not think of this system as 100% win record, but i can tell you if you stick to the rules you will get 90% success with the trades.Demo it forward to realize the potential of this system.

Detailed System Performance
Wait for the market to come to you.. then take the green pips..
  • #2
  • Edited 3:51pm Apr 28, 2013 3:16pm | Edited 3:51pm
LFB - London Fib Breakout System - Requirements

1. Mt4 30 min Chart
2. Pairs to Trade - GU, EU
3. Fibronacci with extensions -61.8, -78.6, -1.0 levels, these are named as Take profit 1, Take profit 2, Take Profit 3
4. Any forex broker is ok (preferably UK based) with the system but correctly calculate the London opening in your Platform(for me it is close of 10th hr candle).

Setup

1. First draw the high of the first 20 candles(30 min candles ie 10 hrs prior to London open). This forms the upper limit before London opens.
2. Next draw the low of the first 20 candles. This forms the lower limit before London opens.

Entry and Exit

1. Enter long when a 30 min candle breaks the upper limit and wait for retracement back to the line to take the trade, Enter short when there is lower limit break.
2. Now take your fib and measure low to high for uptrend and your TP1,2,3 levels should show up, Stop loss will be close of candle on the opposite side, ie below lower limit for uptrend and vice versa.

Setups to Avoid

1. Do not Trade news, a Single spike could hit our days TP1,2,3. Once all the levels are reached no more trade for the day.
2. Always wait for candle close and do not jump in to the trade while the candle is in action.


Why this system wins compared to other breakout systems?

1.Here we look for valid breaks by seeing the close of the candle, other breakout systems lose with whipsaws from big boys.
2. Even in a ranging market our system wins, if you have a valid upper beak out and you are in a trade but your TP1 did not reach but it closes below the lower limit then you can close the trade and trade on the opposite side to recover half your losses.
Wait for the market to come to you.. then take the green pips..
  • #3
  • Edited 3:58pm Apr 28, 2013 3:17pm | Edited 3:58pm
Ideal Setup

Attached Image (click to enlarge)
Click to Enlarge Name: gu demo.png Size: 32 KB


No Trade Day

Attached Image (click to enlarge)
Click to Enlarge Name: no trade day.png Size: 32 KB
Wait for the market to come to you.. then take the green pips..
  • #4
  • Apr 28, 2013 3:55pm Apr 28, 2013 3:55pm
Quoting PIP Guru
you will get 90% success with the trades.
Have you traded this system?
  • #5
  • Apr 28, 2013 4:00pm Apr 28, 2013 4:00pm
Quoting Arctic4x
{quote}Have you traded this system?
Yes mate, will post live charts tomo. The system is so simple and Successful.
Wait for the market to come to you.. then take the green pips..
  • #6
  • Apr 28, 2013 4:03pm Apr 28, 2013 4:03pm
Quoting PIP Guru
{quote} Yes mate, will post live charts tomo. The system is so simple and Successful.
Ok. Well... anyway don't expect to have 90% successful trades in the future. Good luck!
  • #7
  • Apr 28, 2013 4:11pm Apr 28, 2013 4:11pm
Quoting Arctic4x
{quote}Ok. Well... anyway don't expect to have 90% successful trades in the future. Good luck!
Yes I know past performance do not guarantee future results, But i have traded this system for one and half years through surging up and down trends and also in ranging periods. These setups got refined from my experience, one has to trade forward to realize its real power combined with the news that is in store for the day..
Wait for the market to come to you.. then take the green pips..
  • #8
  • Apr 28, 2013 5:06pm Apr 28, 2013 5:06pm
Hi thanks for the thread and system. Have you kept accurate stats of the success of the system for the last year?

I would like to clarify the retracement to the line. On the 1st chart you posted you show entry on the momentum bar and not the first two retracements to the line?
  • #9
  • Apr 28, 2013 7:03pm Apr 28, 2013 7:03pm
Hello,

Thanks for sharing this.

A few questions.

Being at New-York time, can this be traded using New-York open instead of London? I imagine it can. What is so special about London open?

You say wait for the high/low break and a retrace to the break line. Any number of pips minimum for the break is valid. Say the EU breaks on the upside at 1.3200. It only goes up to 1.3210 and comes back down to 1.3200. is this enough of a break?

Thanks

Insider
  • #10
  • Apr 28, 2013 7:32pm Apr 28, 2013 7:32pm
Hi,

1. I am not sure what do you mean for sentence below. Would you please explain with chart?
Even in a ranging market our system wins, if you have a valid upper beak out and you are in a trade but your TP1 did not reach but it closes below the lower limit then you can close the trade and trade on the opposite side to recover half your losses.

