Scalping system #2 (Morning breakouts)

I have a rather serious dilema..I have this bracket script/EA and it is supposed to take advantage of the News releases and session breakouts..just open the script/EA in any chart of your choosing and set it supposedly 6 or 8pips above and below the current price and wait until the news or breakout occurs. THis is an excellent EA to take advantage of quick pips my problem is the parameter settings its a Bracket script from forextoolshed.. customer service not very helpful but the script is still powerful and im sure it can do some real good on the forex. I really deperately need help in figuring out what paramerters would be best. Anybodys help is absolutely welcome PLease...send some helpful values if anyone knows what im talking about could really use your help thank you so much and also if it is allowed anybody can reach me on drice7@gmail dot com once again thanks guys

If anyone would like to share his thoughts / experience with mine sent me a mail dbanasch[at]gmail.com

Hi Edward, thanks for the tip, i will give it ago . Fred

I m from india, but 8 EST I m much confuse. :(

Can you please tell us the equivalent of 8.00AM.EST in GMT?

i just notice this system work on every hour as well, not only at 7-8 EST, what a great system, but i will do more check/backtest . thanks Edward.

regards, tony

insert comment before you post

did anyone have any look with this? i am thinking of using the method

Hi Adam,

not many traders have a feel of the market; although all it takes is observation and a calm calculated investor's attitude. If you have the skill, you should definitely use it (so that when traders are trying catch any breakout, you'll be seeing & choosing your trading direction).

GBPUSD is more volatile, thus for many is a preferred choice for a breakout trading.

Kind regards,
Edward

hi edward just wondering if a better way to enter a morning breakout would be rather to just buy or sell at the appropriate time when you feel a breakout is imminent rather than just messing around and setting up oco orders. For example if i look at the closing candle of 7 and wait for the value to go +5 or -5 points above or below the closing of the 7 candle just simply enter the trade and hopefully the trend should continue? By the way the gbp/usd looks like a better option to trade breakouts?? thanks adam

Hi Dave,

Setting two opposite orders Buy and Sell on one currency pair is known as "hedging".
It's a normal thing, although US brokers doesn't allow it anymore.

3 pips spread is added to the Profit target, because as soon as you buy/sell 3 pips will be subtracted from your account. If you aim for 5 pips without adding the spread cost (3 pips), your profit in the end will be only 2 pips, instead of 5.

Kind regards,
Edward

Edward, this is dave in virginia ...first, thanks for getting back to me..on the post..3 back....and i think you must have alot of patience...with all the questions from us new guys here.....ok...i really want to develop this method and so yes...i will experiment with different numbers..for a long time ...2 things
1-i thought when you place the initial entry orders...you set 2..one long..and one short...just as you outlined in the post to anthony...just before this one....so.now i am confused..because in the reply to my post...you said it was hedging???...and not a normal thing done??? where am i not getting it??
and 2)...when calculating the order entry point...in the beginning posts...
people said like 3 pips plus spread.etc......and now..i understand that when i profit...the broker will take his "spread" pips..off of my winnings....but i am curious....why would the number of pips of spread to the broker...be a factor when i am setting a entry point for the setup??...whats the corelation??
hey thanks man...dave in virginia

Hi Anthony,

1. Find High and Low of the 7 am candle.
2. at 8 am you place 2 orders:
- Buy stop - a pending entry order to Buy the currency. Placed above the Highest high.
- Sell stop - a pending entry order to Sell the currency. Placed below the Lowest low.
3. Next you're looking for either one of the entry orders to be triggered, once you're in a trade, the second pending order should be canceled.

Stop loss orders are placed separately for each entry.

Best regards,
Edward

hello Edward

I am new to the forex world. I have started to understand the basics and came across your site and this post.
the only time frame I can work within is 7am til 8.30. your morning break outs seems to be a great system. perfect for someone in my position to work on.

I have read the whole post, and still unable to really understand it fully.
here is a summary:

1.add trend line at 7am candle, let's say for GBP/USD
2. at 8am put in an order 10 stop loss/stop buy
3. WHAT AM I LOOKING TO DO NEXT - buy or sell order???

I hope you can enlighten me a little further I would really appreciate it
thanks

Anthony x10

Hi Dave,

with experience you'll learn that for many indicators and breakout systems there is no absolute winning settings or the best profit/stop number in pips. That's because in certain conditions setup #1 would win, in other conditions - setup#2 would do better. And in Forex we have a variety of those conditions to deal with.
So, what I want to say is that adding +1 or +3 pips would not make a lot of difference. The market will dictate the outcome every time.

1) add 3 pips + spread. (The initial strategy rules were written with EURUSD in mind (the most common trading pair), and during the time of writing the spread for EURUSD was 2 pips on average, hence you have 5 pips total (3 pips + 2 pips spread).

2) There are debates about stops. On one hand, money management rules suggest that stops should be smaller than profit objectives,or at least equal if your performance is over 50% positive. Other traders recommend wider stops (20 pips or so) to avoid frequent stop outs. Since we're hoping to jump in and out fairly quickly in the morning, I suggested to place stops a bit wider (10-20 pips), so that you allow the market to "stretch" and don't let it stop you too early. You'll need to trade it for a few weeks to learn how the market reacts at 8am, so that you can balance your stops accordingly. Again, not setups are perfect, and no setups will give you 100% or profitable trades.

3) If you do it as: 5 pips profit, 5 pips stop, then yes: if you get stopped out in one direction, you can immediately open a trade in an opposite direction and look to recover those 5 pips.

4) To be able to set Buy and Sell orders on one currency pair simultaneously, you'll need to find a broker who allows hedging. With hedging you can make profits in both directions, but it's more complex strategy when you start implementing it. Hedging requires good experience to keep trades out of trouble.

Best regards,
Edward