I have been using the method laid down in the original post. I mentioned about no need for major tweaks. However I do look out for a couple of things, firstly on the daily chart I do check for any major lines of support/resistance based on 100 & 200 MA’s, Fibs and trendlines. If any of these are likely to interfere then I either watch the market if I am about or adjust the TP levels accordingly.
I’ve been demo-ing this method too for about a week now. Seems simple enough. I’ve never used bollinger bands before so I will look into adding those as well
Just wondered what’s happened to Nutrader?
He’s not entered a post since page 8.
If you’re still in touch, I’d like to know if you’re still trading this system or working on something else?
I talked about this to a guy who has been programming systems for years, he says these kinda volatility breakout systems tend to have long tails and also long periods where you don’t make anything or have big drawdowns. So before starting to trade this live (yes, it works now, but he says you need at least 8 years of data to backtest to get to know the system a bit) we’d need to see how it performed in the past. However I don’t have the means to do that myself except manually and the guy I talked to has a really too busy schedule at the moment (he says he ‘knows’ allready what the results are going to be too)
Hey guys I have been working on an ea for this, i would be willing to throw it out there if some one had good backtest ability and can try it out. Its a bit of a small variation, but we could see how it compares. Let me know if interested.
Been thinking of programming this myself. Was forced to change brokers tho and haven’t done EAs before, so I’m currently still evaluating brokers. Long story short, I’d definitely be interested. Isn’t there a possiblity to backtest on MT4? Rgds
can some one please correct me if I am wrong about the London Breakout strategy?
What I do is take the High and Low of the 8 am candle (i.e the second candle after the London market opens) and then draw a high and low based on the 8 am candle and once the market goes past the 8 am h/l in the next hour, I should be following the trend. Is this the correct method?
if it breaks on the low you sell ; if it breaks on the high you buy
thanks, but I am confused about the the Time of the candle, should I wait till the break of the 8am GMT candle? The London market opens on 7 am GMT. So I should waiting 2 hours after the open of the London market am I right?
London opens at 8am (at present GMT + 1hr). However depending on which broker you use will determine which candle you should be looking at. I’m currently using FXCM which lags behind GMT by one hour, therefore on my charts it’s the 7am candle I use. However, my Alpari account is different as the server time is set to GMT. As we are in BST (GMT+1) on Alpari you would be looking at the 9am candle. The easiet resolution is to open MT4 and also search google for a world clock and check what time it is in london.
Backtesting is of course a useful tool to see if a strategy has legs. However (and this is only my opinion), 8 years of backtest results will never be as good as 1 year of forward testing. I would never launch into a strategy based solely on the results of a backtest, regardless of how long the test period was or how far into the 90’s the modelling quality is.
By the way, I mentioned a couple of pages ago that I had backtested this strategy from the beginning of the year. The ‘backtest’ I did was not using an EA on the strategy tester in MT4 but a ‘manual’ backtest from 1hr charts re-creating what orders I would have placed on the day.
Oh and so far in August I’m looking at a gain of 8.8% with just today to go. In total I’m 90.1% to the good this year (including ‘backtest’)
I have done a bunch of backtesting as well on variations of the strategy, and most of them are breakeven or worse. I want to have faith in this system before I run it, but I am having a hard time coming up with supporting evidence. This year seems to be pretty choppy. If you look at the forward tests on the forex morning trade robot system, which is a close cousin to this strategy it is in the plus for this year but not by a whole lot. I have read around too, that the results on the creators page can leave out losses that would bring down his results.
I want this to be profitable, I really do, but this year has shown some ugly numbers.
I backtested this a few weeks ago with some indifferent results. I then backtested using the 9am candle as well. Both together that is. Those results were much better, until I started trading it! I made a profit the first week, but lost it all and then some the next week. So this is what I’m testing currently (I call it the Double Breakout):
- Breakout points at high & low between 8-10am.
- Price must breakout twice in same direction.
- Whole candle (inc wick) must close within spread.
- Enter trade on 2nd breakout, putting SL under/over recent swing.
- Take Profit at 20 pips.
Testing on 3 currencies: GBP/USD, EUR/GBP, EUR/USD.
Anyone still using this?
nope I think system and tread is dead now 
I trade it recently in 2011 … but no it loose its edge …
cheers !!!
I know this is an ancient post. But do you have the link to London Breakout strategy that you used in past?
Cheers.