Frankfort Breakout EA

Frankfurt Breakout EA

This thread is an archive of trades and development of a trading system. My goal with the thread is to develop and optimize a simple system for consistent profits over the long term. This first post, since we can edit it over time, I will describe the theory and the variables I hope to optimize.

Theory of the Frankfurt Breakout EA

I know there are many European or London breakout strategies, however looking to make this successful based on my analysis through development and testing. The range of the 6AM (London Time) / 1AM (NY Time) candle seems to hold significance in terms of support or resistance on an intraday basis. Once this range is broken, we have three scenarios:

1. Price of the instrument continues in the direction of the break for a reasonable % of the daily ATR
2. Price reverses (prior to a % of the ATR) and re-tests this range, then continues in the direction of the original break
3. Price reverses and closes above the opposite side of the range (this would be a failed trade)

This initial strategy will be based on option #1 where we are trading the breakout in anticipation of a continuation move and closing the trade prior to the US open (ideal scenario) or prior to the next 6AM candle if the price has not breached and closed above the other side of the range. In the future, we certainly could entertain evaluating option #2 as a possible trading opportunity, but initially option #1 will be the focus. In the next couple posts, I will demonstrate the above logic with charts.


Entry – Stop Loss – Exit

1. Entry will be taken once the price breaches and closes +5 pips above/below 6AM high/low
2. Timeframe – H1 chart
3. Instruments Traded – GU, GJ, GA, GCHF, GCAD, GN, EU, EJ, EG, AU, NU, UCHF, UJ
4. Lot Size – 0.25% of account balance
5. Stop Loss – At an hourly close +5 pips close above/below 6AM high/low on the opposite side of the range
6. Take Profit – 50% of the 30 day ATR
7. No indicators are used
8. Should trades not reach profit or close on opposite site of range, will let trade enter next session for continuation. If break is in the opposite direction, exit trade and take new trade in direction of signal.
9. Monday after NFP, look for continuation if numbers are strong and trade with NFP direction. Resume normal methodology on Tuesday.
10. Holiday's not to trade - MLK

Variables to Optimize

1. Instruments to trade
2. Stop Loss
3. Take Profit
4. Days to trade
5. Money Management
6. Range of 6AM Candle
7. Pips Above / Under Range For Entry

Other Comments


I am going to begin manually trading this strategy looking to enter all opportunities at 8AM (London Time) / 3AM (US Time) from the Frankfort breakout. The goal is to capture the % of ATR and to be out of the trade prior to US open.

Down the road, once we have a few months of data, planning to develop an EA to assist with the early morning entries and take all trades precisely at the start of the new hour.

I have set up a small live account with trade explorer to track all trades and performance. Yes, live. My philosophy is “you cannot drive the boat with one foot on the dock”. Live results are important.

I have been evaluating this strategy on the charts for about the last year or so. I have a lot of biases concerning the variables, however they are just biases. I do not have concrete data to verify them. I am hoping this thread will help confirm these biases about the strategy.

If you would like to participate, you are welcome. Please be respectful to others and look to add value with your ideas. Should you present statements, conclusions or ideas, provide charts or data to back them up. I do work full time at my day job, so I am not in front of the computer at all times. I will not be the fastest responder due to other responsibilities, but I will get back to you.

Finally, I am not a professional trader or adviser. If you follow any part of this system or any future EA’s which are developed, you are responsible for your trades, execution with your trading platform and your results. I am simply sharing an idea, collecting data and adjusting to the market for potential profitable gains.

Happy Trading to All…

Interesting idea, I will be following.

Here are a few charts to show the logic of the system. First is the GJ. To clarify a few items on the chart:

1. The red horizontal lines mark the high and low point of the 6AM (London) / 1AM (NY) candle
2. The blue horizontal lines are the point of entry, H1 close above or below the candle
3. If we are using a 70 pip ATR target (50% of the 30-day ATR range), we have a number of wins, two trades which would be closed in some profit and 1 loss

Example of the EU.

my first time to look at this side of stratergy,good luck,hope it does well,Im in,thank's

looks promising!

