Good luck. I’ve designed a similar system myself, although I look for low volatility signals. There are lots of ways of playing daily high/low breaks. 
Thanks for the comments. the idea behind this is that the high/low is a support/resistance so a break out at these levels is much greater which is why there is rought an 80-90 percent chance of a breakout from the high/low, aand what you are suggesting with how often 20, 25, 30, etc pips are broken, along with the s/l is EXACTLY what I’m looking for.
Again thank you very much for that great, non biased comment. Very constructive.
Cheers,
AK
Ace,
I’ve seen a decent idea concerning monday issues. Whether it’s based off of the small price range/volume of sunday, or due to news reports over the week end, maybe adding 10-15 pips on the entry for mondays only, would be a good idea. This is to ensure the market is actually going to make a move for monday, but also the question is, if you increase the entry point, will their be enough movement after that to be worth the risk to reward for the trades.
It may even be plausible to not even trade on mondays all together.
These are questions and concerns that I plan to answer, in due time.
Cheers,
AK
As an update, On monday, there was no break of the high or low from friday, which means we are on an inside bar. And now, today on tuesday, there has yet to be a break on the high or low from monday. So now we have a mother-child-child setup for those who know Inside bar candles.
This could be a great example for me to teach the spin of the IB for this day break strategy that I mentioned on the first page. Hopefully we get some nice trades towards the end of the week, since the market has been acting weird due to the holidays.
Happy New Year,
AK
Hey Traders,
Starting Monday, I will be doing my forward testing with a demo account. I will then post trade results daily after that and will then explain my analysis of each trade and how the S/L and TP are working and how days of low volatility (Sunday and Monday) are doing. Basically, I will be explaining overall if there is a way to fine tune the day break strategy to make it profitable.
As of right now, my trade setup for this demo is as follows:
Server Time/Daily Close: New York Close Candles or GMT -5/UTC -0500
Currency Pair: EUR/USD
Time Frame: Daily
Entry: OCO Long, 1 pip above previous daily high/OCO Short, 1 pip below previous daily low
Exit: Stop or Target Profit. (Set and Forget)
Stop: 10 pips
Target Profit: 25 pips
After I have accumulated enough data, I can apply minute changes in order to determine if I’ll have a higher winning average. You can’t force the market to go your way, but I’d like to see a winning average of 80%. As of today, I feel I will need to cut Mondays out of the trade entirely. I doubt even altering the settings for just Mondays will serve to increase my winning average, but we will see. I also have a feeling that I will need to increase the offset for entry on the break of the high/low to say maybe 5 pips, but we will see.
Hope you guys enjoy the future of this and can learn something from what is presented.
[QUOTE=“awk3524;584431”]Hey Traders, Starting Monday, I will be doing my forward testing with a demo account. I will then post trade results daily after that and will then explain my analysis of each trade and how the S/L and TP are working and how days of low volatility (Sunday and Monday) are doing. Basically, I will be explaining overall if there is a way to fine tune the day break strategy to make it profitable. As of right now, my trade setup for this demo is as follows: Server Time/Daily Close: New York Close Candles or GMT -5/UTC -0500 Currency Pair: EUR/USD Time Frame: Daily Entry: OCO Long, 1 pip above previous daily high/OCO Short, 1 pip below previous daily low Exit: Stop or Target Profit. (Set and Forget) Stop: 10 pips Target Profit: 25 pips After I have accumulated enough data, I can apply minute changes in order to determine if I’ll have a higher winning average. You can’t force the market to go your way, but I’d like to see a winning average of 80%. As of today, I feel I will need to cut Mondays out of the trade entirely. I doubt even altering the settings for just Mondays will serve to increase my winning average, but we will see. I also have a feeling that I will need to increase the offset for entry on the break of the high/low to say maybe 5 pips, but we will see. Hope you guys enjoy the future of this and can learn something from what is presented.[/QUOTE]
Hey awk. What a coincidence it is that you wrote this. I started looking into this strategy the other day. I still need to look into it a lot more today, but so far it is profitable. I am using the same SL and TP as u have mentioned here. But have seen the need for entry at 5 pips above below.
Hello AK,
please carry on! Do you have some early results to share with us ?
Cheers
Hey Leviathan,
I have to apologize to you and other traders. I had to take a 2 week business trip and was unable to carry on with testing this strategy. So come this monday, I should then actually begin to test it finally. My work keeps me busy but I’m working on this and another strategy as well.
