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Forex trading strategy #7 (Simple breakout System)

The idea behind this simple Forex trading system is to capture an early move of the price when it starts to establish its new direction/trend for the day.

As we know the Frankfurt market opens at 2:00 am EST (which is 7:00 am GMT), then an hour later the other giant - London market opens at 3:00 am EST (which is 8:00 am GMT). The European session is the first major session for each coming day.

So, what do we do?
We start with 1 hour time frame, preferred pair - GBP/USD and no indicators.
The price range we are going to focus on is from 1:00 am EST to 2:00 am EST.
We look for the highest high and the lowest low of the price in that range and simply draw parallel horizontal lines through those extremes that will create a tunnel.

Now we are ready to move to a smaller time frame - 5 minute chart - and watch for the whole 5 min candle to close outside the tunnel which will provide a signal for us to enter with the open of the next candle.

We use a 20 pip stop OR the other side of the tunnel - whichever is less.

FOREX SIMPLE BREAKOUT TRADING SYSTEM


FOREX BREAKOUT SYSTEM


We are aiming at at least 20 pips profit. After that we have several options: lock the profit in, start "chasing" the price with a trailing stop by placing the stop just below the lowest low of the previous 5 min candle, or simply exit within the three consecutive hourly candles from the moment the trading order was filled.

Happy Forex trading!


http://forex-strategies-revealed.com/


hi Edward

nice system and good job is there any new for this system?

what about doing th same steps on 1hr frame with gbp/usd?

Thx

Thank you.
I use the system as is. What are your suggetions about hourly charts? What timing and price range do you propose to use?

Cheers,
Edward.

Hi Edward The price range we are going to focus on is from 1:00 am EST to 2:00 am EST? i need the time in GMT please CJA

Hi CJA,
GMT = EST + 5:00
Thus you would have 6:00 am GMT to 7:00 am GMT.

Thx Edward
Hi Edward What abouy news with thi strategy? anyway i,ll try it today with UK CPI and i,ll post the resulte RHappy tradeing :)

hans-123 on strategybuilderfx.com... I think that is the original.

It is ok, if that website has it, I hope they don't mind. We publish a lot of strategies here, some of them are sent by our users that claim it to be their own systems. We don't track the original source unless it is mentioned during the submission.

As long as everybody is happy and traders can learn something I think it is just fine.

Regards,
Edward.