Scalping system #2 (Morning breakouts)

Dear Edward,
I'm new here. I'm still did not understand the entry. The only I know it based on high and low 7am EST candle. But the entry is blur for me. Pls help me.

From,
Sam

Yes, it is high and low.

Hold up, are you sure it is the high and low or the open and close of the time frame?

Hi Keith,

Originally, we evaluate only one hour, which is 7-8am Eastern time (in summer would be EDT). There was another interpretation made by user - CJA - who saw it as trading on the breakout of morning range created by candles from midnight to 8am Eastern Time. That is optional.

Regards,
Edward

Edward,

something is a bit confusing. You say "If you want to join big traders your buy/sell orders must be above and below the price range created from midnight to 8:00am EST." But in the first part you say the previous candle, and then you further delineate what candle you are speaking of in the Q&A section, the hour candle of 7-8am EDT (not EST during "summer hours", correct?).

Are these two different setups? Or are we not really setting our limit orders based upon the London session, but rather just the last hour of it?

Just want to be clear for future readers of this setup, thanks again!

Keith

Hi Gibson what pair do you trade????

where is your back testing reports?

Great explanation Edward! I love scalping strategies alot. I made some EAs that use scalping strategy. Here you can see my latest scalping EA back testing reports (with 3 best optimized setting).

I plan to develop the OCO one.

Thanks for your times to share it here.

Regards,
admin[at]Viking234[dot]biz

Yes, ideally they should be OCO 'One Cancels Other'. But if the distance between two orders is too wide it may require selecting a closer stop.

Regards,
Edward.

Hi All

These two buy/sell orders need to be OCO isn't it?

Regards

i have had fairly good luck with this system over some months of use.

i only trade the 8 am est breakout with the euro and go for 7 pips. i use the highest high and lowest low of the prior three half-hour candles, plus 3 pips for entry, with a tp after 7 more pips. the prior three 30-minute candles are the 7:30, 7:00, and 6:30 est candles.

i believe the win rate is about 75%.

great work on this site - maybe the best site on the internet.
thanks!
gibson

Thank you for the update and useful notes. This should warn traders of being extra careful with this strategy and may be add some analysis to reinforce positive performance.

Great comment. Thank you!
Edward.

SL: 5
TP: 5
start date: 1-JAN-2007
end date: 17-SEP-2007
starting balance: $10,000

Total net profit: -$4000
Total Trades: 212
Total Profitable Trades: 66

This backtesting probably isn't 100% accurate but I believe it's fairly indicative of past performance.

Part of the problem is that the London market is known for stop hunting. Very often the Frankfurt open to London open range will be broken in one direction and then a retracement will occur to break out in the other direction. I have tried variations which wait for the first breakout and then place stop orders in the opposite direction. These have increased the strategy performance, but I am yet to see any variation which is actually profitable over any reasonable amount of time (6 months+).

It might be a useful strategy if a major news announcement is due within the upcoming New York market time. This might increase the chances of a true breakout.

You've done a good job. In fact, it is one of the most unpredictable strategies here, although, I haven't heard of a significantly bad results yet.

I would be interested to see the testing results you've got. Does they actually show that even with +5 pips target and 5 pips stop loss you've got a big negative balance?

Just drop another line and so everyone could take look at system's backtesting performance.

Thank you,
Edward.

I have backtested this on a tick by tick basis for the past 12 months (EURUSD and GBPUSD). Performance is dismal for both pairs (ie: net result is a significant loss). I have tried various combinations of stop loss / take profit. Anyone actually backtested this and found that it returns a positive result over any period???