London Breakout 1

The influx of money into forex trading happens at 0700GMT and 0800GMT and after (Frankfurt and London open). This equates to 0200 and 0300 EST.
The only reason I can think of that the author chose 0400 is either they were on daylight savings in the US at the time for summer or he specifically wanted everyone to wait until the intitial influx of forex momentum had ended and a price direction was being decided. However, I don’t believe it is mentioned in the article?

excellent charts muthu, appreciate your help

A good breakout trade today whether you use the trendline or the Tokyo range. Tokyo range was validated very well with a bounce later in the day.
Strictly speaking, the trade is supposed to unfold quicker but when you see a validation of the Tokyo range like that, then I’m a bit more confident.
Largely the move today was helped by news numbers.


Yeah I noticed all of the discussion about the time frame. I figured that there was a reason he chose the time that he chose, and when I back tested the Euro/USD it seemed to work out OK. I tried it live for the first time last night and there was really no trade, I tried to force the GBP/USD going long (there was no swing low but there was a swing high), and it didn’t work out so well.

Roundrock:

Most Welcome !

SanMiguel,

Thank you for your charts. Appreciated.

dominoe239.

R Carter was passing along a version of the “London Breakout” strategy that Edward Revy posted on another web site, [I]notice in R Carter’s original post on the London Breakout 1 strategy RC thanks Edward Revy. [/I]

But…:eek: there is a slight “typo discrepancy” between the R Carter version and the Ed Revy version.

R Carter version reads: [B]With [/B]those 5 candles look for valid swing high and swing low of the price.

Ed Revy version reads: [B]Within[/B] those 5 candles look for valid swing high and swing low of the price.

[B]With [/B]would mean wait until 5 candles - [B]Within[/B] would mean anytime during the 5 candles.

Hope this might clear up your confusion with R Carter’s original post and how folks have been trading it.

Google Ed Revy Forex Strategies Revealed, and look at Advanced System #5.
[I]
Good luck with the strat, it’s a good one for GU & EU!!![/I]

Trying to find a swing high and low within only 5 candles would be a near impossibility. :slight_smile:

Advanced system #5 (Trend Lines Breakout System) | Forex Strategies & Systems Revealed

EDIT:
Aha - I see what you mean. The trendline ois drawn from the previous day but only to a swing within the 5 candles.
Most of us have been drawing from the previous day’s swing to the 0700 or 0800 candle.
The problem is that doing it Revy’s way, the break might happen long before the 5 candles have formed - however, it means it is a valid trendline. Wow, I have been looking at this incorrectly :slight_smile:
Take today’s chart as an example…blue line is Revy’s breakout.
Revy’s system will very often tie in with the Tokyo breakout range I use.


I think the way Cas and I understood the strat was the “swing high or low” within the 5 candles are also moving targets. A new swing high/low at 7:30 should be traded. If an hour or two later there’s another new swing high/low it should also be traded. In practice I don’t think this Strategy is as mechanical as it sounds in the written description. I would go so far as to say it involves a lot of discretion. :eek:

edit: Yes, I see from today’s chart that both Tokyo breakout & Revy’s trend lines tie together nicely!

That’s fine but there is a difference between:
(a) connect the previous day’s swing high/low to the 0700 candle (or 0800)
(b) connect the previous day’s swing high/low to the 5 candle range’s high/low.

More often than not the trendline may come close but not always.
I personally do think the Asian session range can be influential and act as SR before the Pivot points sometimes but that too can be traded on PA alone.

I always thought closing after 3 candles was a bit bizarre? Why not just aim for the PP but I understand it’s a time factor related to momentum and influx of money.

Thanks d-pip and sanmiguel, that helped clear things up for me a bit, and I can see that your trend lines are similar to mine. 3 more things specifically and I will leave you alone! :slight_smile:

  1. Lets assume that we are able to find a swing high and a swing low within the 5 candles that we target. How far back is TOO far back to qualify for a useful trend line? I.e., if the nearest swing low for the previous days charts that will give us an upward sloping trend line is more than 2-3 days back, would it be useful?

  2. What if I’m able to find a qualifying swing high within the 5 candles that we target, and I draw my trend line and it is broken through… BUT… there is no swing low within the 5 candles? Should I still go for the trade of the line that was broken through, or should the trade be voided because one of the conditions wasn’t met?

  3. Lastly, how often does this trade pan out for you? It seems like for me most days no trade develops for this. It seems like something to check for every night HOPING that the trade develops, and that the nights in which it does occur would be more like lucky nights to catch the trade more so than an every night thing… your thoughts?

Hi,Muthu;
My first trade with your system.It is succeed.


I didn’t enter when it broke above as I was already long using the cowabunga system. I did catch 40 pips when it broke below. I’m about break-even with this strategy after experimenting for about a month but I think I getting better.

However, my question is how should I calculate the daily pivot points? What time frame are you using? Would make sense to use London open to London open?

Ardasu, your chart was much better at first when you put it in your post. Charts attached to posts are pretty much unusable.

Hi, BlackSwan ;
I couldnt find to post my chart easyway.This site’ s attachment system is not user friendly.

Use the manage attachments link.
Alternatively, use ImageShack and upload a picture then put the link in here.

Hi ardasu,

Good to know you won this trade and it is not my system. It is somebody else’s :slight_smile: Btw I lost today’s trade and i will post chart to show what happened.

Muthu.

I took the trade at the break of the upper trendline. My target was four pips below the day’s high (supposed to be 1.62620). Unfortunately I had a fifth digit on the target (1.62624). I didn’t realize it until price reached 1.62620 and retraced leaving me so close to the target and yet not there (0.4 of a pip ! ) I should pay more attention to Five digit price data. Eventually as we all saw the huge bear news candle knocked me out. Lessons learnt !

Regards,
Muthu.
Chennai.
India.

I donot know if this is the reason. However i zoomed out the chart and drew a trendline like this and this is what i see. Appreciate your valuable feedbacks on what you think about it.

Regards,

Muthu.

Where did you set your SL this time? Bottom of the candle you entered? My target was 6261 nice to see our targets were close.