Best Thread GBP/USD Breakout

IG didn't fill me till 1.5958, but it got there in the end. Time to buy snow shoes!
 
Tenapenny said:
No, that does not breakout of the overnight range that the stratergy would use.
Click to expand...

I Understood that the strategy you used was 1am candle open, 6am candle close prices to determine buy/ sell signals. Are you actually looking at the high/ low during this period? What were your buy/ sell levels?
 
Leia said:
I first saw Claudia’s thread just before Christmas and was very sceptical as it didn’t contain any of the elements I understood to be essential to understanding the market and therefore learning how to trade it. I thought it necessary to be able to identify the trend; the minor and major support and resistance levels; the fib levels and fib extension levels; count the waves, see the moving average cross-overs etc etc etc. I also thought you had to ‘run your winners and cut your losers’. This strategy seemed to simply consist of a 1:1 risk reward strategy and relied purely on a better than 50% win rate to ever make a profit.

So it seemed like a route to financial suicide, but I was very intrigued with Claudia’s relaxed attitude and read the whole thread through. I then decided to actually watch this pair at 7am and placed demo trades from 17th December 2009 to date, when I could. I have recorded the results in the attached spreadsheet for any-one interested. As the results so far (only on demo trading) are a two in three (66.6%) win ratio I have decided to forward test with a tiny account at minimum stakes (£100 @ 50p a point) which gives me 10 live trades. I appreciate this isn’t a very significant sample size, but I can’t really afford to loose much more, if I get a few winners (recent history indicates that I will) then I hope to have a more significant sample size to analyse than 10 trades, but only time will tell. Apologies Claudia as this is really not ‘shoe shopping’ stakes, but I hope you don’t mind me posting on your thread.

Whilst Claudia has shared her rules a few times, I have some slightly more detailed ones, which I hope will mean I am never in the position of having to think or even worse make a decision at 7am, my trade orders will just be placed ‘on auto-pilot’ and I will sign off, record the results later on and analyse them a couple of times a month (if my account lasts that long)

Rules:
Times are GMT at present and will change to BST when daylight saving commences in March. In simple terms it’s always 7am UK time
1 Identify highest open or close of GBPUSD for all candles printed between midnight and 6am
2 Identify lowest open or close of GBPUSD for all candles printed between midnight and 6am
Open or close being the extreme of the ‘body’ of the candle
The 6am candle will still be printing at this time, so if it is marking one, or even both, of the extremes it will not be possible to place the trade until the 7am bar has begun to print
3 Place a ‘buy’ order at the high value with a stop loss at 20 pips and a take profit at 20 pips, time out at 9:30am (+2.5 hours)
4 Place a ‘sell’ order at the low value with a stop loss at 20 pips and a take profit at 20 pips, time out at 9:30am (+2.5 hours)
5 Record trade results (win, lose, not opened)
6 Analyse results every 10 opened trades & calculate win ratio (last 10, last month, so far this year)
If the 7am candle close creates the high or low for the range and therefore the order can not be placed, I will enter at the market price at 7am and set my take profit and stop levels as per the rules (ie +20 -20 from the close level, not my entry level), thus I might not get 20 points and I lose more than 20 points in these scenarios. I appreciate I could decide not to take a trade at all, or wait for the price to come back into the range and then set my order, but this is how I have decided to deal with this scenario for now
I will also allow both trades to open if they are triggered before the 9:30am cut off. This could mean I take two losses on one day, but I am interested in collecting as many trade results for this strategy as I can at this stage, so this will get me more results and if my subsequent analysis reveals that the second one to open is statistically more likely to be a loser I may revise this rule

If this strategy is good for me and I stick firmly to the rules I should see my analysis reveal a better win ratio, I will then increase my stake size gradually, but never so that I am exceeding 10% of my account balance (ie 10 losing trades). Should I reach a point where I am risking £2.50 (ie £50) per trade, I will revise my 10% risk downwards – thus giving me even more losing trades in a row of ’support’. But lets get back to reality and see what happens to my £100 @ 50p a pip over the next few weeks or even months!

Hypothetically 50 trades @ 60% success yields 100% return on investment:
50 X 60% win X 20 pips X 50p = £300
50 X 40% lose X -20 pips X 50p = - £200
total £100
However, this assumes the first 20 trades aren’t all losers

:clover:to all followers of Claudia's thread
Click to expand...


Great post Leia.

Just one point, you say ....

"If the 7am candle close creates the high or low for the range and therefore the order can not be placed, I will enter at the market price at 7am"

You mean "6am" close .... ;)

I also like the fact that you are sticking to the rules to make a fair test, where some people seem to be making it up as they go along ... like Alexbabwa (no offence Alex), but a couple of times, you've changed the rules (admittedly with logical reason) and then kicked yourself when you could have taken more ....

Plan your trade then trade your plan. Simples.

Paulie
 
wil68 said:
I Understood that the strategy you used was 1am candle open, 6am candle close prices to determine buy/ sell signals. Are you actually looking at the high/ low during this period? What were your buy/ sell levels?
Click to expand...

