London Breakout Strategy - 1H Timeframe Modified

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101

Hey Clouds, thanks alot, have gone through Q and A posted by my winningstars,they are making sense, educative and innovative, sand-much like thanks to you Clouds and others Who have taken part

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102

I have backtested the eurgbp using this specific strategy, my findings are:

Winrate: 42%
R:R- 1.5:1

103

Hi Izner, thanks for the comment and input. How long did you back test for and how many trades?

104

Great strategy Cloud. Just one observation from me regarding the SL and TP levels. Iā€™ve noticed a few times the breakout trend has continued beyond your TP level. Would it be more profitable to put a trailing SL in place and keep moving the TP in proportionately? That way losers would be smaller and winners bigger.

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105

Hi Shaunakam, thank you for your comment and input.

You are definitely not wrong, SL and TP is always as sensitive subject because I donā€™t think there is a right or wrong answer to it. It all comes down to the trader and his/her decision.

You are right in terms of there are quite a few trades that go way beyond my set TP level, but you cannot expect to catch all the pips and you have to also keep in mind that these currency pairs used for this strategy are incredibly volatile, it can swing up and down a candle like mad so IN MY OPINION, if you set a trailing stop, then it raises the question of whatā€™s the right distance so you donā€™t get stopped out early? If you decide to move your SL up as it goes, then you have to be around to observe it.

I used to set my TP at 2.1 R:R actually, but I also realise that a lot of trades either donā€™t get there or just miss the TP then swing down to below the 1.5 R:R level at the end of the day, which then results in loss of potential pips to be earned.

But for me, this is a set and forget strategy. Once I have my trades in, I forget about it and check back in the morning and close off any trades that are still open if have not hit SL or TP regardless of whether itā€™s in profit or loss. For me, as my R:R is 1.5 at a time, I can win 50% that week and would still come out ahead in profit.

Again, as I have mentioned before on this thread, everyone trades differently and I guess it all comes down to what suits you best personally.

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106

Thanks for the reply. Totally understand your position and agree with you about everyone being indvidual with our own unique circumstances and setting strategies accordingly. GL with your trading.

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107

I am following this strategy and I have to say it is very good and easy, but in today session 3 pairs already hit the stop loss. However one is still running. But it is due to the news, today was NFP.

So, I think this is very interesting strategy and everyone can change it according to their own experience. But for me, we should not trade it on news days.

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108

this is really good. iā€™ve been looking for day-trading strategy for a while now and i think this is the closest one i can find that works. although win rate is only around 40-50% based on the back test i did on EURGBP AND EURUSD, taking partial profit (60-70% of my position) while letting the remaining run to hit at least twice as much as my set SL covers all the losses with some extra to banked in.

thanks for this Cloud!

Iā€™ll test this in my live account for a month and see how it will turn outā€‹:wink::+1:

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109

Wow! Thanks for this Cloud!! Question,
-How can you get the session indicator if youā€™re not using tradeview?
-also, is it the 3rd candle before the london session starts? I keep getting confused. Ie, if the London session starts at 10am(my time)do I use the 8am candlestick?

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110

Hi Cloud, I went through your charts, steps and most of the comments. Thanks for your help. You have a lot of patience!!! I am from UK and my platform is IG. I will start testing from next week. I think I understood most of these instructions. Just to be sure I have few questions. Hope it will not irritate you or anybody else.

  1. Can you give one live example with picture, entry point, SL, TP and Closing point please?
  2. Please mention the number of pips lost or profit and how it translates to $200 or $330.
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111

Agree, especially on NFP days

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112

Yup - understand your explanation. Youā€™ll be glad to hear that iā€™ve moved my SL closer :slight_smile: ā€¦but not up to the range as you have it, just yet. It seems sensible but I will wait a little longer before I bring it further closer. Not much move today above or beyond the range, so just closed on near break even. See what tomorrow brings!

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113

Can you please explain this in a step-by-step pattern? Please you can use diagram/charts for easier understanding. Thanks in advance

114

Thanks a lot for sharing this knowledge. But do you take LEVELS(support, Resistance, trend line or moving averages) & TREND into consideration into account in this strategy?

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115

Hey Haseebahmed, thank you for your comment and input.

To be honest with you, massive news day and especially NFP, itā€™s not just this strategy but rather most experienced traders would know to either:

  • Tighten their SL and TP on existing trades or
  • Stay out of the market entirely

So yes, like anything else, when massive news hit like the NFP, itā€™s better to stay away from trading this as I did yesterday which paid off when all 3 trades would have lost (wouldnā€™t have traded EURGBP since itā€™s so choppy the whole time and wicks pointing everywhere). If you decide to trade, then be really cautious with it and go small.

I still trade on other days though, but just have had bad experiences with NFP in the past that I choose to sit out when thereā€™s one.

116

All the best Soundscape8 and thank you for your comment! :slight_smile:

117

Can you please make it more elaborate with charts? Thanks in advance

118

Hi msMichiri, thank you for your comment.

My best suggestion would be for you to actually get Tradingview - itā€™s free and the indicator I used to determine the session is literally called ā€œsessionsā€ 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 :slight_smile:

119

Hi Supshin, thank you for your comment.

For your questions:

  1. I assume you donā€™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.

  2. 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, Iā€™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 itā€™d be 75 pips. So if it hit my SL (50 pips) - Iā€™d lose $200, if it hit my TP (75 pips) - Iā€™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, Iā€™d win $180 (thatā€™s $4 x 45 pips)

It can be quite confusing but I hope this help in explaining it for you.

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120

SamDavies, please donā€™t let me (and I know you wonā€™t anyways :stuck_out_tongue_winking_eye:) 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. Thatā€™s the key that eventually leads to a profitable path in trading.