Breakout Strategy

[gustav213]

Hey everyone I have been surfing around in these forums for some time now and seen some great strategies and some not so great. I recently decided to become a member and put up my strategy that has helped me a lot.

The best thing about my two strategies is that they work for people with jobs or going to school like me. The first strategy can be done in about 30 min once a week for a nice amount of pips. The other takes about 30 minutes max I have brought it down to about 15min in the morning Monday through Thursday if you get good at it and how many currencies you use. As you noticed I never trade Fridays, Ill look at the charts but normally the movement is too slow or unpredictable to trade safely.

4H Strategy

The first strategy is by far the simplest one and its the 4H breakout. It has been discussed many times on these forums and while they all have there little variations they are essentially the same.

This strategy is meant to be done once a week and forget about it. Just set it up Sunday night and set your orders.



So when looking at the above screen shot of my MT4 you can see the strategy is very simple. It starts every Sunday night at 00:00 or the beginning of the week. If you are using Metatrader 4 you can just click Ctrl - Y and it will set up lines for you at the beginning of every week.

You then draw lines or a box like in ym screen shot the size of the first candle of the week. This will make the low of that candle your sign to sell and the high of that candle your signal to buy.

Very important I recommend adding a 5 to 10 pip buffer in the high and low so that you can prevent getting hit by a bad signal, since I have seen it happen before when the price just goes 1 or 2 pips below the low or high and a trade is started just to get hit with a stoploss when it goes the other way. Normally after 5 to 10 pips the price is going to keep moving in that direction.

My take profit is normally set at 75 pips and then at 150 pips for my second TP. This method has worked great and very few times has it not worked. My stoploss has usually been 50 pips.

so..

S/L 100 pips
T/P1 75 pips
T/P2 150 pips

I have been experimenting with trailling stops and using different indicators to help me decide when better to exit trades or keep going but that does take more interaction and leans away from the set it and forget it method I was going for.

I will soon post some indicators that I have been experimenting with to see if they work on the 4H charts. And I will also post my results with trailling stops.

This strategy works or should work on all JPY pairs but I ahve only tried it one four of them : USD/JPY, GBP/JPY, EUR/JPY, CHF/JPY

15Min Strategy

This is my second strategy and it does involve a little more interaction than my previous one. It is meant to take advantage of the breakout that happens from 7am to 9am during the New York breakout.

This strategy has been called the Big Dog strategy around this forum, and if you have read those threads you will get what this strategy is about. From 7am to 9am EST the New York Stock Exchange opens and markets go crazy. You will see a lot of price movement during and after this time period and you will take advantage of it.

Please look at the screen shot to see how it is set up:



As you can see this strategy is also very simple to set up:

1)two vertical lines one at 1100 GMT & 1300 GMT
2)two horizontal lines one at the lowest candle & one at the highest candle

This is all you need to do, then if the price breaks the low line then you sell and if the price breaks the high line then you buy.

That is the essence of this strategy, I have heard of people using Fib lines, etc. But I normally just shoot for 50 pips at my first T/P and 100 pips at my second T/P.

So...

S/L 50 pips
T/P1 50pips
T/P2 100 pips

I normally just try and get 50 pips unless I see some really good price movement I might push the T/P higher, but normally I am not at the screen to see how it is moving so I just say 50 pips is a nice amount.

When I was first using this strategy I was just cutting it at 20 pips but thats only if you want to be really safe. I am also experimenting with trailling stops and indicators for this strategy and will post them once I get some more news on them.

This strategy has been pretty good to me. It should work on most USD pairs but I ahve only used it on four of them: EUR/USD, USD/CHF, USD/CAD, GBP/USD

Here is another screen shot of a week or two ago so you can see how simple and effective this strategy is:



The circles are where you would enter the trade. I will post some more screen shots as soon as I can get some free time.

Hope this helps everyone out, they are by far my two favorite strategies and I hope some of you out there enjoy them as well.

Let me know what yall think of this.

[fidji]

Thank you for this smart strategy . I will try the second one (15Min) tomorrow and I let you know.

Hervé

[gustav213]

Yes the 15min is a great strategy I have been using the TRO tunnel which I found on the babypips forum and it is really good at showing you where the price is moving too so it helps exiting trades at good times.

[fidji]

Unfortunately I lost 50 pips today on the USDCAD using the 15min :
- entered short at 1.14298
- stop trigered at 1.1480

[gustav213]

Hey there I just looked at my charts and I have seen a trigger for the USDCAD 15min. I'm posting a screen shot here so you can see what I mean.



The two vertical lines need to be placed at the arrows which are 1100 GMT and 1300 GMT the two vertical lines one at the low of the box and one at the high of the box then when the candle breaks the line you short or long the trade. Here its kind of late in the day I would have been tempted to buy but maybe with a small TP. Can you post a screen shot of your trade maybe I can see what happen.

[fidji]

I won 33 pips with your strategy on EURUSD :
- entered short at 1.39650
- take profit at 1.39317 (33 pips)

I could have taken 50 pips and more if I waited more time. But it is always the same : better take profit when there is one than take loss while still in the game.

[gustav213]

True, yeah the trick to this is just make sure you draw the correct lines and I normally give a 5 pip buffer between the high and low jsut to make sure its not a false spike. But if you trade 2 or 3 pairs you can easily make 100 pips a day with this.

[JAWPIP]

Gusta213,
This is my first post and I wanted to say thanks! I was taught a similar method about 2 years ago, but fell away from it - wish I hadn't. The London box works quite well also, but you have to forfeit sleeping if in the US. I just back tested this system on the Cable for all of June and half of May - excellent results.

[fidji]

Thank you for posting your screen for USDCAD. Damned, I did not put the last candle at 13:00 GMT in the range. This is the reason of my loss. I entered the market during that candle. If I did not make this mistake, I should have entered long instead when the marked reversed, and I would have won 50 pips as expected. I won't do that mistake tomorrow. Thank you again for your help.

[gustav213]

Originally Posted by fidji

Thank you for posting your screen for USDCAD. Damned, I did not put the last candle at 13:00 GMT in the range. This is the reason of my loss. I entered the market during that candle. If I did not make this mistake, I should have entered long instead when the marked reversed, and I would have won 50 pips as expected. I won't do that mistake tomorrow. Thank you again for your help.

Yeah its all about making sure the setup is correct.

Originally Posted by JAWPIP

Gusta213,
This is my first post and I wanted to say thanks! I was taught a similar method about 2 years ago, but fell away from it - wish I hadn't. The London box works quite well also, but you have to forfeit sleeping if in the US. I just back tested this system on the Cable for all of June and half of May - excellent results.

I'm glad it has helped it, yeah I have looked at the London session but I am Central US time so I would really have to give up sleep lol