The highs and lows but ignoring the spikes/wicks.
 
wil68 said:
I Understood that the strategy you used was 1am candle open, 6am candle close prices to determine buy/ sell signals. Are you actually looking at the high/ low during this period? What were your buy/ sell levels?
Click to expand...

Read post 818 - but your charts are an hour ahead of mine if you using MT4 in UK. Your 6 am price was my 5 am in other words.
 
Claudia123 said:
I might be wrong again then !! But looking very quickly his sell was on close of 5 am bar GMT.
Click to expand...

I don't think the times are an issue - at the moment, my screen shows me in the middle of the 8am candle, which should be the same as yours. It looks like I just made a mistake in looking at how you determine your entry levels.

I initially thought you simply took price on open of 1am - price on close of 6am candles, but you actually look at the highs/ lows during this period. What may also cause a discrepancy is what timeframe you look at for the range. I understand you don't take spikes into account; this is fine on 1 hr chart, but on 5/ 15 min charts, these spikes will obviously be the body of the candle.

Sorry if I'm a little bit annoying with this, as I said, I don't trade this way, but I'm always interested in looking at something different to what I do, and just couldn't see how you got entries.
 
wil68 said:
i don't think the times are an issue - at the moment, my screen shows me in the middle of the 8am candle, which should be the same as yours. It looks like i just made a mistake in looking at how you determine your entry levels.

I initially thought you simply took price on open of 1am - price on close of 6am candles, but you actually look at the highs/ lows during this period. What may also cause a discrepancy is what timeframe you look at for the range. I understand you don't take spikes into account; this is fine on 1 hr chart, but on 5/ 15 min charts, these spikes will obviously be the body of the candle.

Sorry if i'm a little bit annoying with this, as i said, i don't trade this way, but i'm always interested in looking at something different to what i do, and just couldn't see how you got entries.
Click to expand...

080110cable.gif If it helps, the yellow box is the breakout highs and lows for me.
 
Hi Claudia, been reading over this thread & would like to start trialling your method, I also trade a breakout but on a 30min chart using 4-7am H/L.
Just a quick question about your version do you place orders at both the high and low and cancel one,or do you identify the trend and just place an order in that direction?
Thanks
 
wil68 said:
Do me one last favour for today then, confirm your buy/ sell entry levels please.

Am I correct in thinking Buy @ 15944, Sell @ 15919 ?
Click to expand...
You getting close and I don't mind answering questions.

My buy signal was the 1 am bar at 47.6. Sell signal came from the 2 am bar at 21.8. These are mid prices and have add/subtract 1.5 for the spread using IG Index. Break out above/below these areas and I trade. Hope this helps.
 
Good morning everyone,

I'm just thinking about a method that is similair this. Claudia, have you ever thought of testing a method where by you trade the breakout, but instead of taking 20 pips let it run? You could try a trailing stop, time based stop or just take 50% of profit at 20 pips and let the rest run with a SL at B/E? I'm trying something similair on demo right now and I'm up 60 pips so far.
 
ste2009 said:
Hi Claudia, been reading over this thread & would like to start trialling your method, I also trade a breakout but on a 30min chart using 4-7am H/L.
Just a quick question about your version do you place orders at both the high and low and cancel one,or do you identify the trend and just place an order in that direction?
Thanks
Click to expand...

Hi - yeah I have done that before placing orders in different directions then cancelling one. But approaching 7 am you pretty much know which ways its gonna go so I just buy/sell at market when the signal is given. Saves messing around placing and cancelling orders so keeps it very simple.
 
HawkTrader said:
Good morning everyone,

I'm just thinking about a method that is similair this. Claudia, have you ever thought of testing a method where by you trade the breakout, but instead of taking 20 pips let it run? You could try a trailing stop, time based stop or just take 50% of profit at 20 pips and let the rest run with a SL at B/E? I'm trying something similair on demo right now and I'm up 60 pips so far.
Click to expand...

The 20 point breakout thing is too consistent and profitable for me to change right now. However, have been trading breakout of the London opening using 4 hour time frame - close of the 4 am bar. Similar to what you suggesting. I looking 1:6 R/R using trailing stop.
 
Claudia123 said:
The 20 point breakout thing is too consistent and profitable for me to change right now. However, have been trading breakout of the London opening using 4 hour time frame - close of the 4 am bar. Similar to what you suggesting. I looking 1:6 R/R using trailing stop.
Click to expand...

Same idea with that, buy above 4am open/close and sell below?
 
Hi all. I posted on this thread a while ago re trading the London Open and finally took the plunge. I couldn't be bothered to code MT4 so bought a system. Set up my indicators last eve and am in for my first trade this morning.

I have three profit targets set - +20, +40 and +60 from entry. Targets 1 and 2 have been hit and stop moved to breakeven for the third lot (which has been as close as 6 pips from triggering this morning)

So far so good! Will keep you posted as to how this goes!
 
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