A Simple London Breakout V.2 (A Simple London Breakout V.2) - MT4/MT5 Resources

I had to adjust my thinking a bit to accommodate this strategy because before we were worried about catching the breakout and that was it. Now we will eliminate the reversals that are bothering us to help offset any full reversals we will encounter and prepare trades that are already in place when the breakout occurs. Now, we won't catch every breakout, but that's okay because we won't sacrifice discipline for profit, and greed doesn't pay. Here you can find a revised version of my simple London breakout strategy. After some complications arose in dealing with reversals in the original strategy, I sat down and studied past charts to try to find better ways to take advantage of the days when we were stuck in a range. What I want to accomplish is to try to mitigate or at least minimize the loss from being stopped out due to a reversal after our initial entry.

As I work through other projects, I go back to my original strategy and I notice something going on that we can take advantage of and make the work work to our benefit. I also found some ways to try and help protect our profit taking. What I see is that we often hit entry points and then magically reverse immediately. A good friend suggested that this might be because I started too early (the first strategy was to end when the Frankfurt Open opens at 7:00 GMT) and that I should include the whole hour and start when the London Open opens, as we might get a false spike from the Frankfurt Open. He also suggested maybe trying to use old entry points as targets. I have to give rjlacha some credit because I remember he opened a thread a while ago and used the edge of the box as his entry point and I thought that might work.

Therefore, with the help of sqaulou's extraordinary coding skills, we developed a modified version of the London Breakout indicator for everyone to use (sqaulou is currently developing a new EA for this strategy, which will be launched later after being properly tested). What we did was use the box edge as a new entry point, much like how rjlacha used it, combined with a 3 tier profit target setup to capture points early in the trade and still be able to gain more points when the breakout occurs. It's no secret that I'm a big user of the martingale technique, which is inherited from the first thread but with a slight twist that I'll explain later when I give some examples. Therefore, in the next few articles I will show examples of perfect setups, reversal setups and how we can profit in different situations.

The biggest difference of the modified indicator is that the "MaxBoxSizeInPips" parameter is now "MinBoxSizeInPips". The reason for this is because our first profit target is not far from the entry point and we don't want the spread to eat up all the profits. Since parameters change, it is better to use currency pairs with smaller spreads. You can use currency pairs with wider spreads, but make sure to increase "MinBoxSizeInPips" appropriately (default is 25). We really want to stay away from the big box beyond 100-120 pips as target 1 will be difficult to reach and stops will be very expensive when we get a reversal. We have included a level 3 profit target in this indicator to help traders visually understand when to close a position and when to adjust their stop loss. The default collection time is 05:00 to 08:00 GMT, we will not do any new transactions after 17:00 GMT on Friday as we don't want to get stuck in any gaps over the weekend. In fact, if you show any signs of profit, I recommend closing your trades and not holding them over the weekend. If your broker is GMT +0, you don't need to make any changes. However, if your broker is GMT +2 like FXCBS for example (which is the broker I will use in the example), then just add 2 hours to all times. I use FXCBS because their prices have very low spreads . You can check out the spreads of most brokers here to see where they stand compared to others. I've attached this indicator to the first post along with the template I used.

I will only look at 5 currency pairs on the 15 minute chart:

EUR/USD, GBP/USD, EUR/JPY, USD/CAD and GBP/JPY.

GBP/JPY is my experimental currency pair and increased the minimum box size to 35. I will provide setup examples using all currency pairs, but I will only post trading examples for EUR/USD to save time. I'm sure everyone will pick it up quickly and be able to read other charts on their own.

*Before we begin, as a courtesy please refrain from commenting on the nature of the martingale strategy. By now we are all aware of any inherent risks involved in using them and don't need to be reminded over and over again. If you are one of those people who hates the martingale strategy, go ahead and don't spoil the thread, this is obviously not for you. Also, please don't flood the post with "you should have done this or added this" or "this would be better" comments. I want to stick to the original strategy post, but if you want to experiment with the setup and add other indicators, feel free to do so, otherwise it will confuse those who want to follow the original premise of the strategy, thank you.*

***renew***

Well, our brilliant coder sqaulou modified the indicator and added two new functions. Well, actually, one function is the old function that was added back later, and the second function is the new function.

The first function he added back to the indicator was the "MaxBoxSizeInPips" function. This is similar to the "MinBoxSizeInPips" parameter, which draws a red box that says "No deal!" when the box exceeds "X" number of pips

A new function added to the indicator is now called "LimitBoxToMaxSize". What it allows us to do is limit the tradable box size to "X" number of points when the standard box size is too large. The indicator will then calculate and center the box based on the median EMA consisting of the 12 bars of the box. This way we start with a box that's not too wide but centered.

Examples are shown in posts 62 and 63. I have updated the template to use the new version of the indicator.

***renew***
8/17/10
V3.1

sqaulou and I added two (2) target levels to the LBO indicator and posted them below along with the new template. For those traders who like to keep their trades going, this is the one for you. A neat option sqaulou added here is that when you set "TPFactor5" to "0" the indicator will only show 3 targets instead of 5. So you basically have 2 indicators in one . He also added a "BO" annotation (for Blake Out ) below the box to help differentiate between breakout strategies and the new counter-trend strategies that are coming soon.

You will only see the input of TPFactor5 in the indicator parameters, since TPFactor 4 is calculated in the same way as TPFactor2, that is, by adding targets 3 and 5 together and dividing by 2. By default, target 5 is set to the 3.618 Fib extension. Feel free to change this to whatever you like to use. He also fixed it as a location for the weekend draw area.

***renew***
1/1/11

I made some changes (from article #988) on how to close trades and emailed sqaulou to see if he could update the EA with these new changes