Simple Forex System Trading

Thanks everyone for your kind comments.  I am so glad to hear from you.  I had a spam filter put on the site to filter out spammers’ comments.  Your comments were waiting for me to verify but I somehow overlooked.  I apologized for the delay in responding.

I don’t normally trade British Pound in my daily trading; however, I do have demo accounts set up for a few Pound / Dollar breakout systems.  Over time, what I found was that the pivot breakout systems produce better results than simple breakout systems.  Now, I am using Oanda demo to test, so I do not use trailing stops.  The results are based on very simple set-up with protective stop loss and preset take-profit target.  Stop loss also plays a very important piece in the trading system.  I found that somewhere between 25 and 35 pips of stop loss produced better results in conjunction with the take-profit targets.  The ratio is about 1 to 1.  For example, stop loss 25 pips v.s. take-profit 30 pips, or stop loss 30 pips v.s. take-profit 30 pips.  Not that I meant to change the authors’ original systems, but I was just curious as to what combinations of profit/loss ratio would change the end results.

Again, I invite you to check out these two breakout systems if you are a British Pound / Dollar fan, because I think the creators are brilliant.

It’s a good day as the euro yen 30/30 breakout system was able to gain 30 pips today.  The buy stop, 166.32 was filled at 7:08 GMT.  At the same time, profit was set at 166.62, and stop loss at 166.02.  Profit was taken at 8:18 GMT.  The sell stop was never touched.  Therefore, it automatically expired at 13:00 GMT.  Yes, in Oanda, the expiration time can be set.

I think this strategy looks very intriguing, and it is true that many times the price moves back before reaching the take-profit target after a fake breakout.  The author did not post the testing or trading results on the website.  I didn’t find them or I could have missed.  The strategy was described in details on how and when to place orders.  The win-loss ratio is 1:4, which means it needs 4 winning trade for every loss trade to break even.  However, the author explained why the strategy still looked promising.

The theory from author’s website: 

The Idea- We all know there are supports, resistants and psychology levels in currency trading and those are the places traders usually put their STOPs, especially retail traders. If you pay attention to the price movement, there are high probabilities the price will breakout the supports/resistants or it doesn’t touch the supports/resistants at all. Case 1, a clear breakout, price break the level with little or no retracement. Case 2, a fake breakout, it price the level about 10-20 pips then move back.

From forexmogul.blogspot.com