Hello.. I am fairly new to this forum but I am frequent on the yahoo metatrader and sbfx forums... I am making a request for a breakout strategy I have been manually testing for a couple months... It is rather simple... I got the idea from another successful trader.. The system only trades from 13:00-17:00 gmt or 8-12 est... First thing that needs to be done is the high and low need to be found for the euro session.. I like to take the high and low of the period of 7-13 gmt or 2-8 est... when these are found, at 13 gmt, the system begins.. Place this on a 5min chart... When a bar CLOSES +10 pips above the high, place a buy order on the open of the next bar. When a bar closes -10 pips below the low, place a sell order on the open of the next bar. Now the (+-10) is experimental but seems to work fine so far. It can be experimented with. Secondly, this EA should place an order for 3 lots initially. The tp for the first 2 lots should be 10 pips. The last lot will be kept running for those huge breakouts. When the tp of 10 pips is hit, 2 lots should be closes and the last lot should be trailed with a 10 pips ts. The SL for the system should be 15. All trading stops at 17:00 gmt unless their is an open trade which you should just allow to run. This allows for some pullback and then a continuation which happens a lot, especially if there is a big move. I have an ea for this system but it just places stop orders at the desired prices instead of waiting for the 5min bar to close above the desired price which is crucial to the systems success. Any help is appreciated. This is a simple system but very profitable.. thank you to all contributing.
PS I just realized I posted this in the wrong section... Sorry
Did a little number crunching and manual chart testing on your method and looks VERY PROMISING.
20 trading days studied (Dec 2-30)
12 days were over +20 pips (ranging up to +103 pips)
7 days were between +6 and +19 pips
1 day never triggered a trade
Looking forward to someone doing an EA on this method.
Breakout trading has been tried many time over the years by thousands of successful and not so successful trader. This system isnt any different then HANS system (which is just a replica of many breakout systems) from moneytec or numerous articles related to stock market investing that touch on the subject of breakout trading in general. Switching time frames from one breakout period to another doesnt change the strategy, its still the same. Many even use multiple time frame breakouts, like 2-4est then 4-6 est then 6-8est, etc. Or use weekyl breakouts and daily breakouts of highs and lows. Whatever shape or form it comes it, there is only on issue with breakout trading. This is determining the breakolut has actually occured. Now, since the begining the best way to do so has been to use pricing information in the form of time or pips. In this case, as in most, your using a spread of 10 pips. Some use more advanced methods such as calculating the spread between the high and low of that period and setting a breakout based upon that number. Or some use a more simpler method such as yours and just pull a number from thin air, based upon what weeds out ranging markets more often then not. Both of which are fine, but still have many flaws. The second method would be time based, for example, some will buy into the market after the market has been on a directional basis after the break for some specific time period. Any of which really rarely work in the end.
The only other method of determining (BTW this is all of the top of my head) is indicator based. Now if you do this, you are now officially changing the strategy. You are now using your breakout period as and indicator in itself when you combine it with somehting such as ADX or a momentum indicator to insure the breakout will continue. Any which way, breakout trading has again been successful for many and not so successful for many more.
Essentially, the people you would probably want to hear from most would be pivot traders. They trade in a similar fashion with S/R lines and such. Most systems based around pivots use similar indicators as above. Bubble might want to comment on this.
In closing, again this is just another breakout modifiction. Changing time frames never changes the actuall strat. The HANS thread on moneytec/strategybuilder has 100+ pages to go thru if your interested. Most is rubbish rambling but then there is some interesting recommendations. Maybe it can be filtered through and then actually put to good use on this thread.
Just to make it clear, im not aginst breakout trading at all. Its interesting but unfortuanetly, usually requires a very large SL. In come cases 50 - 100 pips. Not the way I prefer trading but might fit someone elses style. GOODLUCK. I will check in and see the progress.
thank you for your feedback. I agree with you in some aspects. A breakout trade will only be successful when a TRUE breakout is determined. I have read and tested hans system and his is very similar. I have also studied several other time period breakout systems that involve a lot more analysis. Hans system is a bit different in the way it enters trades. It does not wait for the actual close of the bar. This may sound somewhat insignificant but it is very important. Since the high and lows are most of the time the S/R, the price will sometimes spike up +10 pips but will not stay there for long. This actually keeps you out of several losing trades. 5 minute bar closes might be too small of a tf but 15min might work better. This system is simple but through actual live manual testing for 3 months, is successful. An EA would help me test this system without me being there every day.
I was wondering if anyone with programming knowledge could whip up an EA for this simple strategy. I would really appreciate any help automating this and improving it. thank you
have you tried using fibo with this.....i usually set pending orders at one of these levels...never had a failing trade for like 2 month. use maybe adx to confirm price will continue move in the same direction and pull out when u know what.
This thread is 2 YEARS OLD!
just realized asfter posting.....