Cheers
Don’t apologize, I appreciate your work. Looking forward to see your results.
Cheers
Technology has already done most of the hand work for us and not to mention actual candlestick.
Hi awk,
Thanks for sharing.
I would like to revisit the use of OCO. I believe the strategy would be more profitable if we leave both straddle orders in place throughout the trade period. This is because of the generous risk to reward ratio in our favor at 1:2 (SL=10 TP=25). A 50/50 win/loss overall result for 2nd trades will result in additional profits over trading just the 1st activated trade. Losing that second position at a rate of 2/3rds of the time will still result in some profit for the second trade scenario, if the broker spread isn’t too excessive.
Last night I traded the EURUSD with my 1st attempt using your parameters. My 24 hour day set at 8:00 GMT (200 AM CST). The Sell trade breakout came first, and lost 10 pips, but price rebounded and made a profit of 25 pips on the Buy side breakout. So, a net of +15 Pips instead of a loss of -10 pips. Granted…this is but 1 trade setup. However, I believe that the 1:2 ratio makes staying in the game worthwhile.
Your thoughts?
awk,
How do you handle large boxes? For example, today’s EURUSD is already 137 pips high? Do you still trade this box? What about very small inside bars?
Very interesting system. Look forward to hearing results.
Good question.
Lets say every day, the average movement of a daily candle is like 75 pips. On the particular current day, the daily close shows that the daily movement in price is 150 pips and has closed as a bullish candle(move upwards). The next day, the candle is bearish, but doesn’t take out the low of the previous candle because it has such a high range, relatively speaking.
You have two options here.
You can close the orders placed. Now, why would you close the orders? Well the order is 99.999999% going to get hit, even if price doesn’t breakout for a few days, eventually it happens, and price should make a significant move on the breakout. So why wouldn’t we just leave the order? Well you have to remember that you’re placing an oco order every day after the close of the market. So if your trading plan allows you to risk a maximum of 5%, eventually you will be in 2 particular trades at one time. So now you could be in 2 trades 5% capital at risk each so now if you lose both trades or get stopped out, you’ve lost 10% of your money. That’s a big hit. Which is the reason why you may not feel comfortable. A solution is to recalculate your position size on this trade to risk 2.5% and when the daily candle price approaches the high or low, you can enter that trade with a 2.5% trade to allow you to have both trades. Again, it is a question of how comfortable you are and how comfortable you are will depend on your technical analysis and what the market is telling you. For Example: You have this situation, but the market is trending up/down very, very strongly. If the market is trending strongly, and say you your candle is just about to make a crossover on the rsi/stochastic on the oversold/overbought level, you may feel that the reward is worth the risk. Simply speaking, leaving that order waiting a few days for that breakout, while continuing trades on the next few days is a Question for you, a MONEY MANAGEMENT decision, which I cannot make for you. I hope that explains long candles.
As for your second question, trading inside bars falls under the same money management issue as previously stated, but inside bars present a nicer set up. Let me explain it this way.
This strategy is a breakout strategy. Recall bollinger band squeezes present the chance for a breakout in the near future. as the bands contract, the breakout gets closer and closer until it happens.
When you look at inside bars, think of the high and low of the inside bar or child bar in relation to the high and low of the bigger, or mother bar. price has contracted meaning a breakout is imminent. This is the logic behind all inside bar strategies.
NOW… how does this pertain to this particular strategy?
Well, lets say you place an oco with a 10 pip stop and a tp of 25 pips on buy above and sell below the high and low. Because of the breakout analysis, you now don’t need to set the tp to 25 pips above/below your entry. You can set a 10 pip stop still the same, but make the target profit 25 pips above your entry of the previous daily candle. Make sense?
hopefully this picture i made will explain the inside bar concept.
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Hi
It would be fantastic to revive this thread. This is a system similar to what I’m working on currently. I think if maybe some filters could be applied it would be exceptionally profitable. Small wins turn into huge gains given time, as we all know.
I love the idea of entering only once the price has moved slightly past the break.
How are you doing with the strategy, and yourself for that matter?
Look forward to hearing from you.
Thanks,
J
Hi jakeparkin,
Have a look at this link it is more or less the same system.
http://forums.babypips.com/free-forex-trading-systems/68017-consistent-accurate-breakout.html
Regards, Trader9.