Forex trading strategy #7 (Simple breakout System)

I think we are talking about this one:
http://forex-strategies-revealed.com/advanced/trendlines-breakout

Regards,
Edward

Hi Edward,
Nice work you have done and thank you for sharing with all of us.
Edward, could you please tell me the link or blog where the system that trades the break out after the close at mithnight with five candles whe you draw a trendline from the previus days hith and anather one from the previus days lows to the new highs and low of the new seccion (after mithnight) on this system you also use pivot points as targets and you place the stop lost on the high/low of the candle where the price breaks out.
I was reading and found it very instrested but somethin hapened to my computer and now am not able to find the discucion about the system.
I really apreciate your help and i thank you one more time for the work you are sharing with us. This is my emai address so that you can send the lind if you can. peixeblue[at]hotmail.com

Thank you Salem,

Your idea of separate entry rules for wide and narrow tunnels sounds good.
I wouldn't bet against it, I also remember traders suggesting a similar approach of an immediate entry instead of waiting for a full candlestick. So, it is down to testing and choosing a preferred entry method.

To User:
Whether the range is narrow or wide depends not only on the amount of pips, but also on the currency pair you trade as well as current and preceding volatility, so it is rather a relative factor. You would also count your risk/reward ratio each time you enter, and these factors will vary as well.

Having said all this, I think traders can pick few pairs and calculate safe and wide tunnel ranges for themselves. I saw here traders mentioning 40 pips for GBPUSD as a wide range and below 30 as a narrow range.

In my trading I combine all factors mentioned above and still use a visual reference.

Best regards,
Edward

Salem,

How do you put a number on what is narrow and what is wide?

Hi Edward,

I have gone through all the comments from all participants. I have to say that this forum is one of the best I have ever seen.

I strongly believe that what makes this strategy popular is its simplicity. So, I suggest keeping it simple as much as we can.

Looking at historical data, in case of strong price movement prior to our trading time, I think it is good idea to get into the trade once the price closes outside the tunnel on 5min chart and not wait until complete candle close outside of the tunnel. This way we get our 20 pips more easily. This suggestion has already been pointed out by one of the respected participants.

Otherwise, if the tunnel is narrow, prior to our trading time (opening of London market) then we just simply apply the system exactly as originally explained.

Your valuable feedback on the above is highly appreciated.

Regards,
Salem

Hi

I red all posts and I didn`t see any equity curve of the system?

Can anyone, who have used this system provide such a data?

Thank you in advance

Sincerely,
Hristo

Aggressive breakouts might be difficult to capture with regular market orders. Either way, if you expect an aggressive breakout, you may switch to 1 min chart where allow at least 2 candles to close above the breakout tunnel before attempting to enter a trade.

Best regards,
Edward

Hi Edward

Thank you for all this support its very helpful, ive got a quick question, what do we do if the break out candle is aggresive should we enter quicker or obide by the closed candle rule in any cirmumstance

Hi Jason,

There is no particular time we should avoid here, just probably only before and after major holidays.

Regarding indicators, I remember there were some suggestions on page 2 of this discussion (referred to Bollinger bands). Also consider adding Pivot lines and 200 EMA - both will suggest the levels of support/resistance, so that, for example, if you get a Buy signal right under the resistance level, you know that you should hold on till you see that resistance being breached, otherwise, upon Long entry into resistance area, the chances are high that the market quickly turns against you.

Best regards,
Edward

Hi Edward,

Another quick question, are there anytime that we should avoid using this strategy? and are there any indications that can identify a potential false signal?

Thank you
Jason

Hi edward,

thanks for you help, i have a very good overall success rate but i lost a trade today due to a false breakout, what do you recommend i do in such circumstances? do i re-enter on the next breakout or leave it for tomorrow?

Thanks for all your help
much appreciated
Jason

Hi Jason,

To simplify it, we are taking 5 min chart, where we're looking at the time range from 6 am GMT to 7 am GMT.
On hourly charts it'll correspond to 6 am GMT candlestick.

If you have differences between real GMT time and what trading platform shows you, it is because your trading platform runs in a different time zone (which is preset and cannot be changed). You need to figure out what time zone it runs on and then adjust hour count to GMT timing.

Regards,
Edward

you are jesus of forex to deliver us from loosing all the time

hi edward

just wondering, if the candle we are looking at should be from 6am GMT to 7am GMT which hour candle do we focus on? the candle that opens at 5am or 6am? For example the current live candle i am looking at says 7am but real time is about to turn to 9am i dont understand that why the candle is an hour behind real time please help

thank you

Jason

Hi Andrew,

Could be tried, why not. When GBPUSD moves, other pairs don't pause obviously, they also on the move. It is just that we used to treat GBPUSD as a breakout pair more than any other: it has a low spread and a high daily range.

Regards,
Edward