so 7 pip SL and 9 pip TP would make a huge difference! 
This covers all trading cost
Hi all. Is ANYONE trading this system on a live account? If so, what are your results?
Enough demo and back-test talk, who has put money on the line? If the trades work in demo, they should work live, IF you ensure that the trades are large enough to cover commissions, spread, etc. So…live traders speak now or forever may this thread hold its peace.
I’ll cook up some more bacon while I wait for an answer
Well yes and no bro. Typical forex answer. I would be inclined to believe that this combo could indeed be far better values. It all depends how successful your rules are at filtering out the bad trades while leaving the good ones. Each pair may be different. EU might be 7/9 while the UJ might be 5/6.
As I reinforce, its hard work “scalping” (for lack of a better word) out these pips at this level. Relative to a trader chasing a 50/50 SL n TP our costs are 5 to 10 x’s greater. So our win rate has to be that much better and our money management needs to be spot on.
Keep working on it lads.
ok, but in-case on EU, we use 7pip SL and pip 9pipTP and we win at least 60% of the time. It means we are profitable.
SO this might work just need to verify and possibly apply filters, but the open filter is enough as i think.
your right! this system is very good so far! 7pip SL ant 9pip TP , test it guys!
Good stuff bro. You demo or live?
7-9 maybe the best option. All of us can test either demo or live and see the results. these is another thread where 5 pips works on live, i believe this has potential to perform better. Also i like the simplicity of the system, the simpler the better
agree with you. 7-9 but depends on pair. but 7 and 9 is a good baseline
yes, will trade it tomorrow. i think this works well on live. maybe try it on a cent account
cheers
Hello
Thank you for this system
I have 1,6 pips spread on EUR/USD, should I still use only 1 pip below previous day high/low or maybe more?
only use 1 pip.
lets count together… SL 10 and TP 5. If the first trade is loos the you have to win next two trades to make a profit that makes the RR ratio to 2,2 to 1. and in this case (scalping) its just a metter of luck that once you enter teh market whipsaw to -10 pips and then goes all the way down, but unlucky your already out of trade due to SL I have a better idea… what about to check a weekly and monthly graph, draw a bottoms and tops and once its close to bottom or top start etering trades in sell when in top and buy when in bottom with no tp and no sl and one day the market turns in your fawour close the trade half way up or down
this one seems promising, i dont read post per page, i just read the first page and last one, would be great if the result are listed on the first post. any kind statistic would be nice, in order to evaluate we need it, especially a newcomer just like me :). have you ever consider to turn this into an expert advisor ?
Maybe you should read the entire thread and you will find all the answers to your questions!!!
Nice looking system, seems you might be on to something, only problem I would have is basically especially trading on daily charts, you only do a 5 to 7 pip TP, that does not seem like much when you consider you could run up into the hundreds of pips when using daily charts, I agree, let a good trade run, but without knowing if you are going the right way, and considering price action you are basically scalping on a higher time frame.
I think when you use it not everyone can stick to the thread starters rules, but once you tweak it to your personality this could be an awesome break out strategy
Mate you need to read all the pages, do not skip a post just because it seems long and takes alot of time, eveyrone has their own opinion, you cant just use a system without understanding what its about, I made that mistake and got my fingers burnt alot
Today EUR/USD hit TP on my live account.
Hi All,
I have been watching this thread with great interest as it is similar to an EA I was trading that placed a BuyStop +5 pips above yesterdays high and a SellStop -5 pips below yesterdays low on the daily charts.
A point with this trading method some of you seem to have not understood is the action of your brokers spread and any slippage.
You broker will always win his spread.
In essence when going LONG your entry is triggered by the Ask price and the TP or SL is triggered by the Bid price which lags the Ask price by the spread.
Going SHORT the entry is triggered by the Bid price and the TP or SL is triggered by the Ask price which lags the Bid price by the spread.
So, trading this system using Option 2, TP = 7 pips & SL = 7 pips and a 2 pip spread.
If you win then you have to win by your take profit target plus the spread 7+2 a 9 pip move in your favour to win just 7 pips.
If you lose, you lose by only a 5 pip move against you, the SL minus the spread, 7-2 = 5.
So in reality your TP = 9 pips to make 7 pips and your SL=5 pips as it was never greater than 5 pips from your entry point.
Interestingly if you thought the market would only give 7 pips and not move as much as 7 pips against you then Option 1 with TP=5 and SL=10 would have been a better bet as in a market with a 2 pip spread this would equate to a 7 pip move in your favour and maximum of 8 pips against you.
Slippage.
Here I want thank Carnino for his comments on this subject. My system suffered badly by up to 3.6 pips slippage on some trades (Broker Alpari uk) going from pending order to market order. So now I have added a check after the pending order becomes a market order to check TP & SL and move if required.
Imagine the above trade TP= 7 and SL= 7 pips, with 2 pip spread and 2 pip slippage.
If you win then you only win 5 pips, as your take profit target became two pips closer.
If you lose then your loss is a whole 9 pips, as your stop is two pips further away.
So Risk/Reward becomes 9 risk and only 5 reward on a 7:7 trade.
I am working on a EA for this system and will be trading it both live and demo this week to see how it works out.
Initial thoughts are that the market is too volatile for such small stops. If you watch the market move it is constantly moving up and down by a lot more than 7 or 10 pips. More than enough to get into a trade and then stop you out.
For this system to work you need a strong move of sufficient size to trigger the trade and then hit your profit target without retracing.
Regards, Trader9.