2. Arrow indicated in the chart, is it a valid break out?

3. Where do you set stop loss base on chart attached?

I am not looking for 100% holy grail system. However 90% win rate is attempted enough. Keep it up!!!
Attached Image (click to enlarge)
Click to Enlarge Name: eu.gif Size: 12 KB
  • #11
  • Apr 29, 2013 12:08am Apr 29, 2013 12:08am
Quoting pasopvirpot
Hi thanks for the thread and system. Have you kept accurate stats of the success of the system for the last year? I would like to clarify the retracement to the line. On the 1st chart you posted you show entry on the momentum bar and not the first two retracements to the line?
Yes i have moved little bit to the right (photoshop error mate) but actual entry was next bar after the break when it retraced( two bars before).
Wait for the market to come to you.. then take the green pips..
  • #12
  • Apr 29, 2013 12:14am Apr 29, 2013 12:14am
Quoting insider999
Being at New-York time, can this be traded using New-York open instead of London? I imagine it can. What is so special about London open? You say wait for the high/low break and a retrace to the break line. Any number of pips minimum for the break is valid. Say the EU breaks on the upside at 1.3200. It only goes up to 1.3210 and comes back down to 1.3200. is this enough of a break? Thanks Insider
I have not personally traded it mate, why i choose london is for the following reason

EU and GU has most moves at london open till london close, the momentum before the london open(10 hrs prior) sets the pace for the system, the momentum gradually dies at Newyork open.

Regarding the break even a 1 pip break is valid provided the 30 min candle should close a pip above upper limit and vice versa
Wait for the market to come to you.. then take the green pips..
  • #13
  • Apr 29, 2013 12:15am Apr 29, 2013 12:15am
Quoting sam2vt
{image}
It is not a valid break as the candle did not close below the lower line only it was whipsawed by big boys so according to your chart there was no trade for the day.
Wait for the market to come to you.. then take the green pips..
  • #14
  • Apr 29, 2013 2:00am Apr 29, 2013 2:00am
Struggling a bit with the setup of the fibonacci levels, can anyone please verify the TPs on a potential EUR/USD trade for the open now?
  • #15
  • Apr 29, 2013 2:25am Apr 29, 2013 2:25am
Quoting PIP Guru
{quote} It is not a valid break as the candle did not close below the lower line only it was whipsawed by big boys so according to your chart there was no trade for the day.
Thank you very much.
  • #16
  • Apr 29, 2013 2:55am Apr 29, 2013 2:55am
Quoting pasopvirpot
Struggling a bit with the setup of the fibonacci levels, can anyone please verify the TPs on a potential EUR/USD trade for the open now?
The Eu trade is closed mate, there was no oppurtunity for us to get in it did not retrace but hit the TP levels so i will not trade EU today..

But GU looks promising lets see, am in the trade target 1 - 5558 region
Wait for the market to come to you.. then take the green pips..
  • #17
  • Apr 29, 2013 3:03am Apr 29, 2013 3:03am
Quoting PIP Guru
{quote} The Eu trade is closed mate, there was no oppurtunity for us to get in it did not retrace but hit the TP levels so i will not trade EU today.. But GU looks promising lets see, am in the trade target 1 - 5558 region
I see.

Just a question on the TP levels, they are quite close to each other, why did you decide to use 3 levels rather than just 1 or 2? If TP1 is hit, SL for the others remain the same if it turns between your TP levels?
  • #18
  • Apr 29, 2013 3:12am Apr 29, 2013 3:12am
Quoting pasopvirpot
{quote} I see. Just a question on the TP levels, they are quite close to each other, why did you decide to use 3 levels rather than just 1 or 2? If TP1 is hit, SL for the others remain the same if it turns between your TP levels?
tp 1 61.8% level i put the trade at BE

tp 2 78.6 level i move stop loss to tp1 level

tp 3 100% level hits after that..

All this levels will save your hard earned pips.. to see these levels i am using fibs.
Wait for the market to come to you.. then take the green pips..
  • #19
  • Apr 29, 2013 3:30am Apr 29, 2013 3:30am
Quoting PIP Guru
{quote} The Eu trade is closed mate, there was no oppurtunity for us to get in it did not retrace but hit the TP levels so i will not trade EU today.. But GU looks promising lets see, am in the trade target 1 - 5558 region
Do you mind to show the EU chart with fib plotting on? Because from my chart the non of the TP level is not hit.

Thank you.
  • #20
  • Apr 29, 2013 3:34am Apr 29, 2013 3:34am
Quoting sam2vt
{quote} Do you mind to show the EU chart with fib plotting on? Because from my chart the non of the TP level is not hit. Thank you.
Sorry... Please ignore the post. It's my mistake.
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