Because GBPJPY had a large lower wick I thought it Might be hard for it to continue down, so again moved SL to around 100 points profit. It closed out at 101 points profit.
At this time EURGBP was already in a loss situation so I let it go according to the rules. It did hit SL.
So another profitable session.
I am applying knowledge of wicks and previous support and resistance levels in making these decisions.
It means I am watching the charts rather closely for a few hours.
Not what the original strategy was about.
But hey a profit is a profit at the end.
I look forward to continuing my learning and applying it to earn more profits.
Thanks for everyone’s help, especially Cloudninee.
“Fall down seven times, stand up eight” Japanese proverb.
I did a fast sloppy BT on GBP USD and got 7:4. Nice!
I have read the first 160 comments but I still have one simple question:
Is there any deadline for the breakout? I mean this might happen really rarely but what if it need 5 or more hours until the breakout? I guess you are asleep then? ^^
BTW, Off topic: Is cloud 9 the place you are, when you fall in love? This would be interesting, because we in Germany call it cloud 7 (Wolke sieben). We don’t get that high, lol.
No particular deadline for the breakout but, as a rule of thumb, maybe towards the end of the London session at the latest? This simply works out best for me because if I am trading this, it’s between 5PM to 1AM my time. As you can see I won’t be staying awake during the NY session so I won’t even bother trying. Rather make the market work for me than me it.
It all depends on the range as well, there can be two scenarios:
The range is too big - of which the price would be consolidating in between and finding it hard to break through - I’d avoid trading altogether as there may be many false breakouts.
The range is too small - typically there should be a breakout within the first few hours of London open.
For the name, my real name is actually “Cloud” and “Cloudninee” is just a nickname that I have been called my whole life
I have been watching & reading your thread for quite a while now, and I can say I have successfully automated your strategy based on the criteria you gave us on this thread, however I have a few things to say + a few questions for Cloud. again, this is what worked for me PERSONALLY. This ain’t the holy grail:
Despite it being a profitable strategy, I adjust it so that I gave the breakout 2 hours everyday to “break out”, otherwise no trade. I did this to filter out delayed London momentum trades, but what do I know?
If the body of the breakout candle is twice or more the size of the range, no trade is taken as that means there’s a high chance I’ve missed the breakout.
I gave the body of the breakout candle a 2 pip lee-way, because what I noticed is price would present a rather large engulfing candle but it would still be JUUUST within the range. So by shrinking the range by 4 pips I wouldn’t miss this. Again, this is a double-edged sword as it might backfire.
Instead of just selected pairs, try all pairs. The net P/L should be positive in the long term if you risk 0.1% per trade.
Questions to Cloud:
How do I adjust this strategy for winter time? Do I examine push all my boundaries one hour to the left (-1) as in winter the London session is delayed?
Have you tried using 2 or 4 candles to identify your range? If so how did that work out?
Do you advise taking half profits at 1.5R and trailed the rest to the most recent high/low?
Man/Woman, you’re like a river of knowledge. God Bless you and I wish you the best of luck Cloud!
I only have one thing with point number 4 - where you think to trade all pairs with this strategy. Of course, I’m not saying that’s wrong or advising against it but, you really have to watch out for pairs that are not majors or minors as they might not be moving ideally for this strategy. Of course, if you have backtested it and it works well, go for it.
For your questions, honestly, as strange as it sounds, I have never really paid attention to adjust when it comes to wintertime. I use Tradingview and I use the session indicator and away I go, never really thought about it.
TP is a subjective and sensitive subject as it’s different for each person. Each to their own. I’d suggest you do what makes you feel most comfortable. The only issue I see with taking 50% off at 1.5R is if the price then reverses, you’d lose the other half even if you bring it to breakeven, and then it won’t be enough to cover for another potential lost and some more like a normal full 1.5R would - if that makes sense.
Clarification: by all pairs I meant the 28 pairs from the most used currencies in the world: AUD, CAD, CHF, EUR, GBP, JPY, NZD, USD
Taking Half off doesn’t make sense now that you’ve put it like that. But with Pairs that have huge momentum cutting wins at 1.5 might not be a good idea.
I am honestly really unsure about what to do.
Also, Have you experimented with using the ATR Indicator to give you the stop loss size in pips instead of the other end of the range?
Re the pairs - that makes sense. All good there. No exotic pairs I’d say is ideal.
The 1.5 RR is very achieavble and that’s the main point. As I have mentioned here earlier, it’s a strategy where you don’t have to constantly watch the charts, just check at the near end of every hourly candle and away you go. If you want to move your position you’d have to watch it constantly which is something I hate to do personally.
I’d suggest to do some backtests and see it for yourself of what works best.
ATR is a great tool BUT, you have to also keep in mind that the Asian market is very quite, and once the London market opens and picks up, the ATR might be telling you of a much lower number than what it’s actually going to be in the next few hours, because if you use the standard ATR, it’s looking at data from 14 candles back only which would be all the candles in the Asian session along with a few from the previous NY session which would be very low in volatility anyways. On the other hand, if during the Frankurt session (just before London opens), sometimes the prices picks up and have huge candles, then it throws the ATR out as well and your SL might be even bigger than the range itself. It’s a tough balancing game and the exact reason why I hate using the ATR on lower timeframes than 4H or 1D.
Having the SL at the other end means that if the price decide to reach down that way, then really the market have won, not much else you can really do about that. If you want to be more agreessive, you could set it at halfway through the range but a slight pullback into the range would trigger it quite easily.
My Results are not that great yet, but I am not sure if chose the correct time for the london session, I will Live test that with Demo today. Because the time in BT might differ to live time, I have never really watched that. Edit: I got some Bugs, following findings might be incorrect.
very interesting, at the current state of my EA it looks like it is better to extend the zone then to shrink it.
E.g.:
-2 pip extension has better results then no extension
-4 pip extension has better results then 2 pip extension
-6 pip extension is to much!
(still putting the SL to top/bottom of the Zone without extension)
Giving the Breakout Candle a Body Size of at least 5 pips and a maximum Wick of 45% of the Body Size has also improved the results.
Sorry for the late reply. But yes, seems like you’ve got it there.
I’d recommend Tradingview if you can get it as it does help with this. MT4 or MT5 displays are usually not as good chart-wise.
Those breakouts seems to be pretty good to me. Although GU was a bit of a worry there with the SL since the second candle’s wick was crazy long to the down side.
Interestingly I placed all my trades against the daily 20EMA.
This was because the H1 was strongly against the trend, and the H4 was also against the trend.
EURGBP and GBPJPY were not moving as quickly, so I decided to lock in some profits and moved the SL to the top/bottom of the current wick at the time.
EURUSD I moved the SL to a 150 point profit level.
As it turned out all three of these pairs continued on to hit the original TP levels.
Hi All,
This strategy was a 100% profit day on 28/09/2020 Monday.
But yesterday 29/09/2020 was a Loss day (GBP/USD, GBP/JPY and EUR/GBP were Loss and only EUR/USD was profit, overall Loss).
Did your finding match with mine please?
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