A very simple Forex system

Discussion in 'Forex' started by Hume1515, Nov 15, 2006.

  1. So is this a good strategy? I don't see anything here at all that demonstrates its viability.

    I see its from Currency Trader in 2004. Fortunately, most of their strategy articles in both Currency and Option Trader magazines these days have some backtest results at least.
  2. I first saw this article back in late 2004 and tested this method on cable, my primary intraday pair. It might offer some potential seeds for a positive expectancy system. But don't expect a magazine (and I happen to like this one) to give away the goods. As described, there are two major problems that I'm aware of.

    1. Like many such ORB methods, it forces you into a relatively unfavorable, late entry point. Both from a risk/reward ratio perspective and from a still remaining ATR perspective.

    2. Contrary to the author's claim, it's not a common setup at all. He was a currency analyst at dailyfx.com, not a trader, so perhaps we should not be surprised.

    As described, the setup occurs only a few times a month, on average. Clearly not practical for most people, by itself. A quick scan of the hourly charts over the past month (since Oct. 15) shows that it occurred at most 3 times -- Oct. 31 (-40 loss), maybe Nov. 3 (win), 8 (-40 loss). The short on the 3rd would have had an MFE of about 58 pips and likely overall gain of not much above 40, the first TP. That, on a messy, 3-months-ago-revisions, pre-election-conspiracy-theory-feeding NFP Friday. We're really, really stretching the rules, to cover 8:30 ET on such a day.

    I'd still recommend the article, for its general info and to stimulate possible ideas in your mind on trading the London open. That is, as long as you are able to commit 5-6 hours, beginning ideally at 6 am GMT = 1 am ET, or are an automated systems trader.
  3. Trade Big Ben with a 5 min chart - and it will work for you (most of the time).
  4. If you actually trade this system, as described, how many trades a month do you get, on average? Could you point to a few most recent trades -- mentioning dates alone should suffice. Thanks.
  5. I trade it every morning.
  6. Since "it" had no trades in the last week and half, you must be trading something else.
  7. Here's the 'original' Clayburg method.

    Use vertical lines or Cycles Lines if you have the tool
    11pm PST for Pound, 5am PST for Euro, watch out for
    economic releases at 5:30am PST.

    following is MetaStock code via Hani:


    {place 11pm Hours on chart then
    second Hours for 5am and use

    StHour:=Input("start Hour",0,23,14);
    StMin:=Input("start Minute",0,59,0);
    EnHour:=Input("end Hour",0,23,16);
    EnMin:=Input("end Minute",0,59,0);

    OR Hour()=StHour AND Minute()>=StMin;
    OR Hour()=EnHour AND Minute()<=EnMin;

    start AND (end OR (start AND Alert(start=0,2)))