Hi Guys i have been playing around with a London Breakout system and need some advice, this is a work in progress, its nothing new and there are probably strategies which are similar to this.
This is what i have so far:
Take the high and low price from between midnight and 0800 and then place two pendings orders. One at the high price + 10 pips and one at the low price - 10 pips. Set the pending orders to expire after four hours which should be 1200.
All times i have mentioned above are GMT+0 (London time)
This is the opposite end of the candle, so if you set a buy take the low price as stoploss, enter a sell set the high price as the stoploss.
When it comes to the TP what do you think is best, i have tried using a static TP of say 10 pips, but then you miss out on big moves and the risk to reward ratio does not work out well, using a trailing stop works out better and helps to get bigger moves which limiting losses.
If you take a look at your GBPUSD chart for 30th August 2012 you could of got at least 10 pips profit and the trailing stop would of saved us from the huge drop that occured.
The reason i would like to have a definitive set of rules is that i work during the day 0900 - 1700 so i would like to be able to set the trades in the morning as i leave at 08.15 for work and then be able to review them at my lunch break which is 1300.
The idea behind this strategy is just to keep it simple and use pure price action. It looks profitable over my past charts. If anyone has any thoughts ways to improve it please let me know.