Forex trading strategy #7 (Simple breakout System)

Sandra,

Even my observations are very much similar to your's on this strategy and even Iam a big fan of this strategy.

I have tried to figure out some common things in all my losing trades. As per my observation, in most of my losing trades, I see a good trend and movement in price before 7am GMT. Normally, for any breakout, we like the price to confine to a smaller range before a breakout. Sometimes I observe the price starting to have a trend before 7am GMT. But we need to wait till 7am GMT as per our strategy and then look for a breakout. As the movement has already begun by that time, the further breakout is not that strong causing the price to revert before we get our 20pips.

I feel, we need to figure out some criteria for getting into the trade at 12:30 or earlier whenever required.

Looking for Edward's comments.

Thanks,
slngupta.

I meant 7am GMT in my earlier post in the last line.
"I feel, we need to figure out some criteria for getting into the trade at 12:30 or earlier whenever required.". 12:30 pm is my local time

Hi sandra,

You are correct about your analysis,if there is a trend and strong price movement before 7am Gmt,the breakout is in most cases poor,i guess what we need do now is to find a way of identifying this trend before the breakout,this will only add as a caution before trades are made,on the otherhand what i am 80% sure of is that with a smaller price range before the breakout,its in most cases a Winner.Pls edward your comments..And thanks sandra....

Hi everyone,
Thank you for constructive comments and analysis of the problem.
I looked at it again today and what can be done..
Well, to be honest, I have no quick fix... and I don't want to add indicators here.

On the first look, I think what we can try is focusing on Pivot point levels and how far they are from our entry point. If a nearby pivot is less than 20 pips away, there is a good reason to skip a trade, because price may turn at that level; or if it is, for example, 18 pips away, to adjust our profit goal to that number.

Anyway, these are just speculations, I'll run some further tests, including suggestions you gave to see how we can improve the winning rate.
Your further comments and notes are also welcome.

Regards,
Edward

Hi

Slngupta, demmybanksfx ... I appreciate very much your response and input. Have tried various adjustments to anticipate breakouts, should they happen earlier then expected by the strategy. While this can be done, to some degree of success, what I'm after is something that preserves the core strength and beauty of this simple strategy. Example - can we identify why things go our of whack (some condition that happens in the Market), timing, or is it simply cyclical. When it comes to modifying the/any strategy, things can get so far from the original sometimes.

I'm looking to understand why the Simple Breakout Strategy doesnt perform. I'd like to identify and respect those conditions, and simply not use the strategy during those times.

Edward, thank you for the point made on using Pivots as a guide. It will surely help steer us away from trades that turn too quickly. Its a very valuable counter measure that can keep us in the game.

Many Thanks Everyone,

Sandra

Hi Edward-

When entering a trade just before a news release , is it best to place 2 limit orders , one to buy and the other to sell, in order to enter a trade in whatever direction the market goes ?

Fraser

Hi Fraser,

Good point.
As long as risks are evaluated, with high impact news coming traders may look for trading immediate breakouts on both sides.

Regards,
Edward

Great!

Very Good, I like it, hope you can improve it.

Thnx
dynaseo
http://www.dynaseo.com