The skippy opening breakout

korrupt_1 · 4 September 2008

I've adapted a strategy found on another forum that focuses on the opening time of the US market.

This one's for our AUD.

Determine the market range for the first 1 hour of trading (ie 10AM to 11AM EST)

Set buy stop orders on the breakout above the high of the last hour
Set sell stop order on the breakout below the low of the last hour

Target 10-20pips. Trailing stop loss to maximise gains if it trends well.

[attached AUD/USD from this morning... this method would have peaked at almost 30pips]

It's not fool proof and needs some polishing so open to any suggestions to improve it.

PS: I've quickly checked to see if this method would work on the SPI... it seems to work alright... but needs more verification.

Trembling Hand · 4 September 2008

My guess is it would be more successfully in the reverse. Just have to work out an entry.

Frank D · 4 September 2008

Korrupt,

Your 10-20pip moves on morning breakout are simply the completion of
the last Range 40-44 pip bars from the previous day and into GMT trading hours....

Where you're taking the break and exitting, i'm taking the Spiral point
and taking the opposite side and taking a much larger chunk.

Below EURO/USD, AUD/USD, JPY/USD

Once the bar has completed 40-44 you move into partial exit strategies depending on the overall trend.

For example Euro and AUD are reversing into the 5-day 50% level, which
can reject price down later today, so you want to focus on exitting
:- shorter ranges

Either exit @ the bar completion 40 pips, or hold...

Whereas on JYP the trend is down, so I have more reason to hold down,
still using the exact same taget and exit.

Rule: Forex moves in 240 minute waves or 4 hour ranges, therefore
if the 40 pip target hasn't reached by the 4 hour block, it's often a
good strategy to take profits.

JYP:- short trade :- At 3pm Aussie time my JPY trade hasn't completed
my target, so I'll partial exit the trade, but move stops to a dollar
stop :- average out my profit and run stops to match nothing to
lose.

Most trading set-ups align with 4 hour blocks, so I don't have to look at forex that often :- 7am, 11am 3 pm 7pm, 11pm..... and so on.

Target Thursday's low, or close to it...

IFocus · 4 September 2008

korrupt this strategy has been around for a very long time or at least variations of it.

I remember seeing it used on the US futures market. I never used it but did follow testing for awhile but found the market had moved on and it stopped working.

Its a good method but the clever bit is working out the market conditions that make it valid. You will find that it comes and goes a bit, good luck

Nick Radge · 4 September 2008

Do a search for:

Toby Crabel,
Opening Range Breakout (ORB), and
Logical Trader by Mark B Fisher

korrupt_1 · 4 September 2008

Nick Radge said:
Do a search for:

Toby Crabel,
Opening Range Breakout (ORB), and
Logical Trader by Mark B Fisher

Ah I see... many names for pretty much the same thing... I found an explaination for trading ORB... very interesting... involves not just the price action of the instrument you are trading, but compares it with other similiar indices/fx and takes volume into account to make sure the breakout is true and valid.

Trembling Hand said:
My guess is it would be more successfully in the reverse. Just have to work out an entry.

Reverse as in you are expecting it to bounce off the ranges, rather than break through it?

Well... I hope this threads brings this method out into the light again - and give some potential winners for some traders.

The orignal thread from the other forum suggests trading USD FX pairs and defining the range 2 hours before the US market opens. This pretty much sets the typical average range before any news announcement is made (usually around 11:30pm AEST). The theory is that if the news is of such importance, it will tend to break out of the range and sets the trend for the annoucement of the news.

Frank D · 4 September 2008

Euro and JPY intra-day

I mentioned earlier regarding timeframes based on 4 hour blocks.

Below are perfect examples....

Euro both 11am and 3pm lows matching spiral low, and now a 7pm top....

I didn't trade the 7pm top because my precise entry was the 5-day
50% level which failed to hit (not by much) and I didn't chase
price down, but probability suggests Euro should reverse min
40-44 pips once under 1.4530.

5-day 50% level rejection has a random lenght but should travel further
than just a minimum range.

Japan Yen:-

As mentioned before regarding a timeframe cover, this is a perfect example of a 'HOOK' trade and rally.

I didn't trade any longs on the HOOK pattern, but trade managed my short....

And simply moved on to the next pattern once again :- short again.

In conclusion:- You just can't trade swing points based on
those timeframes everyday. Things need to be taken into context with
the overall trend of the markets, along with 5-day patterns.

5-day patterns are based on rotation into 50% levels, and then
extend outward as price continues with the trend, or even reverses the
trend.

Hence the reason why long trades were taken on the Euro and AUD earlier today, and taking shorts on JPY.

The most important thing is not money management of the trade, but it's
the entry that is the most critical parameter when trading, along with
trade management thereafter.

Doesn't matter how good your stops are, if you've got s****t entry
techniques you will still go broke.

Trembling Hand · 4 September 2008

Frank D said:
The most important thing is not money management of the trade, but it's
the entry that is the most critical parameter when trading, along with
trade management thereafter.

Doesn't matter how good your stops are, if you've got s****t entry
techniques you will still go broke.

