Forex trading strategy #7 (Simple breakout System)

THANK YOU FOR IDEA
YOU CAN USE THE SAME WITH GBP/JPY AT 22:00 GMT .

I don't know, never tried.
If you test it, let us know about the results.
Thank you.

Regards,
Edward

I wonder if someone profit from this strategy... My broker time is GMT +1 and as said it will
be for me 07:00 - 08:00 at my broker time. Look at the pictures...Can anyone tell me please do am i doing something wrong ???

From the screen shot, you're doing everything right.
You said you have GMT+1 time, try trading according to GMT - London time.
I use GMT.

Frank G.

I think the strategy works well. Seems like you did everything right but sometimes the market does not cooperate. I'm thinking of trying taking the time from 11pm-12am PST as the range. Then wait for a candle to open and close completely outside of that range but using a different stop method. Using the boundary as a range works but sometimes you get stopped out too soon. I think if you use 10 pips above/below the most recent swing low/high, that may help in some of those situations when you get stopped out only to see if continue in your direction. I think this strategy is solid, if people post and chat here we may be able to fine tune it some more. I'm also thinking of using a take profit when a doji candle closes on the 5min chart.

Hi Edward,

Thanks so much for all these strategies. Very useful - especially for someone relatively new to forex trading such as myself.

I like the limited time frame of this system. It means I can manage trades before I go to work in the morning (I live in the UK so am on GMT).

My question relates to whether to enter a trade or not. Back-testing reveals that I would have had almost the same number of winning and losing trades over the past month on GBP/USD. Coupled with the fact that the limit and stop are the same, this doesn't seem to generate much profit. I'd love to trail stops but haven't really got time before I have to jump in the car.

Is there a good way of deciding when to stay out of a trade ? I was looking at the whole price range 0600 - 0700 (GMT) and perhaps thinking to stay out of a trade if this range was greater than 40 points (indicating high volatility). Is that fair ? Are there better, more established methods that you'd suggest ?

Thanks again.

Andrew

Hi Andrew,

Theoretically, you would be right if you opt for tighter ranges. A tight range as a rule produces a more active breakout and allow better conditions for stops.
However, I haven't practiced limiting my trades to tight ranges of 40 pips or less.

Here what I would try to do to filter out some trades:
Add 50 SMA to 5 min charts. Set a breakout entry only in the direction suggested by 50 SMA. E.g. if price trades above 50 SMA, set only Buy orders, if price trades below 50 SMA - only Short orders.
This way you will trade breakout with the trend only.

To get an even better filtering, add 50 SMA to 1 hour chart too.
Now your steps would be:
1. Is price above or below 50 SMA on hourly chart during the required range (1-2am EST)?
2. Is price above or below 50 SMA on 5 min chart during the required range (1-2am EST)?
3. If both are above 50 SMA or both are below 50 SMA, then you will take trades this day.
If, say, 5 min trades below and 1 hour trades above 50 SMA - no trading today.

Regards,
Edward

thank you
Edward for your Good work,

ignatius