$* Statistical London Breakout Strategy *$

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84

Hi Spronx,

Welcome to BabyPips.

The official London open is 8am, so it is the 8-9 candle you are looking at.

You really do need to know the different international trading session times as market activity will change with these sessions. If you are really new, I suggest you work your way through the school of Pipsology. It will give you a good grounding in this and many other topics.

School of Pipsology

85

This morning has a bit over 20 pips in the bag from the sell, which has since retraced back up to original entry point, closing the other orders at small gains.

Some of the market moving news has been getting released during the late Asian session the last few days, with no real news until today for the London\NY sessions, this is the exception, not the rule. The end of the month is near, so the last bit of it and the beginning of October will have major news to be released in the time period this method targets so we’ll just keep pluggin’ away.

88

First of all, I am using MT4 platform.
Second, I am placing pending orders. What this allows me to do is put SL and TP at the same time I am setting the pending order. I put the SL at the same price as the opposite order’s entry at this time. Then, when all 6 pending orders are placed, I go back and put the trailing stop on all of them. On MT4, the trailing stop is nothing more than an EA, which places modify orders, changing the SL, but doesn’t start doing this until the price is already 20 pips positive past the entry point. So, in other words, the trailing stop is kind of like a pending order itself, which doesn’t replace the initial SL, until the trade is already 20 pips positive…this is how it works with MT4, it’s possible it works differently with other platforms. Since the trailing stop works this way, when it is activated, the SL always starts at BE and moves up from there, which is why until that happens, we need the initial SL.

And now, our buy stop order has triggered and hit first 20 pip TP, which activated trailing SL for the other two orders…I will give total pips when I post tomorrow’s results…this is why you leave the pending orders open all day, this move is because of news of Spain approving a “tight” budget.

89

hi pipcompounder,

thanks for the system it looks very interesting.
could you please explain a bit more the trailing stop setup.
I understand that you put 3 buy and 3 sell orders with TP20, TP40 and TP60. If price reach e.g +20pips, the 20pip trailing stop activate on all buy orders OR only on TP20 buy order and it gonna activate on TP40 buy order when price reach +40pip, on TP60 when reach +60pip?
thanks for the answer.

90

I put a 20 pip trailing stop on all 6 orders, even the ones with the 20 pip TP, for now.

91

Ok thanks I understand it. So what I am asking is the 20 pip trailing stop is activating on all three panding orders(TP20,40,60) after the price reach +20pip or on TP40 activating after +40pip, on TP60 after +60pip?
so the Breakeven is 20pip in the trailing stop ea on each pending order?

thanks mate

92

The trailing stop starts when the price is as many pips positive as the trailing SL is set for…example:

20 pip trailing SL…starts when price is 20 pips positive. (this is the case for all my trades)

46 pip trailing SL…starts when price is 46 pips positive.

1 pip trailing SL starts when price is 1 pip positive.

The idea is the trailing stop will be at BE whenever it activates, no matter how many pips you choose to trail with.

93

thanks for the reply, I understand it now. so e.g. for the TP40 buy pending order price reaches +20pip then trailing stop will be at BE. and if price reaches +40pip we have 40pip profit because of TP, but if price reaches only +36pip and going down after we have +16pip profit because SL moved to that level. Is it right?

94

EXACTLY!!! we can capture positive pips this way…BTW, if you read my posts on my progress, you’ll see this happen almost every time.

95

thanks for the help.lets see the market open tomorrow. what kind of trailing ea are you using?

96

Thanks so much! I’m currently at grade 6 in school of pipsology :slight_smile:

That was just one thing I never had clarified in my studies previously, as I thought market open was 9am local time.
This is immensely helpful though. Thanks again!

97

hi mate,

you system is amazing. If we would have an EA which is put the SL to the Breakout after e.g. +5 pip and reenter the pending orders if price hit SL and goes back e.g. 6-7 pips in the reference candle “zone” we rearly have any losing trade.
did you find any working EA for this?
I try to speak with few people who is good in mt4 programming to create this EA.
thanks for sharing this idea.

regards

98

Yea! While this morning’s buy trades lost 80 pips, the sell went all the way to 60 pip TP, 120 pips total, so net 40 pips.
This month, since sept 6, when I started using the 20-40-60 TP, I have netted 480 pips. Pretty good!
This number would have been more than doubled, however, if I had a means of having SL to BE when trades were 7-8 pips positive with auto reentry, should the price hit BE SL and retrace into the reference candle’s zone. This morning’s buy losses were a perfect example of that as they went appx 10 pips positive before hitting SL.

