Actually your take profit is not triggered until the price has been hit and reached a further few pips - the spread,so you don'y exactly "see" the commission eaten away by your broker but ofc it is there.
I am preparing some data for you.
Breakout - 15 Minutes a day - 10-20 pips - Every day - 95% profitable trades
Actually your take profit is not triggered until the price has been hit and reached a further few pips - the spread,so you don'y exactly "see" the commission eaten away by your broker but ofc it is there.
I am preparing some data for you.
EUR/USD 5 TP - 10 SL
13/7/2009: 5 pip profit
14/7/2009: -10 pip loss
15/7/2009: 5 pip profit
16/7/2009: 5 pip profit
17/7/2009: no profit - within previous day range
19/7/2009: 5 pip profit
21/7/2009: 5 pip profit
22/7/2009: 5 pip profit
23/7/2009: 5 pip profit
Total P/L: 25 pips
AUD/USD 5 TP - 15 SL
13/7/2009: 5 pips profit
14/7/2009: 5 pips profit
15/7/2009: 5 pip profit
16/7/2009: 5 pip profit
17/7/2009: within range no profit
19/7/2009: 5 pip profit
20/7/2009: 5 pip profit
21/7/2009: 5 pip profit
22/7/2009 -15 pip loss
23/7/2009: 5 pip gain
Total P/L : 25 pips
USD/JPY 5 TP - 15 SL
13/7/2009: 15 pips loss
14/7/2009: 5 pip profit
15/7/2009: 5 pip profit
16/7/2009: within range no profit
17/7/2009: 5 pip profit
19/7/2009: 5 pip profit
20/7/2009: 5 pip profit
21/7/2009: 5 pip profit
22/7/2009: 5 pip profit
23/7/2009: 5 pip profit
Total P/L: 25 pips
GBP/USD 5 TP - 15 SL
13/7/2009: 5 pip profit
14/7/2009: 5 pip profit
15/7/2009: 5 pip profit
16/7/2009: 5 pip profit
17/7/2009: 5 pip profit
19/7/2009: range
20/7/2009: 5 pip profit
21/7/2009: range
22/7/2009: 5 pip profit
23/7/2009: 5 pip profit
Total P/L: 40 pips
Total P/L for all currency pairs: 115 pips
Some of the losses occured at major support/resistance points and although I would have filtered them when trading my own account,I have included them in the previous P/L calculations.
The data provider is FXCM and the bactesting was manual on their chart.
13/7/2009: 5 pip profit
14/7/2009: -10 pip loss
15/7/2009: 5 pip profit
16/7/2009: 5 pip profit
17/7/2009: no profit - within previous day range
19/7/2009: 5 pip profit
21/7/2009: 5 pip profit
22/7/2009: 5 pip profit
23/7/2009: 5 pip profit
Total P/L: 25 pips
AUD/USD 5 TP - 15 SL
13/7/2009: 5 pips profit
14/7/2009: 5 pips profit
15/7/2009: 5 pip profit
16/7/2009: 5 pip profit
17/7/2009: within range no profit
19/7/2009: 5 pip profit
20/7/2009: 5 pip profit
21/7/2009: 5 pip profit
22/7/2009 -15 pip loss
23/7/2009: 5 pip gain
Total P/L : 25 pips
USD/JPY 5 TP - 15 SL
13/7/2009: 15 pips loss
14/7/2009: 5 pip profit
15/7/2009: 5 pip profit
16/7/2009: within range no profit
17/7/2009: 5 pip profit
19/7/2009: 5 pip profit
20/7/2009: 5 pip profit
21/7/2009: 5 pip profit
22/7/2009: 5 pip profit
23/7/2009: 5 pip profit
Total P/L: 25 pips
GBP/USD 5 TP - 15 SL
13/7/2009: 5 pip profit
14/7/2009: 5 pip profit
15/7/2009: 5 pip profit
16/7/2009: 5 pip profit
17/7/2009: 5 pip profit
19/7/2009: range
20/7/2009: 5 pip profit
21/7/2009: range
22/7/2009: 5 pip profit
23/7/2009: 5 pip profit
Total P/L: 40 pips
Total P/L for all currency pairs: 115 pips
Some of the losses occured at major support/resistance points and although I would have filtered them when trading my own account,I have included them in the previous P/L calculations.
The data provider is FXCM and the bactesting was manual on their chart.
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All very interesting! A simple strategy coupled with the use of discretion and a good psychology is a winning formula.
You definately have my interest and thank you for sharing what you've learnt. How long have you used this strategy during Live trading?
It would be a very good idea to code an EA, even if it doesn't use discretion. TP=5 and SL=10 this means that anything above a 75% win rate will create a profit. So even 86% will be an extremely welcoming ratio if it can be done automatically. You do not have the luxury of using discretion though.
I am going to start using this strategy live as soon as next week maybe. I am talking about using only 0.01 which means I can lose about 20 trades in a row and it would just about give me a drawdown of 0.5%. If it works I will steadily up the lot sizes until I feel comfortable with it.
One more question: If you are making as much money as you say you are, why don't you use a spread betting account which is tax free? You can still use MT4 for their free charting. IG even have 1 pip spreads and you won't face overnight charges because they trade isn't open for very long.
You definately have my interest and thank you for sharing what you've learnt. How long have you used this strategy during Live trading?
