This great London breakout strategy is a good example of very profitable strategy. It does not use any Indicators.
This strategy is most time profitable with a very high winning rate. You can easily check the strategy by scrolling back in history and manually drawing on the chart lines to see how it performs.
- TimeFrame: 1 hour
- Symbol: GBPUSD
- Risk: MAX 2% of account per order
- Indicators: none but you have to draw manually lines on the chart
London breakout strategy:
Each morning you open up the chart and set it to GBPUSD and then you draw line from GMT midnight to London Open. Now between this time draw an horizontal line from midnight and up until London Open:
- one line goes as upper line which goes at the TOP of the highest candle wick between midnight and London Open
- Second line goes as bottom line which goes at the BOTTOM of the lowest candle wich between midnight and London Open
Now you need to watch when this line is broken or you can set pending order on both lines. When an Pending order is triggered immediately remove the second none triggered pending order. You should set SL (stop loss) at the opposite side of the pending order LINE you draw before.
TP (take profit) target is 1:1 risk / reward to your SL. That means that once your pending order is triggered you place your TP ahead of the order for the amount of your SL. For example if your SL is 30 pips your TP should be 30 pips as well.
When your TP gets hit you have multiple options what you can do:
- can take all the profits
- you can set your SL to BE (Break Even) and let the profits run.
- you can take parts of your winnings, set SL to BE and let rest run for some more profits.
TP is all up to you. But for simple usage just take all the profits on your TP.
Now other things to note is that if your Pending Order does not get triggered until New York Open then you can either delete the order or set your TP to 1/2 of the SL.
Try it out and see if London Breakout Strategy works for you… it did for me. I did try the strategy on other currencies but best results were on GBPUSD.