Hi All,
I am not trying to highjack this thread. But I have some feedback on some simple backtesting I performed.
Consistent Breakout EA
This EA has been based entirely on this thread and uses a daily close above both weekly and monthly opens as a long entry filter. A Pending order is then placed one pip above the previous days high.
If the pending order suffers any slippage in becoming a market order, then the TP and SL are moved to the correct values. (Hopefully, code not tested on a live account yet)
All pending order entries are delayed by a minimum of one minute to allow the market to settle and a filter has been added to avoid market opening gaps.
Any existing open orders pending or market are closed at end of day.
Reverse all above for a shorts.
Preliminary backtesting on only USDJPY data from Feb 1998 to June 2013 showed some startling results. Note, no slippage occurs when backtesting in MT4 using every tick. MT4 build 745.
[B]Option 1 - TP=5 and SL=10. Fixed lot size 0.01, spread set at 3 pips.[/B]
1,352 trades netting £2,027.75 profit, 77.29% win rate. Short 639 trades, 79.34% wins, Long 713
trades, 75.46% wins, average win £4.79 average loss -£9.72.
[B]Option 2 - TP=7 and SL=7. Fixed lot size 0.01, spread set at 3 pips.[/B]
1,352 trades netting £2,803.00 profit, 65.9% win rate. Short 639 trades, 69.33% wins, Long 713
trades, 62.83% wins, average win £6.67 average loss -£6.81.
I actually ****ed-up my first test by reversing SL and TP and got these results. Better I think you may agree?
[B]Option 1 - TP=10 and SL=5. Fixed lot size 0.01, spread set at 3 pips.[/B]
1,352 trades netting £4,254.00 profit, 56.07% win rate. Short 639 trades, 59.15% wins, Long 713
trades, 53.30% wins, average win £9.43 average loss -£4.87.
Regards, Trader9.
1 Like
Hi Waiting,
I like this system as it is similar to my system Midnight trader. Testing your system and taking on board some of the comments made on this thread, I have a number of suggestions.
Consistent Breakout has a number of weaknesses.
First and foremost is the Options 1 & 2.
I use what I call my system No. Basically if a system has an average win rate of 50% and the average win is double the average loss i.e. has a 2:1 ratio then I multiply the ratio x percentage, so in this case it is 2 x 50 = 100.
So for me any system has to have a system number of at least 100 to be tradable in the long run.
Option 1 SL=10 and TP=5.
Testing on USDJPY over 1352 trades the above results were produced 77.29% win rate but with the average win at £4.79 and the average loss at -£9.72 the ratio was 0.49. So the system number for this setup was 77.29 x 0.49 = 38.09 way below my 100 for a good long term system.
However it was still profitable making £2,027.00
Reverse the SL=5 and TP=10 and over the same 1352 trades we get a win rate of 56.07% , down 20% but the average win is now £9.43 and the average loss -£4.89 giving a ratio of 1.94. So now the system number is going to be 56.07 x 1.94 = 108. And profits also doubled to £4,254.00.
Remember this is backtesting only and a SL=5 is very small.
However, that said I did trade this system live Sun/Mon on three pairs and I had revered the SL to 5 & TP to 10 in error on the EA and all three pairs won, much to my surprise.
Option 2 SL=7 and TP=7 is better. 65.90% win rate and average win £6.67 and average loss -£6.81, So ratio is 0.98 x 65.9 = 64.55. Still profitable though £2,803.00.
I did try SL=5 and TP=20, this produced a system number of 171.20 £7,586.00 profit, but I am very sceptical that a SL=5 will work in our current volatile markets.
A better option maybe SL=10 TP=25. Sys no, 51.26 x 2.4 = 123.47 Profit £9,478.00. So I am going to trade this live on demo and funded accounts this week.
Second draw back of this system is that the Weekly & Monthly opens are used as a form of trend indicator, but this is not a trend trading system as it only trades daily. I understand why it is used to give some measure of only placing trades in the trending direction but the current market is so volatile that you would do better to place two trades each day. One above and one below and catch which ever way the market goes.
I estimate that your opportunity to trade this winning system to its full potential is being limited to maybe only 45% of the time instead of 100%
Consider this if using the Consistent breakout system only 45% of the time, using say TP=25 and SL=10, this has a backtested profit of £9,478.00 from 1998-2014.
Then what if you traded in the market 100% of the time that would be £9,478 x 2.22 times more often = £21,062.00 over the same 1998-2013 period.
My system Midnight Trader is the same as Consistent Breakout, but it opens two pending orders every night one above and one below the previous days high and low. Which ever order is triggered first closes the other order.
Backtested results on the same data period for USDJPY using TP=25 and SL=10.
Produced 3152 trades instead of 1352.
Produced £22,002.00 profit instead of £9,478.00.
Produced 51.17% wins compared to 51.26% wins.
Average win £22.70 compared to £22.64.
Average loss -£9.49 compared to -£9.42.
System numbers of 122.4 and 123.2 respectively.
So the same system can be traded more often with the same risk and greater reward. All the above is calculated on a fixed lot size of 0.1, What if you used a small percentage of your growing account on every trade?
Friday night (GMT) I hope to post the results of this weeks live trading and will post both EA’s and the includes file as, my EA’s use a second file from which they call all their functions.
The only worrying thing about this system is that the backtested equity curve is a straight line going up from 1998 until September 2011 and then flattens out somewhat. It looks like this system will not work as well in the future as it did in the past due to the extra volatility in the market today.
Regards, Trader9.