It would be a very good idea to code an EA, even if it doesn't use discretion. TP=5 and SL=10 this means that anything above a 75% win rate will create a profit. So even 86% will be an extremely welcoming ratio if it can be done automatically. You do not have the luxury of using discretion though.
I am going to start using this strategy live as soon as next week maybe. I am talking about using only 0.01 which means I can lose about 20 trades in a row and it would just about give me a drawdown of 0.5%. If it works I will steadily up the lot sizes until I feel comfortable with it.
One more question: If you are making as much money as you say you are, why don't you use a spread betting account which is tax free? You can still use MT4 for their free charting. IG even have 1 pip spreads and you won't face overnight charges because they trade isn't open for very long.
Can you test this system using 10 pips for a profit?
This would give you a much more favorable r/r ratio and may make the system more profitable.
-Take Whichever Way Works-
Bruce Lee
Jeet Kon Do
No probs, I'll try and test this system when I get the chance but using small candles (like 5 or 10 minute data) will take some time. I'm also going to paste up a properly tested long term trend following Forex system that I'm working on in the next 5 days or so once my website is up.
barneydunn
Active member
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What happens on the weekends? My broker doesn't give a sunday night candle, do I use fridays candle?
Somebody mentioned IG Index too, they have a minimum sl of 15 pips on most forex pairs.
Somebody mentioned IG Index too, they have a minimum sl of 15 pips on most forex pairs.
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the risk to reward ratio means nothing when each trade you take has a negative expectancy.
You could perhaps modify the strategy with a 1:1 risk to reward -both at 10 or 15 pips and maybe due to the breakout have odds that are better than 50% to justify such a move.
Someone needs to do some serious back testing with a 1:1 and enlighten us,perhaps its more profitable
Douglas_Fx
Newbie
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Has anyone tried to automate this strategy?
Yes,there is an EA available somewhere for a similar strategy that can be adopted in 2 mins to work as I've described.
This strategy is for lazy people but EA - that's just too lazy for reasons ive commented on before,it takes some discretion when it comes to major points of support and resistance,things that an EA can only partially take into account.
always the high/low of the previous day,so that includes the day that closed within the range of the previous day.
shadowninja
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My concern is that the EA doesn't take into account that even in a 5 minute bull candle it could retrace well through the stop before achieving the target pips.
The only way to test such a system is by forward testing.
GladiatorX
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Have you got proof that you trade this live? i think your lieing by the fact you only have $8,000 and claim to trade 50 lots -
I just don't know your motives...
I just don't know your motives...
Unfortunately, you can not back test this using daily data.
It doesn't tell you if you would have been stopped out before your profit target was hit.
You need 1 or 5 minute data to backtest this.
Therefore, the 90% win rate is actually much less because many times you will get stopped out first.
With a r/r of 1:2 it might not even be profitable going forward.
The only way to test this is going forward.
Garbanzo, have you tested this in real time?
If so, what are your results?
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If you bothered to check to check the entire thread you'd see forward tested data.
50 lots is on a demo account,I don't have the capital for that sort of thing - yet.
I am maxed out on my 8k (and growing) though,7 lots usually in total spread over 4-5 pairs
as for me being a liar,I want your billions of dollars trading this strategy to move those currency pairs just enough to hit my 5 pip take profit and ill simply jump out at 4 pips.
I've modified this system slightly for testing and thought I'd share and post the results. If yesterday closed higher than the day before I'm only taking long trades. Vice versa for shorts. I'm testing using the GBP/USD.
The fields in the testing results are TheDate, Open, High, Low, Close, the Direction we're taking trades in, the Entry Target, the Stop Loss At, the Entry Time, the the target was hit, the time the stop loss was hit, a win flag and a loss flag.
When it breaks out by 3 pips I enter targeting 9 pips profit and have a stop loss of 24 pips.
In my test data there were 110 wins to 39 losses, but that's assuming that where the same five minute candles both hits the stop loss and the target we win.
I agree, forward testing is needed, but we need more data as the test data shows wins can continue for very long streaks. Please keep us posted Garbanzo.
The fields in the testing results are TheDate, Open, High, Low, Close, the Direction we're taking trades in, the Entry Target, the Stop Loss At, the Entry Time, the the target was hit, the time the stop loss was hit, a win flag and a loss flag.
When it breaks out by 3 pips I enter targeting 9 pips profit and have a stop loss of 24 pips.
In my test data there were 110 wins to 39 losses, but that's assuming that where the same five minute candles both hits the stop loss and the target we win.
I agree, forward testing is needed, but we need more data as the test data shows wins can continue for very long streaks. Please keep us posted Garbanzo.
That is an interesting new twist to the system by trying to filter the trend.
The issue with this approach is that you can get trendless situations on the daily bars too,have a look,even in trendless situations you can get closes both up and down compared to the previous day.
This is just my point of view and I don't have hard data to back it up but I do believe you are losing out allot of profitable trades by doing this.
The more you increase the take profit the more you are trying to piggy back on a short term trend rather than the price momentum from an actual breakout.
You could,for example,get about 98% success if you could set a 1 pip take profit - but your broke won't really like it and you'd need massive amounts of capital to make it worth it.
I believe you are better off with manual filtering rather than a knee jerk reaction to the previous day's close.
Could you perhaps post your excel/access file for the rest of us?
We could use it as a template.
I'd really appreciate that.
