Simple Daily Breakout System

What is the win% of this system? Profit factor? You only need a week of choppy conditions that will send you back months.

ahaha… what do u thing bro??
U re smarter and rich person than me. And i’m still in baby and u already became King ^^
I know, i’m poor at experience than u. But becoz of that, i learn fx till my limit
So, with my breakout, i have winning percentage around i said before. But only depend on that, dont make me profit. What make me had positive performance is my own system and trading plan. I call that like my name ^
Oh yeah, last week i had large lost and make my drawdown rise upto 1.96%. So, guess how much my risk management…

Hello everyone!

I’m new here and this is my first post. I’m from Romania and I have 6 years of trading experience (4 years stocks experience and 2 years fx). Right now I only trade the forex market, gold and s&p. My strategy is mostly technical and I love pattern and trend trading.

I love this system idea and I manually back-tested it in this weekend on 4 pairs.
The back-test was made from 17.09.2012 to 11.09.2012 in this uncertainty market and if the system can do good it will be no problem (and will do best) when the market returns to normal.
I started with 20 pips TP and adjusted it to an average of low-low and high-high. Here are the results:


+170 pips with 20 pips TP
[B]+332 pips with 29 pips TP[/B]
+259 pips with 30 pips TP
-63 pips with 35 pips TP


-43 pips with 20 pips TP
+5 pips with 22 pips TP
+26 pips with 31 pips TP
[B]+38 pips with 40 pips TP[/B]


+150 pips with 20 pips TP
+254 pips with 27 pips TP
+276 pips with 32 pips TP
+248 pips with 34 pips TP
[B]+285 pips with 40 pips TP[/B]


+183 pips with 20 pips TP
+188 pips with 40 pips TP
+354 pips with 35 pips TP
+357 pips with 31 pips TP
+329 pips with 30 pips TP
[B]+386 pips with 27 pips TP[/B]

This results are without any management on 4h charts and some trades are 2-5 days long. I try to modify the SL at the next day high/low but this will cut profits especially on reversal days. So no management for me. Instead of that it will require TP adjustments from month to month based on average high-high and low-low daily price based on previously 2 months. It will also require manually back-test once a month and adjust that average TP to cut some looses.

So what are your opinions?

Later edit: I have the results of another pair:


  • 3 pips with 20 pips TP
    [B]+ 336 pips with 35 pips TP[/B]

So we have a total of 1377 pips in the last 8 weeks of trading on 5 pairs. Not bad at all, I will start on real tonight!

Happy trading everyone!

Tell me please what are you setting for sl in your trades and how you check out what a best tp level is? Can you please explain more or maybe show us in some pictures?

The SL is set at previous bar high or low as in the original system and it remains there until the trade hit TP or SL. No management is necessary.

The TPs are calculated as an average of high-high and low-low. Look at the pic, you make the difference between all consecutive lows and all consecutive highs. You sum all that numbers that you get and you divide the result with the amount of numbers you have and you get the average TP. Now that average TP need to be back-tested and where you have big looses you have to think what TP will be ok to cut that loss. If the TP that cut that loss is just a bit lower of our average TP then we will back-test again with the new TP. If we get better results we will use it if no … we use our average and take that loss.

Isn’t that the Average True Range of the last 4 days? for TP?

Heya these are some results from EA designed by Lovac and coded by James.

So far the v7 EA is performing better than the v2, but after only two days difference quite a difference in results, lets see how the EA performs over the next few weeks.

v3 results: Total - 67 pips including one open trade at + 7.8 pips from 9th of November

v7 results: Total of + 58 pips, this is all from the start of the 9th of November

myfxbook accounts:

No, the TP average is calculated for the last 40 days as I explained in the post above… but you may back-test with the ATR4, I’m curious what will be the results.

Yeah, I don’t see where you mentioned 40 days before.

Just so I understand, you take the difference of each candle high/low for last 40 days. Total them and divide by the number of candles (H4 chart=6 candles/day=240) or divide by 40?

No, no, no :))
You take the difference between consecutive candle lows or highs.
As example you have a parity that make in a week 5 lows (low of the day):

day 1: low price - 1.2550
day 2: low price - 1.2517
day 3: low price - 1.2509
day 4: low price - 1.2477
day 5: low price - 1.2405

So you make the difference between day1 & day2 (33 pips) , day2 & day3 (8 pips), day3 & day4 (32 pips), day4 & day5 (72 pips). So 33+8+32+72=145 / 4 = 36.25 (36) average pips.

You only count when you have consecutive lows … when you have a candle that make a new high and next another high you start to count the high to high value and make and average. And all this (lows + highs) for the last 40 days…
DO NOT count from high to low or from close to low/high … that’s not our goal. The goal is to determine how much and with how much probability the price goes lower when break the previous daily bar low and to take that average profit.

Ah ha, thanks for explaining. I get it now. Will make you an indi to auto calc this for you.

:slight_smile: I’m glad that I make myself understood. That indi will really help all of us who will use this system without a trailing stop or manually adjustments. Thanks!

PS: Sunday data is not counted…

Ok, here is indicator. It will make calc for whichever time frame you are on. Possible issue (outside bar) high today is higher than yesterday, it gets added, but also low is lower than yesterday, it also gets added. Am I correct?

found an error, making correction.

Ok, good to go. (1.03 KB)

It shows a very different TP that what I have. I will back-test it tomorrow to see the results.
The main average TP that I’ve got on eur/usd was 44 and the indi shows 120…
Thank you for the indi, I will be back with the results tomorow.

on same timeframe? Must be something I did not understand.

In the meantime, here is a modification that also shows the ATR(40) for each timeframe, 15M, H1, H4, D1 as a basis of comparision to whatever calculations anyone might be getting manually. (1.1 KB)

This is the daily eur/usd chart for the last 20 days(including today). Look how I actually get the average tp.

L1-L2 = 29
L2-L3 = 43

H2-H1 = 7

L4-L5 = 64
L5-L6 = 32

H4-H3 = 26

L7-L8 = 45

H6-H5 = 47
H7-H6 = 37

L9-L10 = 22
L10-L11 = 103
L11-L12 = 54
L12-L13 = 4

H9-H8 = 50

L13-L14 = 27
L14-L15 = 19

H11-H10 = 14

L15-L16 = 27
L17-L18 = 36

So if you observe not all highs and lows are calculated, I don’t know how to explain exactly. You count only the lows that are consecutive and make the difference only between last 2. Same for highs.

After we done that we sum all that difference numbers (L1-L2)+(L2-L3)+(H2-H1)+…+(L17-L18)=686 pips. Now you divide the result with the count of differences in our case 19 and you get the average TP and in this case is 36.

So every time the pair break the previous daily low or high tend to go lower or higher with an average of 36 pips.
I don’t know if you can make an indi that count in this way …

Ok, think I’ve got it now. (1.29 KB)

Go James do you think this indicator could be turned into an EA?

Now that really helps. Thank you very much for this indi!

It really works, I’ve got 164 pips using this system for the last 3 days and now with this indi we can use a dynamic TP that should increase the profits. It will be reduced in periods of consolidation when the probability of looses rises and it will increase in the trend periods and maximize our profits. Should work!

Green pips everyone!

Do you guys think we can turn this strategy into an EA using James indicator and the dynamic TP as mentioned by traderboy26?