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

The historical data is from Metatrader.

Sorry, you're right it did lose 5 times in a row, must have missed that due to the trade that never kicked in inbetween, apologies.

well i was able to upload a picture of the indicator

and the indicator ant-GU_Breakout.ex4 this helps visually backtest in mt4

Hi Rich,

I think you have a good strategy. However, you said that you only had one losing month but according to your excel spreadsheet, there are three months that lost. Having said that, I still think you have a winner especially since your losing months were fairly small and your winning months were larger. I like the ratio. I'll try it out on my demo. Thanks.

Dennis

can anyone backtest the original strategy for the year 2007-2008 we need atleast 2 years performance before we trade live

My metatrader doesn't go back further than Mar 08, otherwise I would have gone back a few years.

Rich

Hi Rich, I like your idea of the evening/midnight set up and walk away system. One thing I've noticed with the GBP/USD is that if you form a resistance line by joining the highs of the candles for the period 7pm - midnight and a support line by joining the lows of the same candles, then the resistance and support lines often converge towards midnight. Then if you place your buy and sell orders 5 points outside the support and resistance lines when the converging lines are anything from about 20-50 points apart then when a breakout occurs you should easily and quickly reach your profit target and your stop will be outside the converging trading range.
The important thing here is to make your entry level just above the resistance line and your stop just below the support line (for a buy order). Adjust yout profit target to be the same as or greater than your stop level.
Hope this doesn't sound too complicated. I've only backtested it so far but it gives high strike rate.

Regards
Chas

Hi Chas,

I tried testing with a 5 point breakout of the high and the low of the 4 hours leading up to midnight but it was less favourable than the 50 point strategy or the breakout of the full days highs and lows.

I'll have a look into the support and resistance lines you mention and back test that also.

Rich

Rich could you test one more strategy with your metatrader program.

For the same pair buy the highest high + 5 pips or sell the lowest low - 5 pips of the time period 7am to 9am EST ie one hour before us open to one hour after us open.

I think this will be more profitable than the mid night breakout and may have a higher average number of pips per month.