GBP/USD - 4hour breakout strat

Trading Systems Free Forex Trading Systems
1

I’ve been forward testing this simple Cable 4hr breakout for the last 9 months and would like to share the setup. There’s an initial trailing stoploss of 110 pips, so might not appeal to the majority, but as a medium term mechanical strat which lends itself to automation, the returns are OK.

The rationale hinges on defining and trading in the direction of the prevailing trend from the daily chart. Trading breakouts from the 4hr timeframe with a trailing stoploss.

[B][U]Trend[/U][/B]

GBP/USD daily chart.
Apply a full stochastic (40,15,15).

Trades are taken in the direction of the stochastic, for instance it’s been looking for short entries since 26th March.

[B][U]Entry[/U][/B]

LONG
Price breakout above the last 4hr high plus 5 pips.

SHORT
Price breakout below the last 4hr low minus 5 pips.

ENTRY SCHEDULE
7:00 AM to 5:00 PM GMT(+1 at the moment), Monday to Friday (inclusive).

[B][U]DOWNSIDE PROTECTION[/U][/B]

[B]Best net pips:[/B]
0-75 pips: 110 trailing stoploss
76-150 pips: 130 trailing
151-450 pips: 150 trailing
451-onwards: 100 trailing

The win rate is below 50% (as many basic breakout strats tend to be) and automation solves this psych issue for me. The last 9 months have averaged 250 pips per month. Use your own risk tolerance per trade.

I’ll endeavour to keep the thread updated with performance figures as trades close from today - current short +267 locked in.

All the best.

2

Short trailing stop @ 1.9878 hit, closing the trade for +267.

Daily chart trend still short, although now outside entry time window. Next short entry will be taken on a break of a 4hr low from 7am (BST) tomorrow morning.

3

I’m using NetDania’s ChartStation (daily & 4hr charts) for the purposes of this thread. Order for shorts at 1.9846 (last 4hr low -5 pips) with an initial 110 trailing stoploss.

4

Interesting idea Cowaboi. I will follow this so I hope you can keep it updated.

5

Im interested too Cowboi I like the idea of a 4 hour strat and your concept is interesting. I look foward to some updates in the future, john

6

[B]Trade #1[/B]

Short filled @ 1.9846, trailing stoploss now at 1.9888.

Edit: Stopped out for -42.

7

Trade #2

Short filled @1.9976.

Edit: trailing stoploss set to 150 pips. Currently @1.9798 (178 locked in).

Edit: Stop hit for +178.

GU - 10th April 08.jpg700×525 56.3 KB

8

[B]Trade #3[/B]

Short filled @1.9755 with the 110 pip trailing stoploss until +75, then trail with 130 etc, as per post #1.

Good luck.

Edit: trailing stoploss now @1.9780.

Edit: Stop hit for -25.

Daily stochastic still indicating short, so now looking for a 5 pip break of the last 4hr low, for the next trade.

9

[B]Trade #4[/B]

Short filled @1.9799 with the 110 pip initial trailing stoploss.

Edit: trailing stoploss now @1.9749. We’re using the 150 pip trailing stop from here until +376. Long way to go, but a free ride now, with +50 locked in.

Edit: Exits at 1.9749 for +50.

Daily stoch still short so looking for a 5 pip penetration/break of the last 4hr period low.

10

[B]Trade #5[/B]

Short filled @ 1.9697. 110 pip trailing stoploss until +75.

Edit: Stopped out @ 1.9800 for -103.

Daily stochastic still short. Next entry will be 5 pips below the low of the last 4hr period.

11

[B]Trade #6[/B]

Short filled @ 1.9935. 110 pip trailing stoploss until +75.

Edit: Trailing stop hit @ 1.9991 for -56.

Daily trend still down, so looking for an entry 5 pips below the low of the last 4hr period, between 7am - 5pm (bst).

12

[B]Trade #7[/B]

Short filled @ 1.9965.

Edit: Trailing stop hit @ 1.9894 for +71.

Daily trend still down, so looking for an entry 5 pips below the low of the last 4hr period, between 7am - 5pm (bst).

13

[B]Trade #8[/B]

Short filled @ 1.9861.

Edit: Trailing stop currently @ 1.9825. +36 locked in.

Edit: Stop hit for +36.

Trend indicator still short, so looking for next break of last 4hr period’s low.

14

[B]Trade #9[/B]

Short filled @ 1.9811 with 110 pip trailing stoploss.

Edit: Trailing stop hit @ 1.9891. For -80.

Daily trend indicator still short. Next entry 5 pips below the last 4hr period low.

15

[B]Trade #10[/B]

Short filled @ 1.9839.

Edit: Trailing stop hit @ 1.9772. For +67.

Daily trend indicator still short. Next entry 5 pips below the last 4hr period low.

Monthly stats to follow in next post.

16

[B]April 08 stats:[/B]

Win%: 50
Av win: 80
Av loss: 61
W:L = 1.3
Pips: 96

17

Thanks for the update, i think you have a very solid trading system. The thing i like the most about it, is the fact that the strategy itself is very basic, but it seems you have worked out some very good risk- and moneymanagement rules (the trailing stoplosses). These rules seems to keep you long enough in the market without too much risk. Nice!

18

Thanks for your coments. All the best with your own forex journey. Nice blog you have btw :slight_smile:

19

[B]Trade #11[/B]

Trade #1 for May.

Short filled @ 1.9851.

Edit: Trailing stop hit @ 1.9842, for +9.

20

Hallo…first of all thanks to share with us your trading sistem.
Second point,i have a doubt about how you use the trailing stop.Do you set a 110 trailing stop for the first 75 pips of profit,130 after a 76 profit and so on??

Tanks,all the best.