Developing a system #17 (19 PIP Breakout)
Submitted by User on July 16, 2009 - 20:12.
Submitted by Daniel
This strategy is very similar/based on the numerous breakout strategies already on here. I target two trade times 08.00GMT and 13.00GMT. I look at the previous four hours of trading and find the low/high.
I then create one buy order 3 pips above the hight and one sell order 3 pips below the low. The order is an OCO order so only one trade can take place.
I set the stop at 10 pips and the target at 19 pips.
I have found in testing this that for 08.00GMT the best 2 pairs are AUD/USD and GBP/USD. For 13.00GMT GBP/USD and EUR/USD.
Back testing has shown a winning percentage of around 45-48%. Because the wins are more than the losses this seems to offer a healthy profit. I am demo trading this now but was interested to see and ideas you or other may have about this. One thing I can't put my finger on is why some months are better than others. I have tried to see if ADX, Volatility or Momentum indicators will further increase my winning % but have not been successful.
Thanks
Daniel
Edward Revy,
http://forex-strategies-revealed.com/
Copyright © Forex Strategies Revealed
Even though your win percentage is below 50%, it does not mean you can't be profitable. Some traders only win 20% of the time, still profit because of money management. So good luck!
Hi Denis,
Pivot point level is an option indeed. As for me, whenever possible, I prefer to make decision and get biased toward either direction before I trade instead of allowing the market to decide for me.
I think you can try the method for trading Gold.
Regards,
Edward
Hi Shane,
it's another good point, thank you!
Regards,
Edward
Edward,
As well as your 0.2 SAR bull/bear direction, we should NEVER open a trade that day if price is less than 25 pips away from 100 SMA--the market is usually too rangy in these conditions, and our pips are more difficult to claim.
Keep up your excellent work on the site. Kind regards. Shane
Hi Edward/Daniel,
maybe also possible to use the Pivot line to decide to go Long or Short??? For example if all candles until 8am are above the pivot line than only go long. For short all candles until 8am below pivot line.
another question: is it also possible to use this kind of breakout system to use for the Gold market? Do you know if this is possible?
thanks
Dènis
LET THE SAR DECIDE THE ONE BULL/ONE BEAR TRADE DIRECTION-GREAT IDEA EDWARD :))) I also avoid trading MONDAYS and FRIDAYS as there a NIGHTMARE for breakout systems! With these 2 ideas alone you'll have fewer more successful trades--remember the casino adage: the more you play, the more you pay! Likewise, OVERTRADING is also a painful and silent death :(((
Just hourly SAR for this strategy.
Regards,
Edward
I was just wondering would you run the sar across an hourly chart or even daily to see the longet term trend?
Thanks Edward, I will do a bit of back testing to see how this would have helped me.
Daniel
Hi Daniel,
Finally I'm here :)
For a good simple strategy like yours there is always one primary thing to do: instead of allowing the price to "choose" which of your orders to hit, you can try to make a choice yourself. What I mean is, you can choose a preferable breakout direction (up or down) beforehand, a direction where you're likely to get higher percentage of being right.
It may sound too simple, but Parabolic SAR with default settings (0.02, 0.2) might be on your side. Before 8:00 am GMT, for example, Parabolic SAR, as a rule, already establishes its trend preferences. So, the only thing you need to do is to follow it. For example, if SAR suggests an uptrend at the moment you set up your trades, then go with a Buy Stop order only and a Stop loss.
This simple approach should increase your winning ratio.
Regards,
Edward
no problem, I haven't had much experience with metatrader but write sql for a living so the results are derived from metatrader history data but analysed via sql.
19_Pip_Breakout.xls
thanks Daniel ! can u attach an excel sheet of your backtests?
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