The overnight range is rather big today, and that looks more like a short-term trend than a range. I’m out for today.
Notes on the London Breakout Strategy for Monday morning:
I will not trade the Strategy this morning.
In my opinion, the channel that the GU has been in will dominate price action over the next several hours.
I expect a test of the lower boundary line of this channel, and I’m guessing that the boundary will hold.
Therefore, I don’t see enough running room below Sunday night’s LOW to attempt the LBS Strategy on the downside.
Instead, I will trade the bounce off the channel lower boundary line, by going long at 1.6583 (ask).
Since I expect the channel to hold, I will place a 30-pip SL below my entry price (20-25 pips below the lower boundary line).
Because Sunday’s range (HIGH - LOW) is 93 pips, I think there is plenty of running room for a 60-pip profit target.
If I am wrong about the test of the channel lower boundary line, I will probably have no trade this morning.
If the boundary line is tested and fails to hold, I will lose 30 pips.
This is not the 150-200 pip trade I described in the previous post. This is a pull-back trade with a modest profit target.
I am not posting the usual S/R levels this morning.
There are no scheduled news releases this morning.
The 5-minute chart below shows the entry point, stop-loss and profit target for this pull-back trade.
I don’t recommend this trade to anyone else. But, if you choose to try it, be prepared to actively manage this trade.
Clint
Clint,
Great idea.
Good luck!
Well, I just tried to make that trade and totally got my ass handed to me. I waited for a pattern to develop similar to what I’ve tried to learn from Tymen’s candlestick thread and went long on a Bullish Morning Star Doji at the 06:00 GMT candle on the 15m chart.
Instead I lost a nice big chunk of my account thinking I’d finally called something right. What was I thinking, the only guarantee something will go up in this business is if I bet it will go down. :mad:
using the small narrow range near the end of the overnight period would have been sucessful to the down side. I still say you need a narrow range to break out of. even if it means ignoring the original overnight beginning time. see the attached pic.
In Tyman’s candlestick thread doesn’t he state that the shortest time frame one should use is the 30 min chart???
I like this idea. It might be so that the momentum in the middle of the night is strong enough to continue in the same direction a few hours later. If this is true, then you might be able to use the ordinary rules, but just use the shortened box and only trade in the direction of the momentum. On 9/11 the strong momentum took place even closer to the end of the box. Both of these would have given the box amount of pips nicely.
I don’t know if this kind of setup is rather rare, I couldn’t spot any other instances of this. 8/31 was sort of, but not quite. I need to watch out for this.
the only thing about using a smaller narrower range like that is it takes less of a price move to trigger your order so maybe smaller SL and TP is in order there.
if you zoom out on a 15m chart on metatrader, you’ll see price was trending down through the night since yesterday, even though it flattened out some and retraced a little during the night. So that happens, a continuation of previous trend. maybe something to take into account when doing the overnight breakout.
This pic shows the last 2 days, you can tell the London/NYC hours by the increase in tick volume.
and you can see the downtrend that started yesterday morning
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Hi Clint,
Thank you for your contribution to this forum!!
Since you have been trading the break out system for long time, with your experience , what is your SL and TP ? Also do you enter to the other side of the channel if stop out on the first break out? Thank you Clint,
Best regards,
Jacinto.
Should this questions not be asked and posted in Tymen1 Candlestick Trading thread?
I definetly understand that it should have been posted there. I am new and was just trying to help where I can because I read what so many of you post and help me. I figured if I posted there, he would not find it! Anyways my apologies!
[B]The London Breakout Strategy worked perfectly this morning, if you were wise enough to use it.[/B]
I wasn’t. I tried something different, and got burned.
If you followed the Strategy as Trevor first proposed it, you made your 10 pips early, without any drama at all.
If you used any of the various modifications to the Strategy which we have devised over the past few months, you made your
pips with hardly any drawdown. In fact, [B]you could have set up your entry order with a 10-pip SL and any TP up to 60 pips[/B],
and you would have been successful, if you were patient.
This Strategy continues to work, although not with the 98% win-ratio it once had.
I’m going to step away from this thread for awhile, to clear my head, to re-examine this Strategy and its variations, and to
pursue some other trading opportunities.
I will continue to trade the London Breakout Strategy when I see a set-up I like. I will continue to read this thread on a regular basis. And, from time to time, I might post a short message with my buy/sell entries.
But, I won’t be posting nightly charts and analysis for awhile. If someone else would like to take on those duties, I’m sure that many members of this group would appreciate your contribution.
Good luck trading the London Breakout Strategy.
Clint
Whether it’s a good strategy or not you’ve given us some great examples of how to analyze and chart things. I think that has made the whole thread worthwhile.
Thanks for that Clint
Agreed. Thanks Clint for all the work you’ve done in this thread, it is much appreciated.
EDIT: Woot, 100 posts! \o/
my range for the evening so far 1.66005 low to 1.66275 high.
Starting at about midnight GMT
Thanks Clint, appreciated and will miss the charts and the “friendly teasing” too. 
Hopefully will see you around on this or other threads.
Tonight
Long 1.6636
Short 1.6548
and see you tomorrow.
Same here, thanks Clint! I have been peeking in but the last week life has been getting in the way of my trading.The method as turned into a mixture of breakout and support and resistence lately.I never been as paranoid trading as i have been doing this method.It is uncanny how it creeps up and grabs those triggers, with that said iam not that far from breakeven trading this method(-35 pips).Clint i still look forward to your insight in this thread and on this forum.
Anybody on the GBP/USD train? I didnt trade it because of the news this morning.