Can you please make it more elaborate with charts? Thanks in advance
Hi msMichiri, thank you for your comment.
My best suggestion would be for you to actually get Tradingview - it’s free and the indicator I used to determine the session is literally called “sessions” that you can add to your chart for free. On top of that, you can also change the time of Tradingview to your own timezone so that can give you an indication to start with. Then once you are used to it, you can refer back to your own on Metatrader etc.
In regards to your second question, I am a bit confused there. Why does the 3rd candle before the London session starts matter? I use the LAST 3 CANDLES of the ASIAN SESSION so yes, the 3 candles before the London session starts to determine the range.
Hope this helps
Hi Supshin, thank you for your comment.
For your questions:
I assume you don’t use Tradingview? As otherwise all of my examples and trades I post in here will show you clearly how my trades are taken. You can see there are a slightly red and green shaded areas and in between those are a line which is the entry point - just look closely and you will be able to see it on all pics. Let me know if I can help you further here and/or if you are still confused.
I have a feeling that if you had to ask this then you might be rather quite new to trading maybe? If not, I apologise but if so, I’d urge for you to go through some materials first before jumping in to live trades as an understanding of this equate to proper risk management = not blowing up your account.
Here I try my best to explain it:
- Personally I risk $200 for each of the trade I place with this strategy (this is 1% of my account balance I am using to trade this strategy specifically).
- To determine my lot size, you take amount you are willing to risk / SL pips / 10 - so for a trade with 50 pips SL, it would equal to $200/50/10 = 0.4 lot size.
- 0.4 lot size = $4 for every pips
- My TP is 1.5 times my SL, so it’d be 75 pips. So if it hit my SL (50 pips) - I’d lose $200, if it hit my TP (75 pips) - I’d win $300.
- If it does not hit my SL or TP, I just need to times $4 with how much it has moved in either direction (in loss or in profit. For example if it only moved in my direction for 45 pips which would not have hit my TP yet, I’d win $180 (that’s $4 x 45 pips)
It can be quite confusing but I hope this help in explaining it for you.
SamDavies, please don’t let me (and I know you won’t anyways ) influence your decision on your own strategy, I was just stating my opinon.
Go with whatever you personally feel like will work best and are most comfortable with. That’s the key that eventually leads to a profitable path in trading.
Hi Onans, thanks for the comment.
And no, I do not. This is a breakout strategy and this is how I trade it - simply whenever it breaks a range I follow.
You are more than welcome to alter the strategy however you see fit. If you want to add a MA or any indicator or draw lines or whatever that might help you to filter out trades.
I see this as a simple breakout, set and forget strategy and I typically don’t trade with a whole lot of indicators on my chart - was just never my style.
Do what works best for you personally. I do find though if you add in a filter of any sorts, while it can take you away from some bad and losing trades, it will take away winning trades too. Just got to find a balance.
Hi Sam, did you program your own EA or purchase?
Not sure if i’ve replied to this already as my internet is playing up. Yes myself and another programmer enjoy working on a few EAs together, but mostly for other people rather than for running ourselves. Done over a few hundred over the past year! Hooked on it now!! This London Breakout we wrote for us to run, and we are selling this EA on MQL5 but that’s all I’ll say about that as otherwise i’ll be breaching some forum rules maybe…I’m here to share and gain ideas above all else, as we believe we can code any technicals. I personally don’t wish to be glued to the screen and be emotionally attached in managing trades so EA is perfect for me, especially with young kids and full time employment. We can also pull some fundamentals as indicators albeit harder to implement, even if just to know not to enter a trade when NFP for example (as @Cloudninee describes in his earlier post), but our London Breakout strategy is pure technicals at the moment, and rather straight forward but has all the parameters needed, to run successfully and profit from, I hope! I’ll keep posting here to let you know how I’m fine tuning the parameters and how it’s continuing to perform.
You only wrote out what was in my head already to be honest and so you gave me the nudge to speed up a little. I’ve moved it 50 pips away but i like the idea of possibly positioning it near the range. I may code that in as an option Tempted to test the trailing stop as well but i’m running with Martingale switched on at the moment and so a trailing stop may not be the best combination as SL will be hit more often. Might run more than one instance of the EA just to speed up the testing. Only running MGale as it seems to have a good winning ratio, and unrealistic of having 5 consecutive losses, but of course I understand the risk this carries.
I did not place any trades yesterday due to NFP. Both my long term and short term (this strategy) strategies I try to avoid NFP. Other news are okay but I have had bad experiences in the past with NFP so I just choose to avoid it altogether - both a personal opinion as well as a personal preference thing. I know a lot of people even like to trade the NFP (scalp it etc.).
The market’s not going anywhere, skipping a day isn’t going to hurt me so it’s best to be safe, always.
Hi Sam, thank you, would like to hear about EA
Thanks a lot, Cloud. I will try your strategy from Monday onwards on Demo for few days.
Thank you @Cloudninee for sharing this simple-to-understand yet highly effective strategy with the community!
When I first started Forex trading, I experimented with the London Session Breakout using the M5 timeframe but was unable to find any success.
I will back-test and also forward-test this strategy of yours whenever time permits for me before deploying it in my Live trading account.
@SamDavies Hey bud… I found this NY break out strat. Will test this out. But here you go if you want to test.
Awe man…I cant post links, Its a 15min candle strat…your range will be 1 hour before NY open and 1 hour after open…
I live in Brisbane as well and have a question regarding what actually constitute the last three candles BEFORE the London session opens, given that there is a one-hour overlap in the final hour of the Tokyo session and the first hour of the London session. In Brisbane time, would the three closed candles be the ones that close at 4PM, 5PM and 6PM. Please clarify as this issue has been confusing me for some time.
Hi jatha1, thank you for your comment.
The 3 candles I use to determine the range are the 2PM, 3PM and 4PM candles. So at the close of the 5PM candle, essentially 6PM, I check in to see if it has broken the range. If not, I check back in the next hour and so on.
Hope this helps.
Thank you for your prompt reply and for clarifying the situation for me. I will dosome backtesting over the weekend.
I like this strategy a lot.
Question: do you enter the trade regardless of the stop loss size or do you have a rule that if there has been a big move then avoid the trade? For example anything over 50 pips would mean the trade is avoided.
As i had seen a lot of positive comments and results from this strategy. There’s one question pop in my head . If there’s a extremely good strategy, is it possible for the broker or market maker, counter this strategy?
Thanks in advance.
Hi again, Cloudnine,
I have found a free EA which trades this strategy and has .set files for 9 currency pairs. If interested you can just type VFX London Breakout EA into a Google Search. I tried providing the direct link in this post but it was blocked.
I have missed the earlier chats on here so I’m unsure how the 3 hours are defined. Would be interested to know. Maybe this website helps you find the specific times for you @jatha1 if you enter Australia/Brisbane in to here: https://www.forexmarkethours.com/
Remember to bare in mind the broker time as well. It’s not rocket science but it is quite confusing never the less!