Win ratio

[SanMiguel]

Firstly thank you all for your kind comments

with trailing stops you need to be carfull that they dont actrually cause you to get stopped out to soon, you will need to macth an ideal tariling stop to your plan in line with your take profit target i have tried trailing stops however overall they did not improve performance dromasticly as one day i get lots of pips and the next day i got 1 pip so you need to stream line it so it benifits you

I agree. I tried some of these out with stepped trailing stops as well and it is very difficult to get right - you will find yourself stopped out at some point anyway even if price does go further. My advice is forget about what you could have won and concentrate on a strategy that gets you pips consistently.

I’ve tested 186 trades based on 30SL 30TP and 9 buffer and got 59% winners. When I take out Fridays, I get 62% winners on 149 trades. So it appears worthwhile to take an early weekend.

Very interesting.

A few more details please.

Did add a 9 pip buffer on to both the buy and sell. Would you results change much if you used a 6 pip buffer on the sell side.

What time periods did you base you sell and buy price on and when would you enter your trade?

Did you have to run the test manually or did you use some program to calculate those numbers? If you used a program, what program was it?

Did you try using 30SL and 20TP over the same period (with 9 pip buffer on buy and 6 pip buffer on sell)? If yes what was the percentage of wins?

We did some of this very early on if you check back through the first 10-20 pages. Phil and TREV backtested manually, there are also some automatic MT4 tests showing results of the different strategies. I may re-rerun these at some point to get up to date figures for the last 3 months but it’s not dramatically different. For example, I currently run with a 22:45 strategy and am averaging about 45 pips a week.

GBP/USD

* Draw two lines, one at 19:00 London time and one at 05:00 London time; you now have your overnight time frame.
* Draw two lines, one at the highest price between the two overnight times and another at the lows.
* Count 6 pips above the highest price and set a pending order to buy there.
* Count 6 pips below the lows and set a sell order at that price.

[B]we are looking for around 6 pips above and below the highs and lows correct however on the high you need to account for the spread so 9 pips is ideal if you have a 3 pip spread [/B]

this stratergy has a good entry, you can change your exit rules to suit your trading, when i first started this i was using a Tp of 10 and a SL of 30 however i use more of a 30/50 now days
[B]
dont worry about what the win ratio is over six months its not important what important is your money mangment skills ie what risk to reward ratio you want to use and how much you risk of your overall capital in any 1 trade[/B]

It�s important that these pending orders are set by 5 a.m.London time; otherwise you will most likely miss out. And once the first trade has taken place I cancel the other, so it makes my day short and sweet.
[B]
its not critical these trades are set bang on 5 as it normally takes a hour or 2 to break but its good to get up and to some chart analysis so we know ware we are and what happend overnight [/B]

I sure would like to know who’s trading at that time because this is largely dependent upon them. The breaks seem to happen often around the 5-6am GMT time when neither Frankfurt or London are open.

[B]what i suggest is demo for a month with us follow clints (CLINTS A GOD AT CHARTING) advice and follow the discusion and you will pick things up as you go along, hopefullly all will become clear as it not a overally complicated stratergy
[/B]

welcome and hello

+1

[Merchantprince]

I am still trying to feel my way around these complicated time calculations. For my North American East Coast TZ I should be drawing my verticals at 16:00 (3 pm) and 24:00 (midnight), is that right?

[Clint]

I am still trying to feel my way around these complicated time calculations. For my North American East Coast TZ I should be drawing my verticals at 16:00 (3 pm) and 24:00 (midnight), is that right?

[B]2pm (14:00) and midnight (00:00) EDT.[/B]

Those times correspond to 7pm and 5am London time.

(16:00 is 4pm, not 3pm, by the way)

[seans]

Very interesting.

A few more details please.

Did add a 9 pip buffer on to both the buy and sell. Would you results change much if you used a 6 pip buffer on the sell side.

What time periods did you base you sell and buy price on and when would you enter your trade?

Did you have to run the test manually or did you use some program to calculate those numbers? If you used a program, what program was it?

Did you try using 30SL and 20TP over the same period (with 9 pip buffer on buy and 6 pip buffer on sell)? If yes what was the percentage of wins?

Yep, 9 on buy and sell. I don’t think the results would change too much with 6 on the sell, perhaps a little. I did it manually and changed the timeframes when required to confirm success or failure.

[Clint]

Monday night set-up — an overview

Here’s a 15-minute chart showing price action in the GU since just before the start of last Thursday’s overnight period. The pair has established a ragged downward channel, but seems to be telling us it wants to break out of this channel to the upside.
Also, price action since this morning shows upward pressure on price.

The horizontal lines already drawn on tonight’s period are tentative — we still have more than 3 hours to go before the end of the period.

Stay tuned.

[Oskar]

Long 1.6397
Short 1.6318

I probably will adjust my entries a bit later on the high side.

[R_Carter]

I dont see price breaking below1.6344 tonight. My entry long. My TP1 is 1.6412. Second 1.6446 probably tomorrow.

[TalonD]

already set up my sell for the evening. Still think it may go higher so waiting a while to set up the buy.

1.6344 see I missed it again MAs I need to pay more attention.

ok, got my buy set up, looks like it’s headed down…

[ReaperKK]

I think I’m going to set my sell and buy orders right now, doesn’t look like there will be much movement, I’m exhausted from today and I can’t stay up any longer lol.

[Clint]

Notes on the London Overnight Breakout Strategy for Tuesday morning:

The Monday night set-up is straight-forward. The price range is reasonably narrow at 69 pips. The GU is still signaling an upward bias. But, leadership of this market changes hands (from Asia to Europe) between 04:00 and 06:00 GMT, and the bias could change at that time, as well (although I don’t expect that to happen).

