Win ratio

Beginner Questions
1035

Just this month, a bunch of new folks have joined our group. By my reckoning, here are the people who have posted on this thread for the first time in August:

[B]bezzy, Bleek, NBOXER, Firstfx, Iono, profitforextrader, Merchantprince, seans, barron, Jack B PIP, hess, sem1074,
and MikeTye[/B]

If you guys haven’t gotten a formal welcome yet, let me be the first to say: Welcome to the group — we’re glad to have your participation.

Some of you are new to this group, but not new to forex.

Some of you, on the other hand, are relative newbies in the world of forex trading; and, like most newbies, you probably find time-zones in the 24-hour, worldwide forex market to be confusing. For you, and for future newbies who might join us, I’ve decided to post a table showing local times in 12 time-zones for the “Overnight Period” (which we use for our trading set-ups).

I’ll post that table in my next post, later this evening. Then, in about a month, I’ll start posting [B]changes[/B] to the table, because…

Starting in late September, we will have to adjust to new times as countries around the world change from Daylight Saving Time to Standard Time, or vice versa.

[B]Time changes will take place on 4 dates this fall:[/B]

September 27 — New Zealand goes onto southern hemisphere Daylight Saving Time

October 4 ------ Australia goes onto southern hemisphere Daylight Saving Time (see note 1)

October 25 ----- Europe and U.K. return to Standard Time

November 1 ----- U.S. and Canada return to Standard Time (see notes 2 and 3)

Notes:

(1) Australia except: Brisbane and Western Australia.

(2) U.S. except: Arizona, Hawaii, and U.S. Virgin Islands.

(3) Canada except: large parts of Saskatchewan, and small portions of British Columbia and Quebec.

All this is confusing, but the good news is that beginning November 1, after all these changes have occurred, Europe, the U.K,
the U.S. and Canada will all be back to the same time differences (with respect to one another) that we have right now.

If we take it one step at a time on the dates listed above, I think we’ll all be fine.

I’ll post the first table in a couple of hours.

Clint

1036

The London Overnight Breakout Strategy is based on two time periods in the trading day of the GBP/USD pair:

B[/B] a 10-hour “Overnight Period”, which roughly overlaps the Asian session, during which the GBP/USD typically consolidates
in a narrow price range, and

B[/B] a Breakout Period which can occur anytime in the 5 hours, or so, following the Overnight Period, but typically occurs around the start of the business day in either Zurich or London.

Each night, we analyze the breakout opportunities for the next morning, and we do this analysis during the 10-hour Overnight Period. Then, at the end of the Overnight Period, we place entry orders for the breakouts we anticipate during the following morning. The Overnight Period is the key to this strategy, and knowing the correct starting and ending times for the Overnight Period is essential.

When Trevor first introduced this strategy, he specified the Overnight Period as 7pm-5am London Time, and left it to traders in other locations to figure the correct time period in their own time zones. Because this can be confusing — especially in the
spring and fall, when many countries go onto or off of DST — I decided to prepare the following table showing local times in
12 time-zones for the Overnight Period used in this trading strategy.

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1037

Hi Clint,
great info for people without GMT platform.
InterbankFX as a feed is GMT, therefore you just trade in the GMT range regardless of your local time.
Of course there are other feed provider using GMT. :slight_smile:

1038

Great stuff, Clint! Thanks once again go to you for clarifying this for the newer traders just beginning to implement this strategy.

1039

The Long View

It’s a good idea to keep long-term trends in mind, even when we’re trading very short-term price moves. Here is a series of charts showing the GBP/USD over the past 14 months, with close-ups of the present, to put things into perspective.

[B]This is a Daily chart from 6/26/08 to the present. From 7/15/08 until 1/23/09, the GBP/USD was in a significant 6,500-pip downtrend. Then, beginning on 3/11/09 and extending until the present, the pair has been in a significant uptrend (the yellow channel on this chart).

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This chart is a zoomed-in view of the previous chart, showing channels within channels. The orange channel is a more gradual uptrend, in effect since 6/3/09. And the green channel is the retracement which has been underway beginning on 8/5/09.

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This is a 1-hour chart showing the green channel in more detail. Notice how the pair bounced off the lower boundary lines of all three channels (yellow, orange and green) at the same time, and then moved up to establish a new upper green channel boundary line.

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This is the 1-hour chart scrolled to the right to show the pinch the GBP/USD is getting itself into, between the lower boundary line of the yellow channel and the upper boundary line of the green channel. Before the close of business this week, the pair will have to break out of one (or both) of these channels. Your guess is as good as mine as to which channel (or channels) the pair will respect.[/B]

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More later.

Clint

1040

Clint,
Thanks, this tread is really becoming a good overall education. Your detailed explaintions and charts are a great help to us newbies.

1041

Sunday Night Overview:

Here’s a 15-minute chart showing an overview of the past two-and-a-half days.

As you can read from the chart, I think we should use 1.6465 as tonight’s Period LOW (unless a lower LOW is made before the end of the Period).

