Note: This post will be updated from time to time as I have completed new trade contracts.I am currently interested in Forex trading because it is less risky compared to binary options. I received a free eBook about this strategy called London Breakout Strategy so I decided to test and tweak it so that I will master this sole strategy. It is very simple strategy and it is no secret that this strategy has been used for decades by any level of traders. It works specifically well due to the nature of London market open.
I will divide it into different cycles. The idea of calling it a cycle is because it aligns well to risk/reward ratio and money management plan. For this season of the year, GBP is supposed to move an average of 100 pips per day so I will take 50 pip movement during a trading day as my TP level and 25 pip risk as my SL level. Any details about this method of trading Forex will be posted in written or video format if I receive many requests to reveal to all the readers on this blog.
A cycle consists of 10 trades. With risk/reward ratio of 25pips/50pips, I need only to win 4 trades among the ten to realize profit per cycle. However, there will be inevitably exceptional situations when profit is more than 50 pips or loss beyond 25 pips along the way. Do not worry, though; our goal is only to realize pips gained from each cycle. Additionally, I am not going to calculate in money term because it is just demo account. So it is about pips gained or lost.
Trading Cycle 1
Trade No. 1: Buystop and sellstop are opened. Then buystop is activated. Sellstop is cancelled. Profit gained 80 pips. The time start is 4 AM EDT. The price suddenly moved up to achieve more than 50 pip target. So I closed trade for 80 pips in profit.
Trade No. 2: buystop is activated but price moved down back to hit the stoploss of 34 pips.
Trade No. 3: the trade time is at 3 PM in Cambodian time. Buystop is activated. The price hit 50 pips in profit in less than 1 hour of trade activation.
Trade No. 4: buystop activated. price hit 50 pips in profit in about 4-5 hours.
Trade No. 5: Sellstop activated. price took a few hours to hit entry but then price started to move down. Half way market pulled back a bit and then continue to go down to hit the TP.
Trade No. 6: Sellstop activated. Market reached 50 pips in profit but the platform didn't stop the trade. However, still in profit 20-30 pips.
Trade No. 7: Sell stop activated. Price moved in profit 50% but moved up until stoploss was hit.
Trade No. 8: the price almost moved up to touch buystop level but then moved down to activate sellstop level. In 5-7 hours, price moved to hit 50 pips in profits! The price then continued to move down another 50 pips before becoming ranging at the end of London session.
Trade No. 9: sellstop was activated in 4-5 hours. The market seemed to be quiet and impacted from some unknown factors. Price moved almost to hit 50 pips in profit but didn't. Then moved back up to touch SL level. (Loss)
Trade No. 10: the price touched the buystop level but moved back down quickly and becoming ranging in the zone for many hours. This day the market seemed to be affected by traders indecision to trade any direction for GBP ahead of BOE rate announcement. After the announcement, the rate decision is still maintained as previous one so leave the market still in ranging. Then moved down to touch SL level. Loss for this trade.
Win/Loss Ratio: 6/4
Cycle 2
Trade 1: buystop and sellstop were opened at 3 pm Cambodia time. The price took about 3 hours to hit sellstop. After 3-4 hours, the price hit TP of 50 pips.
Trade 2: Loss of 25 pips
Trade 3: Win of 50 pips
Trade 4: Loss of 25 pips
Trade 5: Loss of 25 pips
Trade 6: Win of 50 pips
Trade 7: Loss of 25 pips
Trade 8: Loss of 25 pips
Trade 9: Win of 50 pips
Trade 10: Loss of 25 pips
Note: though we won only 4 of 10 trades but we are still in profit.
One lesson learnt: we don't need to be strict about the pips for loss, it depends on the market and candles there. We should look for a good breakout level and set TP of the ratio Risk/Reward 1:2 but make sure your TP is not over 80 pips because we don't expect the price to move over 100 pips for a day.
Hi Maria, May I know how many pips are your stops from the current price?
ReplyDeleteHello, my name is Nara. I usually set 25 pips when I strictly set my take profit to 50 pips but it may go to touch stop level early before moving into our favor. However, the other option which I think is even better is to place stop above or below 3:00am EDT candle wick high or low and then set your take profit at the risk/reward ratio 1:2.
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