Before I write what I am about to write, I would just like to say that I have absolutely no intention of letting this turn into an ICT discussion, and if it does, I shall abandon this place forever. This is what it is and anyone is free to use, or ignore this information, as they see fit.
That said it would also be appreciated if anyone has a valid opinion, or correction, of how I have used, or indeed mis-used, the information or concept. [B]REMEMBER THOUGH[/B], we are discussing a possible trading strategy here, [U][B]NOT[/B][/U] a person.
Ok then, here we go.
A couple of weeks ago a thread was started in Newbie Island by SteveB called ICT London Open. This was the first post of it:
I apologise right now to SteveB for stealing his post!
This was the first answer to that thread:
Now, before I start, I’d just like to say that I NEVER watched any of ICT’s video’s, so what I have done may well be wrong according to the methods that anyone was supposed to use.
But these two posts had me wondering why no-one had actually ever tested, live, and recorded the results of that test, any of the ICT concepts, and since the London Open was the concept that had been brought up in this thread, I thought I would go ahead and test it.
This is the parameters that I used, like I said at the start, I ay well have done something wrong and if I have, please feel free to tell me. Also, I would appreciate any comments as to the worth of this research of “strategy”
I went back to the start of 2011 and in that year there was 260 trading days. I back-tested the 7am-8am Hourly candle (on EUR/USD ONLY) and the 8am-9am Hourly candle.
Whichever direction those candles were broken (long or short) I tested to see if price then moved 10 pips in profit and also 15 pips in profit, so 4 tests in all. I also used the opposite end of the candle broken to place my stop loss. So the question really was, "Once the candle was broken, in either direction, did price move 10 and then 15 pips in profit, before price, at any point of the day, reversed and moved above or below the opposite end of the broken candle? Got that? Didn’t think so LOL!!
I will also over the next week or so test 2012 and add the results but for now this is the results of the 2011 test.
[B][U]7am-8am Candle:[/U][/B]
10 pips = 78.5% win
15 pips = 72.3% win
[B][U]8am-9am[/U][/B]
10 pips 85.8% Win
15 pips 78.8% Win
It should be noted right now that using the opposite end of the candle broken sometimes gives you a risk of 50 pips (sometimes more) to make 10 pips profit and I’m also working right now on what the average risk was before it can really be determined whether overall the strat would have been successful, but I’ll get back to you all on that one.
I have also set up an Oanda demo account and I’ll try to work out how to link it to Myfxbook and test the strat (probably only on the break of the 8am-9am candle for 10 pips), next week.