Do you think this strategy works?

[jammixmaster]

What do you guys think of this strategy? It's not mine, I got it from another site, does it seem profitable?:



At 10PM GMT check for the high and low prices for this hour for GBP/USD for example
The high was 1.9884 and the low was 1.9865

All you have to do is to choose the 1.9865 which was the low of the hour and add 10 pips to it, so it will be 1.9875

This is your buy entry order, so you place a buy entry order @ 1.9875
your target is 60 pips which means 1.9935 and SL is 1.9835, you need to use trailing stop 10

On the otherside you place a sell entry order as follows, add 40 pips to the
buy entry order = 1.9875 +0.0040 = 1.9915, this will be your sell order

So Sell entry order @ 1.9915 TP (60 pips) = 1.9855 SL (40 pips) = 1.9955, you need to use trailing stop 10

If the buy order is executed and didn't reach the 40 pips, this means that the sell order won't get executed, so you need to add a rescue sell order the stoploss of the buy order which was 1.9835

So rescue sell entry order will be @ 1.9835 TP (60 pips) 1.9775 SL (40 pips)1.9875

All opened orders to be closed before 10PM GMT next day, which means no order to exceed 24 hours, no rollover

I usually use 5 lots for each order

 

[london_lad]

First of all, it is not clear. Now let's see.

What if your buy order is executed, goes to your stop loss (-40 for you).
At that time, right at your stop loss, you have what you call a "rescue stop loss", yeah that one gets executed and then goes back to your old original buy level where you get stopped out (-40 for you)
Then price keeps going up and your sell order is executed, and goes beyond your stop loss (-40 more for you).

Ofcourse, this is worse case scenario, but is not very uncommon right? So in order for this strategy to work at all, you are basically betting on the sequence of events within a tighter range.

Why dont you try the rangebreakouts only on longer timeframes? go long 10 or 20 pips above the high of previous 5 /10/15/20 hourly candles with a stop loss at the middle of that range or low of previous candle?

 

[Ingot54]

It should work

First of all, it is not clear. Now let's see.

What if your buy order is executed, goes to your stop loss (-40 for you).
At that time, right at your stop loss, you have what you call a "rescue stop loss", yeah that one gets executed and then goes back to your old original buy level where you get stopped out (-40 for you)
Then price keeps going up and your sell order is executed, and goes beyond your stop loss (-40 more for you).

Ofcourse, this is worse case scenario, but is not very uncommon right? So in order for this strategy to work at all, you are basically betting on the sequence of events within a tighter range.

Why dont you try the rangebreakouts only on longer timeframes? go long 10 or 20 pips above the high of previous 5 /10/15/20 hourly candles with a stop loss at the middle of that range or low of previous candle?

London Lad -

Given that you are in the USA and come under the new NFA rules, this strategy could work. The new First-in-first-out rules prevent traders from being long and short at the same time. But you did say your sell order is 40 pips above your buy order, which wouldn't be in play unless the buy order fails to be executed.

Jammixmaster is right - it is not clear, and although he describes a good case where this could go bananas on you, I think there would be many occasions where you might succeed.

If you could post a couple of demo trades here, I am sure it would become clearer, and we would be able to see the effect of the NFA rules ... if any.

Cheers mate

Ivan

 

[Jack Hughes]

Probably not, but you'd need to define what 'works' means.

 

[tomorton]

Hi jammixmaster - I think we got a bit mixed up with the numbers and terms you use. Could you explain in words your objectives?
This looks like a bracket trade (i.e. you don't have a view on which way the market will more likely move, so have a buy order and a sell order in place to catch a movement through whichever is hit first and ride the continuation). Yet you have a buy order below the high, while your sell order is even higher. Or are you trying to catch a range, by buying near the lower boundary and selling near the upper?

 

[BulldogFX]

Jammixmaster,

I think you may be on to something, but not sure. Have to work it out in my head first.....If you want you can call me and we'll go over it. I like a new challenge.

Give me a ring or send me an email.

Chris Wilt
212-537-9440
[email protected]

 

[jammixmaster]

This is not my strategy. I got it from another FX trader on another forum. I just wanted to know if it could work in the real world but thanks for all your input guys.

 

[london_lad]

I am not from US. I dont know how to change my timezone on this forum. Anyway, it does look like a bracket/straddle trade with some additional twist on it. I just don't understand it.

 

[puregold24carat]

It should work quite well in my opinion . Its a combo of bracket / straddle with a slice of lemon to spice it up. Worth ' testing ' it out . Logic dictates it will pay out more often and perhaps a right way to trade when important data about to be released.