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Here is the Calendar of Scheduled News Releases for the coming week, from Forex Factory. There are no high-impact or medium-impact releases scheduled before Tuesday morning. The high-impact House Price Index shown on Tuesday will probably be released on Wednesday, or later.

I had to reduce the Calendar to fit this page. If you don’t want to squint, click this link for a full-size view:

Forex Calendar @ Forex Factory

(If you want the complete Calendar (all news items, and all pairs), remove the filter.)

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More later.

Clint

1042

Hi All,
Long 1.6554
Short 1.6465

That’s the best I can do tonight. :slight_smile:

See you all later

1043

I’ve noticed tick volume unusually low the last 4 days, any idea why ?

1044

Jack,

Thanks very much for the encouraging words.

1045

Hi, Oskar

I agree with your Long. My Short will be 1.6459 (based on the chart as of right now).

Go get your beauty sleep.

1046

Notes on the London Overnight Breakout Strategy for Monday morning:

I don’t like the persistent upward movement throughout the Sunday Overnight Period. I’d much prefer to see a flat pattern, trending horizontally — something to break out from. But, it is what it is. And I think it’s trade-able.

As I mentioned earlier, I think we should use the low (1.6465) from the 15:15 GMT Friday candle as the Period LOW this morning.
If we use this as our LOW, then we have an 80-pip range for the Period, which is a little wide, but trade-able.

Resistance and Support for Monday morning:

R – 1.6624 – August 21 high – VERY STRONG
R – 1.6610 – August 20 high (news spike) – trading platforms may differ – STRONG
R – 1.6600 – century mark
R – 1.6593 – August 18 high
R – 1.6568 – August 19 high – STRONG

s – 1.6450 – August 20 low
S – 1.6430 – August 10 low and August 11 low – STRONG
S – 1.6418 – August 21 low – STRONG
S – 1.6400 – century mark
S – 1.6389 – August 12 low – STRONG
S – 1.6375 – August 19 low – STRONG

Scheduled News Releases: none

The Period HIGH is 1.6545 (bid). The Period LOW is 1.6465 (bid).


Entry Orders:

BUY (HIGH + 9 pips) 1.6554, SL(30) 1.6524, TP(20) 1.6574

SELL (LOW - 6 pips) 1.6459, SL(30) 1.6489, TP(20) 1.6439

Our little group has a lot of new members, so I think I should repeat the “disclaimer” I used to place on every post:

[B]This post is intended for general guidance only.

This is not a signal service. Be very careful, if you choose to trade my numbers.

You should learn this strategy, do your own analysis, and trade your own numbers.[/B]

Good luck this morning, guys.

Clint

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1047

Hey guys,

I have been reading everything in this thread for the last couple weeks and experimenting with your system. It seems pretty good. I am fairly new to forex and have been reading everything I can get my hands on, as well as experimenting a lot with different techniques before I start trade larger amounts of real money.

I was just wondering, was there ever a concensus on what the best stops and limits were for this system? I am assuming that not too many people stuck with the 30 stop and 10 limit, as 1 hit basically wiped out the whole week for you, if not more. I have seen a fair amount of talk of 30 stop and 20 limit, and others talking of 30 stop and 45 limit. So, I was wondering what “most” people go with? As far as I can see, if a 10 limit worked for you, chances are a 20 or 30 might have worked just as well, because of the nature of the breakout. Any thoughts?

1048

Stopped out again :frowning: -30 pips

1049

a few pages back there was some mention of the TP and SL, generally I am thinking in the 20ish to 40ish using smaller values on sunday night monday morning and a smaller lot size too, last night was a good example of why you should be more conservative on monday morning.

lost pips last night, conclusion:
Clint said it. the range wasn’t narrow enough, and I’ve said it before, you need something to break out of. I think from now on, for me, I will be modifying the system to look for a more narrow range. and possibly skip monday mornings.

And also start putting more effort into anther method I’ve been looking at
red MAs and traffic lights look pretty good :slight_smile: cryptic eh? :slight_smile:

1050

hi mike how did you get stopped out what tp was you using

1051

Took babypip punch just below the sternum, took my breath away.:smiley:
(3-6 -2 pips live)- 20 tonight in 1.6457 out 1.6477.Just put my mouth piece back in and lets get at them tommorrow.:slight_smile:

Everybody have a great morning!

1052

20 TP and 30 SL, decided to try being a little less greedy but my TP was still a little too high I guess as I missed it by 3 pips I think it was!

1053

Yeah, I was trying to suss out the charts early this morning and it looks like we were just short of the TP. From my eyeballing it, seems either a 10 TP or a 40 SL would have worked (I can’t tell for sure, though, as my FXCM Micro chart erases the order after it closes). But who would want to risk that much on the sketchy Sunday/Monday overnight, especially when it was looking the way Clint described?

I do still like the 20/30 ratio, though. It just seems this strat works best when there is a clearly defined narrow corridor to break out of, as Talon said. Unless the indicators look really good, I believe Sunday night will be a night to either skip altogether or go lighter, with smaller lot sizes or the more conservative 10/20 ratio.

1054

Grabbed my 20 pips last night, with a 30 SL on a sell order. I was a little worried because it was early in the night and I wanted to go to bed.