I don’t use an outside EA for the trailing stop, it is built into MT4 platform. I was pointing out it acts like an EA.

Spronx…I just want to make sure you’re aware this strategy waits until almost an hour after the London Session begins, or opens. You may want to do some research on Google to see when each session starts, so that you’re clear on that for your local time…also Daylight’s savings time affects this strategy, because not every country starts it on the same day. For me, I’ll have to use caution between 10/25/12 and 11/1/12, as there is a gap for this time period to determine the reference candle.

100

I should clarify, I’m not a total noob! :slight_smile: I’ve really only just started getting into the study side of forex, but over the last 18 months have been dabbling in options and financial reports and have followed quite a few instructional webinars for binary options. London is currently gmt +1, here in australia we are currently +10. DST starts soon, which means we go to +11 but london goes back to GMT.

I only opened 4 trades following this strategy today, and I netted the 2 selling trades 20, and 40 while also losing the buy trades :slight_smile:

regards

101

Hi Pipcompounder,
Attached the first version of the EA for your system.
I will define the rules how the EA is supposed to operate. I have faced a few problems while backtesting, but i am not sure if it is a problem with the MT4 and the historical data in it. I am continuing the tests and will report findings. I am also going to start fwdtesting it from today. Please try to backtest/fwdtest it and let me know your findings.

RULES:

  1. Please enter your server time for London open
  2. The EA will close all previous pending/open orders 5 minutes before today’s London 1st hour close. Meaning - on 1st October London open at 8:55am London time the EA will close any existing orders for the pair that the EA runs on.
  3. The EA will open 3 Buystops/Sellstops at 8:56am London time. You can set the values (pips above High/Low) at which it should set pending orders.
  4. it will keep chking for Breakeven level.
  5. It will trail stops pip by pip after TSL is reached.
  6. It will reenter pending orders (if no orders exist) until 05:00am London time(next day) if price again reaches somewhere between London 1st hour high & low.
  7. Please do not enter BE level smaller than the spread your broker provides. This EA will not chk for invalid price errors. I will modify the EA in the next version to check for valid price levels.
  8. The Trailing stop level should be bigger than the Breakeven level.

Hope the above rules are almost matching your 2nd contract rules. If any doubts pls ask me.

  1. I think this system has a lot of potential. I have the below suggestions to this system:
    There should be a min & max distance between Buystop and Sellstop. This for cases where the London open hour bar be very small or big. The stop losses shouldn’t be too small or too big.
  2. Currently the EA autoenters as soon as the price enters the region within the ref bar. But I think there should be a buffer of atleast 3-4 pips from the High/Low Value.

Latest version (Still 1.0)
Breakeven glitch solved. Pls test and let me know.
London Breakout v1.0.zip (2.41 KB)

Disclaimer:
The EA must be used at the user’s responsibility and risk. I bear no liability to any loss caused by the malfunction of the EA.

If you make profits I will be glad to accept a share :53:

102

Amazing job crisscross. thank you. I am going to test it today and we can improve from our live experience.

103

I am running the EA on EUR/USD, AUD/USD & GBP/YEN. Three pending orders on each side have opened. But as i mentioned the one hour bar has been quite big which means that the Stop losses on EUR/USD & GBP/YEN are quite big. I am waiting for Pipcompounder’s advice on restricting the SL setting.

Also one or two buy orders haven’t opened as the trade context was busy. I will rectify that glitch in the next version.

104

HI Pipcompounder.

Firstly thank you, for sharing and updating this thread regularly much appreciated.

I have avidly been following your thread on your cool little system. Decided to demo it, out of pure interest. This morning at 8.50 london time( live not far from there:) i set 3 orders each way with 20 40 60 tp and activated trailing stop on them. I took a screenshot of my mt 4 and was hoping if you could give an idea if i have done it correctly. As they say picture paints 1000 words .
Regards

eur usd.jpg700×271 35.7 KB

105

Hi crisscross,

I am testing it live as well now. I have set up BE to 4pip, but EA did not moved the SL to the BE price, however trade was in +7pip as well. Also in backtest it looks like SL dosent move to BE after a given pip and trailing doest start as well after a given pip. I have no error message in journal. Could you please look into it.
Thanks for the great EA.

edit: I can confirm trailing stop did not set up as well after the given pips in live trading

106

Hey Chrisscross,

thank you for your efforts, you have done a grand job… pipcompounder has been talking about ea for like forever : ) lol . As you said the system has lots of potential and i hope in time this will be the answer to the small problem that pipcompounder was facing: ) I will test the system tomorrow and report the findings.

Safe trading :slight_smile: