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Forex trading strategy #18 (20 pips with GBPUSD after midnight)

Submitted by Rich

I've just started trading a strategy which is based on the close of the first 15 minute bar after midnight GMT on GBPUSD.

1.) Take the closing price of the first 15 minute bar after midnight GMT on GBPUSD

2.) Place a buy order 50 points above the close and a sell order 50 points below the close

3.) Both orders should be placed with a 20 point stop loss and a 20 point limit order to take profits

4.) Once 1 trade is triggered, cancel the other.

This has averaged 74 points per month since April 08 which doesn't sound much, but given the short stop distance you can afford to place large trade sizes. I trade with £10k capital and am placing £12.50 per pip or 2.5% per trade. Based on last years results that's almost a 10% monthly return.

I have tested this with 20, 30 and 40 point targets, the 20 point target won 960 points over 13 months, the 30 point target won 780 and the 40 point target won 960. I prefer to stick with 20 as a safe option.

I admit that it did have 1 loosing month last year but providing you persevere it's a winner in the long term.

Here's the results spreadsheet for the last year:

Midnight Trade.xls

Rich



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


Great Strategies ...

Regards;

Manus168

Hi Rich

great strategy? Any particular reason you've chosen 00:15? why not say 00:00GMT or 06:00 GMT or any other starting point?

thanks

Hi, No particular reason to be honest, I'm sure you'd get pretty similar results choosing the midnight close, with a 2 point target and a 20 point stop you're on a 50/50 once it kicks in but you've got momentum on your side following the usual inactivity leading up to midnight GMT.

I'm currently going through a similar set of results which looks at a 5 point break of the previous days highs and lows, again looking for 20 points with a 20 point stop. I've gone through 5 months so far and it's averaging 100 points. It seems more solid as it's only lost 3 times in a row twice, compared to 6 times in a row on the above strategy. The N/A are where it's either not kicked in the following day or the market has gapped over the weekend on metatrader.

Results as follows:

Date High Low Range Entry W/L Stop
01/04/2008 19979 19811 168 Short 1 20
02/04/2008 19874 19728 146 Long 1 20
03/04/2008 19898 19747 151 Long 2 -20
04/04/2008 19975 19758 217 Long 1 20
07/04/2008 20048 19907 141 Short 1 20
08/04/2008 19940 19832 108 Short 1 20
09/04/2008 19927 19663 264 Short 2 -20
10/04/2008 19791 19650 141 Long 1 20
11/04/2008 19842 19704 138 Short 2 -20
14/04/2008 19767 19682 85 N/A
15/04/2008 19894 19656 238 Short 1 20
16/04/2008 19756 19598 158 Long 1 20
17/04/2008 19804 19599 205 Long 2 -20
18/04/2008 19923 19689 234 Long 1 20
21/04/2008 19998 19881 117 Long 1 20
22/04/2008 20026 19775 251 Short 1 20
23/04/2008 19997 19744 253 N/A
24/04/2008 19972 19772 200 Short 1 20
25/04/2008 19815 19684 131 Short 2 -20
28/04/2008 19890 19675 215 Long 2 -20
29/04/2008 19965 19781 184 Short 1 20
30/04/2008 19913 19663 250 Short 2 -20
Total 120
01/05/2008 19894 19622 272 Long 2 -20
02/05/2008 19907 19710 197 Short 2 -20
05/05/2008 19896 19703 193 Short 1 20
06/05/2008 19783 19654 129 Short 2 -20
07/05/2008 19772 19634 138 Short 1 20
08/05/2008 19712 19501 211 N/A
09/05/2008 19620 19502 118 Short 2 -20
12/05/2008 19568 19458 110 Short 2 -20
13/05/2008 19634 19441 193 Short 2 -20
14/05/2008 19502 19418 84 Short 1 20
15/05/2008 19473 19362 111 Long 2 -20
16/05/2008 19500 19402 98 Long 2 -20
19/05/2008 19598 19441 157 Long 1 20
20/05/2008 19622 19452 170 Long 1 20
21/05/2008 19718 19479 239 Long 2 -20
22/05/2008 19736 19611 125 Long 2 -20
23/05/2008 19849 19685 164 Long 2 -20
26/05/2008 19852 19753 99 N/A -20
27/05/2008 19830 19756 74 Long 2 -20
28/05/2008 19845 19715 130 Short 2 -20
29/05/2008 19825 19704 121 Short 1 20
30/05/2008 19817 19670 147 N/A
Total -160
02/06/2008 19822 19684 138 Short 1 20
03/06/2008 19771 19595 176 N/A
04/06/2008 19742 19603 139 Short 1 20
05/06/2008 19638 19525 113 Short 1 20
06/06/2008 19596 19460 136 Long 2 -20
09/06/2008 19734 19534 200 Long 1 20
10/06/2008 19800 19671 129 Short 1 20
11/06/2008 19753 19517 236 Short 1 20
12/06/2008 19666 19489 177 Short 1 20
13/06/2008 19645 19432 213 Short 2 -20
16/06/2008 19512 19407 105 Long 1 20
17/06/2008 19687 19464 223 Long 2 -20
18/06/2008 19697 19468 229 N/A
19/06/2008 19609 19476 133 Long 2 -20
20/06/2008 19744 19578 166 Long 1 20
23/06/2008 19791 19697 94 Short 1 20
24/06/2008 19756 19585 171 N/A
25/06/2008 19723 19624 99 Long 2 -20
26/06/2008 19769 19655 114 Long 1 20
27/06/2008 19894 19713 181 Long 2 -20
30/06/2008 19952 19802 150 Long 2 -20
Total 80
01/07/2008 19966 19878 88 Long 1 20
02/07/2008 20006 19889 117 Short 1 20
03/07/2008 19973 19843 130 Short 2 -20
04/07/2008 19937 19798 139 Short 2 -20
07/07/2008 19846 19792 54 Short 1 20
08/07/2008 19827 19647 180 N/A
09/07/2008 19797 19664 133 Long 1 20
10/07/2008 19837 19670 167 N/A
11/07/2008 19835 19713 122 Long 1 20
14/07/2008 19958 19752 206 Long 1 20
15/07/2008 19962 19813 149 Long 1 20
16/07/2008 20158 19930 228 N/A
17/07/2008 20095 19958 137 Short 2 -20
18/07/2008 20071 19947 124 Short 2 -20
21/07/2008 19995 19904 91 Long 1 20
22/07/2008 20036 19905 131 Long 2 -20
23/07/2008 20074 19895 179 N/A
24/07/2008 20027 19901 126 Short 1 20
25/07/2008 19989 19815 174 N/A
28/07/2008 19977 19829 148 N/A
29/07/2008 19962 19840 122 Short 1 20
30/07/2008 19965 19759 206 Short 2 -20
31/07/2008 19843 19744 99 Long 1 20
Total 100
01/08/2008 19927 19779 148 Short 1 20
04/08/2008 19840 19726 114 Short 1 20
05/08/2008 19756 19598 158 Short 1 20
06/08/2008 19624 19519 105 Short 1 20
07/08/2008 19595 19466 129 Short 1 20
08/08/2008 19537 19419 118 Short 1 20
11/08/2008 19437 19144 293 N/A
12/08/2008 19255 19064 191 Short 2 -20
13/08/2008 19120 18950 170 Short 1 20
14/08/2008 19036 18637 399 Short 2 -20
15/08/2008 18787 18618 169 Short 1 20
18/08/2008 18683 18510 173 Long 1 20
19/08/2008 18722 18618 104 Short 2 -20
20/08/2008 18680 18538 142 N/A
21/08/2008 18672 18539 133 Long 1 20
22/08/2008 18793 18606 187 Short 1 20
25/08/2008 18780 18503 277 Short 1 20
26/08/2008 18589 18405 184 Short 1 20
27/08/2008 18531 18328 203 Short 1 20
28/08/2008 18487 18283 204 Short 1 20
29/08/2008 18401 18238 163 Short 1 20
Total 260
01/09/2008 0 N/A
02/09/2008 18127 17848 279 Short 1 20
03/09/2008 17938 17781 157 Short 1 20
04/09/2008 17840 17665 175 Long 2 -20
05/09/2008 17859 17552 307 Short 2 -20
08/09/2008 N/A
09/09/2008 17974 17469 505 N/A
10/09/2008 17705 17505 200 Short 1 20
11/09/2008 17676 17473 203 Short 2 -20
12/09/2008 17609 17445 164 Long 1 20
15/09/2008 18129 17763 366 N/A
16/09/2008 18129 17763 366 Short 1 20
17/09/2008 17996 17730 266 Long 1 20
18/09/2008 18245 17785 460 Long 2 -20
19/09/2008 18276 18089 187 Short 1 20
22/09/2008 18386 17913 473 Long 1 20
23/09/2008 N/A
24/09/2008 18635 18469 166 Short 2 -20
25/09/2008 18605 18457 148 Long 1 20
26/09/2008 N/A
29/09/2008 N/A
30/09/2008 18341 17957 384 Short 1 20
Total 100

Rich

past results are not indicative of the future, All you know is that this system was a winner. Its performance from this date forward is completely unknown

Hi,
Looks cool as a strategy.
i have a question : i opened the .xls file but i didn't understand the numbers 20 /30 /40 and the "1" and "L"
Could you explain it to use please ?

thanks,

thanks for the reply Rich, and your new strategy looks great too ! Is it possible for you to upload the xls file for this as well.

thanks again rich !

to the user who asked about the numbers 20/30/40 ... rich tried it out with different stop losses and included the result. also "1" means a winning trade and "L" a losing trade.

thanks for your effort rich, much appreciated! your new strategy of the high and low would it be possible for you to define it more clearly please?

if you need any help with backtesting any months please let me know although i dont know programming i can do it manually and would be happy to help :)

The 20, 30 and 40 relate to the limit orders for profit taking, stop always stays at 20 points.

You are correct regarding the 1 meaning win and the L meaning lose, I wanted to use W for Win but the 'IF' function in excel didn't like it in the formula.

Obviously past results don't guarantee future performance but looking a years results where the market has been pretty static in some months and in huge trends in others gives a good diversification to test the strategy.

I've like to try and add additional rules to get the win ratio up, but so far moving averages and general trend don't seem to have any baring on results.

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