Advanced system #4 (Early bird Breakout System)

Hi Raven,

You may test it with GBP/JPY and USD/JPY; although they are not exactly in very low correlation, they should respond quite well, besides they also have (especially GBP/JPY) high daily range average, which means even a small breakout should yield some good pips to collect.

Here you can always check on correlations for currency pairs for different periods of time:
http://fxtradeinfocenter.oanda.com/charts_data/fxcorrelations.shtml

Best regards and sorry for the delayed answer (had some work to finish)...
Edward.

i like this web site and both of the breakout system, im style demo trading but hope go live soon:)

Hi Edward,

I trade daily using this system on GBP/USD, and it works quite well. I want to diversify with another currency that has low correlation with GBP/USD. What currency would you recommend, and at what time should I set up this system?

Regards,
Raven

Hi Raven,

As fas as I know EUR/USD and GBP/USD are the most popular pairs to trade morning breakouts. Sure you can try it.

There are many different opinions about importance of fundamental analysis. To me, if you really know how do it right you would probably say it is paramount. However, fundamental approach to the currency market is not an easy task for many traders, therefore they don't recognize it as an effective method of studying the market. And there is nothing wrong with it. You can survive without fundamentals if you cannot use it, it is a fact.

As about indicators, they do help to see the market. But nobody says you cannot trade without them. In fact a lot of solid and well performing trading systems use no indicators at all.

Regards,
Edward.

Hi Edward,
I like this strategy because it seems very simple, involving no indicator and no fundamental analysis.
How important is the fundamental analysis and indicator to forex trading?
Can I depend on this strategy to trade EURUSD daily?

Thanks,

Raven

Hi Raven,
You have a very good question on which I don't have an answer ready...
I tried to keep this strategy light and used it as is. I can't really think of a quick solution. I'll think about it and post any good ideas later.
Do you have any suggestions?

Hi Edward,

Are there any conditions where we should not place any BUY STOP or SELL STOP?
For example, if the range between HIGH and LOW in the 5 candles exceed a certain number?
What are the things that we should check to avoid reaching a STOP LOSS?

Thanks,
Raven

Hi Frank,

Every broker should have this option. Make sure you select Buy Stop/Sell Stop Order instead of Market Buy/Market Sell Order.
If you don't find it ask your broker about those Orders.

Just in case your research does not bring any results, try, for example, Oanda broker. There at least you will get a clear picture of the times when you are going to enter immediately with a current price (Market Order) and when you are just setting a Buy Stop / Sell Stop Order and waiting for the price to meet the conditions.

Good luck!
Edward.

Hi Edward,

Which broker allows me to set buy order at a certain price (like +5 pips above the highest high)?
Because the platform I am using now can only accept buy order at current price?

Regards,

Frank

Yes, it is correct.
You are welcome.

just a quick question please.....GMT 7.00 AM JUNE 26 2007 IS 11.OO PM PACIFIC JUNE 25 2007..AM I CORRECT EDWARD? MANY THANKS...SO CONFUSED WITH PLUS AND MINUS 5 AND EST AND SO ON.
TOMMY

I agree that 8:00 am is an important time. However, traders may very often find the market starting to move much earlier. And that is where time after 5:00 am comes in place.

But, the fact that we analyze 5 morning candles will not necessarily result in immediate breakout at 5:00 am. The real move may as well occur exactly at 8:00 am during London and New York session overlap.

Happy trading!
Edward.

What is the significance of 5:00AM, shouldn't more weight be placed on 8:00AM when the market opens?

About the chart marks: triangle is an entry, X - exit.

I'm not sure what candle you meant...
If it is an entry candle - then the order there is an order which is set at 5 am and gets filled when the price makes it above or below the highlighted in green candle range with its highest high and lowest low.

If it is an exit candle - we suggest a time factor here, means we close all open orders at 1:00 pm EST.

Thank you,
Edward.

how did you identify the candle? What is the X mark on chart.

thanks