Forex trading strategy #18 (20 pips with GBPUSD after midnight)
Submitted by User on May 8, 2009 - 11:01.
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
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Hi again Rich, just to add to my last comment.
Looking at 1 hour charts of the GBP/USD the converging support and resistance lines very often start quite early in the day, not just in the evening. Some good examples of converging S and R lines forming early on, but with break-outs late in the evening/midnight were on 28th April, 1st May and 5th May.
The great thing here is that you can use quite a tight stop of say 20 points (about 5 points wider than S and R lines gap at the time of the trade) and set your profit target to say 30-50 points, making the risk/reward ratio very favourable.
Hope this is of some use.
Regards
Chas
Hi,please can anyone explain how to use the back testing indicator' thanks
Hi Rich,
This strategy certainly looks good based on your past year results. I am still relatively new to fx and not sure whether I have fully understood the stop loss and target profit points.
This is how far I've understood it and please correct me if I'm wrong so that I will be off trading this strategy according to what you've posted.
If at 00:15 GMT the closing price of Gbp/Usd is 1.5124, then I would sell at 1.5074 (50 pips below 1.5124) and target profit at 1.5054 (20 pips below) and stop loss at 1.5094 (20 pips above) and vice versa for buy. Is that right?
If so, is it a good idea to change the 20 pips stop loss and target profit above and below 1.5074 to 50 pips instead? Because I find the chance of going up 20 pips in a sell trade can be easily reached and my trade automatically stopped out at a loss esp. for a volatile pair like Gbp/Usd.
Please advise. Thank you.
Tony
Hi
i am interested to know, what platform did you use for this startegy?
Regards
Ben
Here is a pdf about: MT4 Backtesting.pdf
and Alpari data center link mentioned in the document: http://www.alpari-idc.com/en/dc/databank.php
Good luck
Tanne
Hi Tony,
Your example is correct.
Regarding the 50 pips instead of 20 pips change: by rising the stop loss value, your reward:risk ratio becomes 1:1 instead of original 2:1
Regards,
Edward
Hi Ben,
I read that the platform is MT4, however the broker is not unknown to me.
Regards,
Edward
Hi Rich,
Thanks for posting this. Can you automatically cancel one trade when the other kicks in on IG Index? If so, how do you do this please?
Many thanks
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