$* Statistical London Breakout Strategy *$

Keepmypips · February 28, 2013, 5:22am

Hi Jonathan and thanks again for your hard work with the EA…

I’m the one who’s still having the 5 entries issue
(tried with different brokers, actually with Armada markets live account, no orders were sent…) You never commented… Any ideas why?

Thanks a lot!

jsiebern · February 28, 2013, 9:46am

Sorry, I must have overlooked your post!!
I have never had that issue actually so I can’t really tell why it is like that for you. You only have one chart on which the EA is attached right? Are there any messages/errors in the Experts/Journal Tab?

Thanks

pipcompounder · February 28, 2013, 10:49am

London is selling off, about 60 pips positive right now…I need some pips to make up for some of these recent losses!

fawkes792 · March 1, 2013, 2:46am

cools stuff! is there a working EA that has been backtested already available here?

Keepmypips · March 1, 2013, 4:08am

Hi Jonathan,

Thanks for your help… Actually I found the problem… Like always my own stupid mistake… I had the Max_Retries set to 5…??? That was causing it if course…
Sorry for bothering:(

Thanks guys for your hard work the strategy and EA are great!

jsiebern · March 1, 2013, 5:55am

Hi, actually that should definitely not cause your problem. Does it work properly now? The retry function is only for a situation when the order gets rejected by the broker or something, the EA will then try the specified number of times to place the order until the broker accepts it… So that actually should not be the issue

Trid · March 1, 2013, 6:12am

I had seen something similar at forexfactory
They have developed EA too.

pipcompounder · March 1, 2013, 8:18am

Yesterday’s session to session closed at +55 pips!
And today looks really good, up about 60 pips right now.

pipcompounder · March 1, 2013, 10:24am

Hey Jonathan, I noticed the EA actually closed my session-to-session idea at 20:00, which was my close pending order setting.

Does this setting have anything to do with this?

Also_Close_Open=1

I thought this setting was to close all orders, pending and open, at the end of the week.
If if turn it off, will it still close all pending and open orders on friday at 20:00?
Or should I put the close_pending_time to 08:59 to get the session to session idea to work the best?..In other words will it work past 23:59?

jsiebern · March 1, 2013, 11:48am

Correct, if it is set to 1 it will close ALL orders, if 0 it will only close pendings. Good question, I did not take that into consideration developing that function, I will keep it in mind when preparing an update!

pipcompounder · March 1, 2013, 12:06pm

Should I put the close_pending_time to 08:59 to get the session to session idea to work the best?..In other words will it work past 23:59?

Today’s London closed at 20:00 with 45 pips in the bag, not too bad, but this week netted a loss with this because of monday’s near miss.

Also what is the real viability of having probably a new EA just for session to session that doesn’t use pending orders, but market orders set to fire at the ends of a reference candle, and once a market order is entered, then if price comes back where that would be BE +spread (which means a loss the size of spread on sells, no actual loss on buys) a market order closes the opened order and market orders an opposite order right there, instead of waiting for other side of ref candle.
This means if the prices opens a buy at 1.3000 on a bid chart, the with no regard for the spread, if bid price is 1.29999, then there is only a sell trade open, and when bid price is 1.3000 and above there is only a buy trade open. Then when the next session’s ref candle is about to close, close that open order, and get ready for the next session…does this make sense?

pipcompounder · March 4, 2013, 8:31am

I changed my settings on the Session-to-Session idea with the buffers going 7 pips above and below the reference candle and the maxSL as 40 pips. I also put the cancel_pending_orders time as 8:59…this should work for session-to-session, right?

also, Jonathan, if you haven’t already, please reference my previous post about a modification idea using market orders only.

London has an open, hanging sell, today

jsiebern · March 4, 2013, 8:56am

Hi PC

Ummm… I’m not quite sure I understand your idea for the EA fully, what is the difference between Stop-orders and market orders (which would be “internal stop orders” for the EA)? Sorry if I didn’t get that right.

pipcompounder · March 4, 2013, 9:23am

well, to be honest for the initial orders, they could be stop orders, but brokers limit pending order to be 1 pip away or more from market price, and market orders can get around that. The market orders could be used to keep a general rule. To explain the rule, I’ll use the hypothetical example of the price number 1.3000. If price is 1.3000 or above, then the EA makes sure there is a buy trade open, if price is 1.29999 or lower, than the EA makes sure there is only a sell trade open. This means every time the price whips around the 1.3000 handle, the EA will only allow losses the size of the spread…does this make sense? Pending orders won’t work because of the 1 pip rule. Also the EA would only use the Bid chart price, not the trade or ask price.

Keepmypips · March 4, 2013, 12:40pm

Hi jonathan,

Yeah I also thought the Max_Retries setting shouldn’t affect this… but now that I’ve changed it to 1 it works fine…
If I put 2, 2 orders are sent each way…etc… ??