Resistance and Support:

All of the current resistance and support levels are previous lows (with the exception of the century marks).

If the price rises toward previous lows, those lows (which were previous support) become resistance, but not exceptionally strong resistance. That’s what I see above the current price level this morning.

On the other hand, all of the support levels below the current price are previous support, and they are strong (or very strong) levels. Market participants know this, and factor it into their near-term bias. That bias appears to remain upward.

R – 1.6500 – century mark
R – 1.6483 – August 14 low
R – 1.6424 – August 12, 18:00 GMT candle low
R – 1.6400 – century mark

S – 1.6310 – July 22 low – STRONG
S – 1.6300 – century mark
S – 1.6278 – August 17 low – VERY STRONG
S – 1.6264 – July 17 low – STRONG
S – 1.6231 – June 25 low – STRONG

Scheduled News Releases:

At 08:30 GMT, the British Consumer Price Index (CPI) year-over-year figures will be released. This report has the potential to hold the GU in a tight range until traders see what it reveals. That’s potentially bad for us, because it could restrain (or even prevent) a trade-able breakout Tuesday morning. We should have a better feel for this situation by the time Europe opens (06:00 GMT).

The two U.S. reports coming out Tuesday morning (Building Permits, and the Producer Price Index), although considered high-impact for the USD, probably will not affect our trades Tuesday morning. If the GU goes into a holding pattern, waiting for the British CPI numbers, the holding pattern may continue until after the U.S. figures are released. But, if the British CPI numbers do not interfere with a normal London breakout Tuesday morning, then the U.S. figures will not interfere, either.

Here is the calendar of news releases, considered to be high-impact for the GBP and USD, for this week:

The Period HIGH is 1.6393 (bid). The Period LOW is 1.6324 (bid).

My Entry Orders for Tuesday morning:

BUY (@ HIGH + 9 pips) 1.6402, SL(30) 1.6372, TP (20) 1.6422

SELL (@ LOW - 6 pips) 1.6318, SL(30) 1.6348, TP(20) 1.6298

Good luck this morning, guys.

Clint

[R_Carter]

Both my TP1 and TP2 hit. Good start to the day

[Letseethepips]

Grinning thru the tears (2-4 -3pips live) In 1.6404 out 1.6382 -22 pips.Iam going now to have a beer to refill these tears.

Everybody have a great mourning!

[Clint]

News Kicker

If you successfully traded long this morning, as I did, know this: you traded the news — not the London Overnight Breakout.

The chart below tells the tale. At 06:00 GMT, when Frankfurt and Zurich took over leadership of the market, traders positioned the GU at 1.6400 in preparation for the release of British CPI numbers (at 08:30).

For the next two-and-a-half hours, the GU traded between 1.6380 and 1.6415, waiting for CPI numbers. See the yellow box on the chart, below.

Then at 08:30 GMT the market reaction to the news was positive, and a 50-pip news spike occurred.

If you hit your profit target at 08:30, you successfully traded the news. That’s what I did.

But, that wasn’t the London Overnight Breakout — the Breakout failed.

[Oskar]

Clint is right, the breakout failed, good we got the news too.

[TalonD]

well I failed. Woke up at 4am EDT, whats that 8gmt? saw that my buy was triggered but down some pips so I decided to manage the trade a little and lost pips, If I had left it alone and gone back to sleep, I would have made my 20. Beginner mistake! Lesson learned. And I should have followed Roberts advice. Although I tried to with a little bit of a hedge but… aparently a hedge doesnt work with Oanda

[TREVPICK001]

Clint is right, the breakout failed, good we got the news too.

i still got my profit target i thought it was going to go against me at 1 point but the news came to the rescue by the looks of it

[seans]

The strategy did poorly between 8 Sept 08 and 10 Oct 08. Based on a 30SL 30TP and 9 buffer it won only 36% over 25 trades.

I’ve been trying to come up with a method of avoiding these periods. There were consistently large ranges between the upper and lower box at the time however, at other times those large ranges have worked well.

Some I’m no closer to an answer. Just thought I’d put it out there.

[R_Carter]

CLINT

As ever, I’m sure your right. I did not trade an overnight break out. Preferred instead to trade price. Saw pretty solid support at 1.663 and went long on the 1h chart. Was up around 40 + pips and saw 3 ma break 7 ma on the 5m chart and hedged my position. Took hedge off at 1.6355 when 3 ma came back through 7 ma on 5m chart. TP1 hit at 1.6412 and sold half and went to bed. TP2 hit at 1.6446 and triggered my limit (asleep). Not sure yet where price is going, pretty strong resistance at 1.6445.

[Firstfx]

Well theres no news like good news. Glad I did not stay up to watch this one.
Success on the buy trade and sell trade now cancelled.

[Firstfx]

[B]News Kicker[/B]

If you successfully traded long this morning, as I did, know this: [B]you traded the news[/B] — not the London Overnight Breakout.

The chart below tells the tale. At 06:00 GMT, when Frankfurt and Zurich took over leadership of the market, traders positioned the GU at 1.6400 in preparation for the release of British CPI numbers (at 08:30).

For the next two-and-a-half hours, the GU traded between 1.6380 and 1.6415, [B]waiting for CPI numbers[/B]. See the yellow box on the chart, below.

Then at 08:30 GMT the market reaction to the news was positive, and a [B]50-pip news spike[/B] occurred.

If you hit your profit target at 08:30, you successfully traded the news. That’s what I did.

But, that wasn’t the London Overnight Breakout — the Breakout failed.

Clint,

Do you think the failure to breakout was caused by anticipation of the news? In other words if the news had not been there than the breakout would not have failed.

By the way great analysis/chart of the trade session.