One final example of the UCAD and it shows one of the bias I have for the system. I believe the EUR and GBP will perform better versus non-European instruments. Commodity currencies as well tend to be a bit choppy. However, we will see this in the results. An example of why the UCAD is not on the list to be evaluated.

It looks fine, but needs a backtest or someone to help for creating the EA.

Good luck PIP Combine

Everyone, thanks for the kind words and comments. The trade explorer is up and should be activated with the first couple trades. We will begin making some trades and logging some data....

Hey Pip !
Wish you good luck with your Thread !
By the way .. Frankfurt is written with " U " ..
I know exactly , I`m from here/ Frankfurt.
I´ll keep an eye for your results .. but I like the idea.

Hi - before you any go further check out http://www.forexfactory.com/showthread.php?t=442787 we have developed an ea very recent which should do what you want. Different strategy but the required settings are very close.

Hope this helps and saves a lot of time. Good luck. In commercial section but NOT trying to sell as you will see.

Sesamstrasse, first off my apologies and quite embarrassing . I believe that is a clear example of as my age increases, my brain cells actually decrease. I have changed everything I can on post one. I might have to lobby FF to assist me with the thread title though. There is a city here close to me here in the US, which I pass frequently and it is spelled Frankfort. Thanks for the note, completely spaced that...

Happy trading in Germany...

Claudia, thanks for the info and your EA is solid. It has about every functionality I was thinking of in post one and a few others I did not include, such as the large move in Asia prior to Europe. The only difference I can see is the logic of specifying the 6AM candle high / low versus your pivots for entry. With the selection of your different pivot types, can you specific a specific candle vs. the pivots from the day? Otherwise all the components are there.

Thanks again...

Hanover did the hard work and is to be thanked for that,

Logic of 6 am candle there is none. The ea is designed to take first close above/below the pivot (I use floor) from the close of the opening hour bar.

The specific candle day on day - no.

That's it!

Edit understand now missed your point a bit. The close of the 6 am is Frankie open obviously. Now the whole point of the ea was to take the overnight trades which are few but low risk, then continue trading manually from Frankie/London. I trade mainly cable.

Here is an example of GJ and possibly continuing today's position. Originally, my thought was to end the trade if stop or target was not reached prior to the next European session. However, why not let it ride into the session and if it breaks in the same direction let it run with the new position. If it breaks in the opposite direction, that means exit the first position and take the second with the breakout. I will test this tomorrow and see how it does. Chart is below on GJ currently. Monday was win, Tuesday was loss, Wednesday still in play.

I use his Daily Line Boxes indicator, which is awesome. He contributes great stuff for us traders. Thank you for the info about the EA. Even though I don't believe I can get it to enter on this methodology, it provided some additional ideas.

Best of trading to you....

Although the GJ and GU went flat on Thursday and did not go to profit, they did break in the right direction. I took the Wed trades off after a few hours and made a few more pips. As long as it is above/below the 6AM high/low, perhaps in consolidation mode after a big move, I like the options of continuation at the next session.

Some reflections after the first week of manual trading:

1. As I mentioned above, I like letting trades continue to the next session- possibility of added pips in the trend.
2. The 50 pip hard stop does not work well and needs to be variable per pair. Too large for some, too small for others. Will plan on exiting at the +5 abov/below opposite site criteria on hourly close.
3. A bias going into this system was Monday & Tuesday are less consistent days (choppy), while later in the week has more consistent moves. Seemed to the be case this week.
4. My manual trading was highly inefficient. Missed a number of entries and exits due to the volume of pairs we are testing. After we optimize some of these assumptions, looking forward to development of EA.
5. Had some good trades for the week which went as planned

I will post some charts to show the good, bad and ugly. I will update post #1 with a couple minor modifications.

Good and bad from the EG...

Good concepts from GA trades...

After doing some homework on the Monday after NFP, there is usually continuation in the same direction. Enclosed is the EU chart from December and GU chart from November. So, on Monday I am going to trade the system with a bias for continuation, then on Tuesday back to normal operation. I included a chart of the AU from Friday. In this case not planning to fight the Friday momentum. If we get a break long, we will take that trade. If we get a break short, we will pass on that trade. We will see how it turns out from the day and if any significance occurs after NFP.