Can’t tell you why though:eek:, but as long as is working now…

Thanks again

pipcompounder · March 5, 2013, 8:26am

Yesterday’s london session-to-session idea netted about 5 pips, today started with a loss, and sell is open.

pipcompounder · March 6, 2013, 11:07am

This is going to look like the last post, but it’s for the following day…

Yesterday’s london session-to-session idea netted about -65 pips, today’s sell is open, about +37 pips positive right now.

pipcompounder · March 7, 2013, 9:40am

Rough week so far, london session started with a very small profit from the session before, and today ranged out…too bad too, because the news this morning after taking out all the stops, is pushing the Euro way up.

discojones · March 7, 2013, 10:46am

I have been lurking around this thread for a few weeks, reading and re-reading and re-re-reading the thread from start to where we are now and I just wanted to dedicate my first post on this forum to the people who have done such great work with defining and refining what appears to be a great mechanical system.

I’m very new to all this and I have not been able to get the EA to work properly on my demo acc however, up until this point I have been very interested in getting a really solid understanding of the system rather than just downloading it and hoping for the best.

Anyway thanks again and once I get the EA working I am hoping to use it on my demo account to get a real flavour for how the system works in real time.

ApexPredator · March 7, 2013, 11:14am

So does this strategy work on any server time? Or does it have to be GMT? Sorry if this has been asked already

pipcompounder:

HERE IT IS!!!

[B]LONDON BREAKOUT–Statistical[/B]

This is a great strategy for people like me who work a full-time day job, and live in America, or other time zones, where it’s tough to trade the whole London session. I can get up for about 5-10 minutes in the middle of the night, set my trades, and go back to sleep…wake up and see what happened. This is very easy to visually backtest for yourself to see the results. I would call it the breakout of the breakout, because the trend often changes after this time in the London session, and this will catch the inevitability of that change.

Time Frame: 1 Hour
Pair: EUR\USD
All trades opened from bid side chart

[B]Please see the EDIT below, as while I left this first post intact, I use a modified version, detailed in the EDIT[/B]
1.Wait until the first full hour of the London open is about to finish, 5-10 minutes before the candle closes.
2. Place a buy stop 3 pips above the high of the candle that is about to close, with TP of 4 pips, with the SL at the candle’s low, or 30 pips, whichever is less.
3. Place a sell stop at the low of the candle with 7 pip TP, and SL at 3 pips above candle’s high.
4. Leave orders open until they close themselves, often, later in the day, the other order gets triggered and statistically is successful, except for Fridays, I never leave positions open over the weekend, close trades at your discretion on Fridays.

[B]2nd Contract[/B]

Now, while this has high probability in wins, the losses would wipe out 2-3 days of wins, so a second order needs to be placed a same locations as the first ones, but with different SL, and TP settings to catch and ride the trend. Start with the SL the same as above instructions, so that when it’s hit, you catch the breakout going the other way. Then, the TP needs to be more than the distance in pips from the top to the bottom of the candle, for good RR, but close enough to have high probability of getting hit. Trailing the stop is good, but just know the price often retraces to the end of the candle it broke from as a retest, so BE stops almost always get taken out. This is the part which I am still experimenting, and welcome any input, help, trying your ideas to make this very profitable, because it can be. It is very possible to end every day for a month in profit, despite a loss every once in a while in between successful trades.

As far as psychological analysis of this method, most other London breakouts focus on the few hours before the London open, while this one waits until almost an hour after the session has already started, and there is still a lot of daily range potential, so it is inevitable for a break at least in one direction, but statistically it’s actually hilarious how many times the price breaks above for a quick 7 pip TP, then goes the other way to hit the other TP, usually going on for 30, 60, 100 pips as part of the trend start the london open is famous for. Look at July’s chart history to see what happened after this candle each day, it’s crazy. July only had 3 losses with this method. Statistically, the price is going to be far away from one of the ends of this candle as time goes by, almost all of the days of a given month, so this method takes advantage of better probability afforded by waiting a little later for breakouts.

So, backtest it for yourself, demo it, see if you find a great area of TP for consistent wins from the 2nd contract trades. Also, this should be super easy to code into an EA for those who don’t want to even get up for 10 minutes in the middle of the night, and and EA would make backtesting the 2nd contract part of the strategy much less time-consuming.

I have not seen much success backtesting this with other pairs, but you can try for yourself, if you like.

Yes, I know the actual realized profit for the first part of the strategy is different for the buy, than the sell, but that’s because it’s statistical for maximum win percentage…usually there is about 10 pips in the account by time the next session rolls around.

EDIT: I have tried some settings as far as “second contracts”…
I actually had three orders in each direction with an initial SL same as the opposite direction’s stop entry order, and with 20, 40, and 60 TP, with a 20 pip Trailing stop. I would leave these orders open throughout the day until late in the Asian session to let them play out. This was pretty successful, but when the SL was hit, it was all three trades hitting the loss, and not that great of risk\reward ratio…so, I’m now using only one entry in each direction with a 30 pip TP and maximum SL of 30 pips, if the reference candle is longer.
Thanks to crisscross for making an EA, which now has many features available to tweak settings, so you can test to your heart’s desire. You’ll have to find it in the thread yourself, as there are updates, and discussion, in which you are welcome to participate.

Let’s compound the pips, guys (and gals)