To all due respect to pipwolf and HIS system.
Hi pipwolf and thread followers,
I really like the thought of this system. I started using the daybreak system on practice w/o much luck recently but I am staying hopeful. The reason I write is because I studied the info from this week and I came across something interesting. The 2 currency pairs I'm trading on daybreak are AUD/USD and EUR/JPY. I'm partly telling everyone for the hope that someone knows how to make this into a formula on excel and partly to inform you and your followers on a potential idea that might be profitable.
It took me about an hour to manual input this data just for this week. But here goes.
On FXCM. Day= 1700pm EST-1659EST
While trading these pairs I realized that there is a big variance, at least recently, between the high/low of the daily candle and the actual close of the daily candle as compared to the high/low of the day before. If we figured out how to close our candles on exactly the high of each day, the profits on AUD/USD and EUR/JPY were significant (220.7/202.5) while just waiting to close till the end of the day would have landed losses on AUD/USD and a small profit of around 69 pips on EUR/JPY this week.
(all those numbers excluded spreads and such)
Well, we all know it's practically impossible to catch the high everyday unless you're some type of super wizard but I figured out a slight solution to maximizing the close of your of your transaction that worked this past week.
I took the total profits if we closed on the high/low of each day added them together and divided them by the days that got activated (5). That number on AUD/USD was 44.14 pips a day. Now, only 2 days would have hit with a T/P of 44.14. (39.8, 74.0, 56.0, 13.9, 30.0). BUT! If i took the 44.14pips and multiplied it by the fib point of .382 and subtracted that from 44.14pips that number is 27.28pips t/p and 4 days would have hit for week profit of 109.12 pips - 20pips (spreads)= 89.12pips for the week of Oct 1-5.
SOO, you ask why I used fib level .382. Its because on the calculations for EUR/JPY it was eerily close to the cut off point of of 4 trades hitting that t/p or only 2 trades hitting that T/P. On the EUR/JPY, total profits if we hit the high/low each time was 202.5. So, i divide that by 5 and get 40.5 pips per day. Of course, once again, impossible to hit perfect. So i multiplied that by the fib .382 and that number was 25.03. So, if I had put the T/P of 25.03 on all trades that week, 4 of the 5 days would have hit. (25.4, 16.4, 27.8, 73.5, 59.4). Total profits of 100.12 pips - 20pips= 80.12.
I haven't calculated total loss days because they were very minimal and I'm trying to make this idea seem extra sparkly to someone whom might want to back test it in a more effect manner.
So from here on I will use this system for figuring out my t/p. I think I will try and and use the past 5 days to figure out that magic number each day and use that as my T/P. Kind of like a EMA. I'm not sure what S/L would be effective with this method or if the risk/reward ratio makes it even plausible but I'm just here presenting an idea that someone might want to add to, maximize or adjust for it to work properly in all markets. Feel free to email you're ideas, or concerns or if you think i just figured out a useless mathematical loophole, respectfully please. I'll be really busy these next couple of weeks because I'm moving so I can't constantly test this theory but if anyone out there has the time feel free to try this under the condition you share results.