I’m finding this almost impossible to backtest because of the small trailing stop. Even on a 1 minute chart each candle can be 10-15 pips, so I’m not sure if the trade would have gotten 5 pips, 10 pips, or somewhere in between.
Here’s what I do know…
I scanned through the higher timeframes and found the worst month I could for the system. March 2006 had 17 wins and 7 losses. The worst possible scenario for that month (at 2% risk per trade) is a 8% loss. The best possible scenario is a 2.5% loss.
The actual number is probably somewhere in the middle, around -5%. Keep in mind that’s the [B]worst [/B]month I could find. The best month, one with all winners (which TREVPICK001 has had quite a few of), is a 23% gain.
So even though I can’t produce good backtesting results I say this is a great system!
its also worth while a thought if your last bar at 0600 is finishes at or close to the high for the night only take the oppsite trade and visa vera if it the last bar finishes near or above the low
im also sure applying a diffrent money mangment system to what i have will give you less wins but overall more pips, there is lots of scope to this sytem you can do what you want with it, i only use 5 pips TS because i like the trades to be over with quickly (personall choice) you might want to do something diffrent- what i think everybody would agree thoe it an excellent entry point on anybodys chart.
i also use tottally diffrent money mangment rules
i start with �300 + 20% in my account each morning, once the trade has finished i imediatly draw out what profit has been made, so every day i start with the same balance- also i dont have to worry about having large amounts of cash in the account
alpari is the broker i use, and i consider them to be one of the top retial brokers out there- i think in 3 months time i want to move onto ecn brokers as i think i will preobably out grow alapari
Here is a careful analysis of the last few days of Cable (GBP/USD) >>>
[B][U]Explanation[/U][/B]
The chart is from GFT Dealbook and processed in Microsoft Paint.
I switched the time scale to GMT+1 (easy).
The pink areas are non trading time.
The white areas are trading time, in this case 5.00 am to 1900 pm GMT time. (London open).
The green lines extend from the highest [U]non trading pink time[/U] into the white trading time. These lines mark where to trade [U]long [/U]in the white trading time.
The red lines extend from the lowest [U]non trading pink time[/U] into the white trading time. These lines mark where to trade [U]short[/U] in the white trading time.
If the price action did not trigger the trade in the white trading time, a red cross is marked.
If the price action did indeed set off the trade in the white trading time, a green tick is marked.
[B]You will note that in the white trading time…[/B]
the trades were always successful
OR
the entry was not triggered.
[U]There were no losses.[/U]
[B]At last observation…[/B]
the red entry line at the extreme right hand of the chart (to be yet triggered) was well and truely triggered with the price action passing way thro it and roaring downwards!!
well, to jump in on the initial question…my win / loss ratio is bad…I lose more then I win…BUT…after 10 weeks live my account in still growing steadily…I cut the losers short, and let the winners run…to a reasonable calculated degree…
How many pips do you guys target with this method and what is the significance of the 4amGMT trade entry time?
For example, London doesn’t open til 0830. Why not use the 0830 low?
i use the priod were volitily is the lowest, for what ever reason from 6am volume starts picking up, stirctly speaking you can amend the times if you so wish, however i do protest i have had a lot of success with this time frame so for me i ant changing it,
I see that there’s been some really interesting development here since last night. That’s the drawback of a dayjob huh
Anyway, I’d just like to ask why these specific times ( 0500, 1900 London time). They don’t quite correspond to bank office hours. I understand that this works, I’m just curious why not instead 9-17?
I’m definately placing this method high on my to do list. Thanks for sharing.
It’s a pity I can’t be up at 6am to try this out. Similar to a daily breakout method I know of.
Presumably the 5pip trailing stop relies on the move having momentum behind it. Do you think it would work well with a simple 30 TP, 30 SL?
I assume you’re UK based if you’re spread betting - do you have to leave your computer on to run the trailing stop? You actually get up at 4am to do this?
i have tried it with a take profit of 15 and a stop loss of 30 that also works
but yes i wake up at 4:45am set the pending orders with the stop loss then go back to bed for an hour
i like going back to bed for a hour because i find trades worker better without me messing with them.
i suppose a ea could be made for this
any programmers out there give me a shout
take profit of 30 would would if you had a trailing stop of lets say 8 pips
even with a 5 pip trailing stop i have had 58 pips in 1 trade b4 now because when it breaks it can some times drop like a lead bloon or rise like a rocket ship.
that why i tend not to use a tp because my TS is so tight i might aswell let it run to see what i can get.
i dont know if it has anything to do with ofice hours in the uk- more to the point 5am gmt is comming up close to the end of the asian market and start of the london, i think its probly a mix of these 2 over lapping
as far as i can tell most of the volume is traded gmt morning session,
This is really interesting stuff and a modified version of the breakout method I know.
Has anyone tried this on some pairs that might be more suited for later open.close times like say the overnight bit between the end of the US session and the end of the Asian seesion.
Maybe USDCAD or USD/JPY?
well considering i have had 2 losses in 6 months of 30 pips each (total loss 60 pips)
and i have returned well over 1500 pips in 6 months
risk/reward ratio to me does not apply on this stratergy
if i was only winning 50% of the time then yes i would be looking at R/R and i do on other stratergies,
if r/r is important im sure you can come up with a ratio were the R/R is your cup of tea, more importantly i think this stratergy has a excellent entry point
what you do with your exit point is up to you
they say 90% of people lose on forex- there has got to be a reason for that