That is controversial Frank. Many an expert have said differently. Especially on here.

Frank D · 5 September 2008

I’ll show you a drawing of me walking through walls. I also have a drawing
of me in my time machine. It’s hypothetical of course; I can’t actually
walk through walls

99% of books are written with hypothetical reference. Just swap the
picture of me walking through walls and show a nice chart.

The majority of books can’t show precise intra-day trading methods,
which means that can’t show precise entry techniques.

What, trade the breakout using a 5-minute pattern???

How many times is that going to fail.

All that is left for these experts is to talk about money management,
and other hypothetical mumbo jumbo.

You know and I know, and every friggin decent trader knows, it’s about
the entry and the trade management thereafter, and not the stop.

As you pointed out earlier…..

“ My guess is, it would be more successful in reverse. Just have to work out an ENTRY.

Frank D · 5 September 2008

AUD/USD Friday

11am trade set-up holding into 3pm timeframe...

Short .8215 target partial exit .8155 or by 3pm, and hold

Either price continues down into Friday's lows, or reverses back up and
takes my trailing stop @ .8200 after 3pm..

I would like to think that Thursday's breakout continues down into
Friday's lows.

~~~~~~~~~~~~~~~~~~

EUR/USD below

Perfect text book patterns on the way down yesterday, ldeal for Euro and US based trades, but bugger if I'm staying awake.

no other trades on Forex....

Frank D · 5 September 2008

AUD/USD & JPY/USD

AUD upswing after hitting exit target +58 , but still holding open position :-

AUD can reverse down and continue lower.

Moved into longs on YEN :- exit all +34 pips…

Trading below the 5-day 50% level, so take the money and run...

barney · 5 September 2008

Frank D said:
I’ll show you a drawing of me walking through walls. I also have a drawing
of me in my time machine. It’s hypothetical of course; I can’t actually
walk through walls

99% of books are written with hypothetical reference. Just swap the
picture of me walking through walls and show a nice chart.

The majority of books can’t show precise intra-day trading methods,
which means that can’t show precise entry techniques.

What, trade the breakout using a 5-minute pattern???

How many times is that going to fail.

All that is left for these experts is to talk about money management,
and other hypothetical mumbo jumbo.

You know and I know, and every friggin decent trader knows, it’s about
the entry and the trade management thereafter, and not the stop.

As you pointed out earlier…..

“ My guess is, it would be more successful in reverse. Just have to work out an ENTRY.

Hi Frank, This post and TH's previous post (and a host of other important posts you fellas have made) actually make me feel really positive, cause I've been studying diligently watching the markets (usually 7-8 hours a day) trying to improve my pretty crappy track record on trading ........... The comments you guys are making actually make perfect sense to me, and the great thing is I am discovering these things by hard work, and a multitude of stuff-ups !!! ... ( Due to my lack of experience I would not have been game to make the statements, but the good thing is, I understand exactly what you are on about) ................

So you guys have made my day ............ and I am starting to believe there is hope for me yet

As I've said before, there are some really important words of wisdom spoken around here, and I take my hat off to you and all those who take the time to share your knowledge ......................

The ironic thing is, that most will probably just breeze over the subtle advice being offered in the above posts and elsewhere, and continue struggling on doing everything wrong/back to front etc.etc. until they stuff up enough times to make start making the "penny drop" ...............

I'm happy to say, my penny continues to be dropped .... All I have to do now is learn how to pick it up .............. Keep up the good work.

Timmy · 6 September 2008

barney said:
Hi Frank, This post and TH's previous post (and a host of other important posts you fellas have made) actually make me feel really positive, cause I've been studying diligently watching the markets (usually 7-8 hours a day) trying to improve my pretty crappy track record on trading ........... The comments you guys are making actually make perfect sense to me, and the great thing is I am discovering these things by hard work, and a multitude of stuff-ups !!! ... ( Due to my lack of experience I would not have been game to make the statements, but the good thing is, I understand exactly what you are on about) ................

So you guys have made my day ............ and I am starting to believe there is hope for me yet

As I've said before, there are some really important words of wisdom spoken around here, and I take my hat off to you and all those who take the time to share your knowledge ......................

The ironic thing is, that most will probably just breeze over the subtle advice being offered in the above posts and elsewhere, and continue struggling on doing everything wrong/back to front etc.etc. until they stuff up enough times to make start making the "penny drop" ...............

I'm happy to say, my penny continues to be dropped .... All I have to do now is learn how to pick it up .............. Keep up the good work.

Have to second your thoughts Barney.

Trembling Hand said:
My guess is it would be more successfully in the reverse.

Yeah, sure TH. I am sure there is no guessing at all going on .

CanOz · 5 May 2013

Came across this little gem while nosing around tonight...

BUMP...

The skippy opening breakout

korrupt_1

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Trembling Hand

Can be found on the bid

Frank D

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IFocus

You are arguing with a Galah

Nick Radge

korrupt_1

Frank D

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Trembling Hand

Can be found on the bid

Frank D

Frank D

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Frank D

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barney

Timmy

white swans need love too

CanOz

Home runs feel good, but base hits pay bills!

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The skippy opening breakout

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