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feb2865

Morning Breeze Strategy

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Time, patience and practice will make you master this strategy.

 

Any strategy, method, etc, is made as a general fingerprint for all to see. You have to create your own twist on this or any strategy for that matter. As long as you don't considerably distort the heart of the strategy, or use it in some other markets like energies or softs, you'll be allrigth.

 

The strategy was designed to make a quick buck(heavy loaded once you get experience) yes, but notice than once the market establish a direction off the breakout, most often than not keeps going that way, usually in the morning.

 

 

Good, sensible points!!

 

You certainly can't get much simpler than this strategy - no clutter, nice simple rules & good opportunities to compound profits with trailing stops after paring out initial profits (well, on the FX anyway).

 

I'm sure those who use it consistantly will find it very effective.

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From my observation of this strategy on ER2 and YM, I have yet to see it be very effective at all on YM, and very effective on ER2 with a couple caveats.

 

On ER2, I set this up as a bracket trade as soon as I see what the 9:15-9:30 range is. The buy/sell on the breakout is an OCO order I set up in Ninja. One of the things I like about ninja trader is that is can be set up to then automatically manage a trade beforehand, and I have found it effective to use a setting where I have an initial 1 point stop loss and 5 point target, and then once there is .70 profit it moves the stop to entry +.20, and trails every +.70 (locking in .50 profit every step). Doing it this way has kept me out of losses on the reversals and yet locked in decent moves at the same time. Today, for example, we had a reversal but I was able to lock in 1 point before that.

 

It can be tough to manage if you cant do it automatically with something like Ninja, because the instrument reverses so rapidly you dont have time to adjust before a .70 profit becomes a loss...and insisting on a minimum 1 point gain can lead to a loss instead.

 

My .02 from experience this past week.

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Here's my observation from the day Raul gave us the seminar. That morning when he made the quick point on ER2, I noticed the market as already moving before the 9:30 bar was printed. When I say moving, the bid and ask was oscillating 1-2 ticks faster than normal (say 1-2 tick moves every 1 or 2 seconds vs. when it takes 2 or more seconds for bid/ask to move). These happen on days with gaps or news from 8:30 was still pouring over and ready to push into the 9:30 bar. Again, this is what I saw that day, I think Raul saw the pace already before I finally got in when the 9:30 happen. I watch the 9:15 bar carefully for pace before anything is committed. Just my observation.

 

This is also the reason why I asked him to be around so he can explain what we see. Without him to explain the pace, we have to observe it ourselves but better with him since he mastered that strategy already.

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Hi all

 

I'm a bit confused about this strategy!

1. Is it for index futures or FX futures or both?

 

Also the strategy in the transcript is different from the strat in the doc, one uses previous day's high/low from 7pm ET and the latter uses the 9:15 - 9:30 H/L before market open.

 

My other question is fills. Is there any experience about slippage and bad fills?

 

thanx

 

rolange

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Wow, nice idea. I am gonna do some backtesting. I really like it.Thanks Raul, that's very unselfish of you. You've definitely given me some great ideas between this and forex. So, thanks again.

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Hi all

 

I'm a bit confused about this strategy!

1. Is it for index futures or FX futures or both?

 

Also the strategy in the transcript is different from the strat in the doc, one uses previous day's high/low from 7pm ET and the latter uses the 9:15 - 9:30 H/L before market open.

 

My other question is fills. Is there any experience about slippage and bad fills?

 

thanx

 

rolange

 

Hi rolange,

 

This strategy as I know of it is used on index futures. The 7pm EST strategy I believe is for Forex.

 

In my experience slippage is not bad and I have never had a bad fill.

 

Hope I was able to answer your questons:cool:

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Thanks

 

Is AUD/USD now not recommended for of the FX trades? Which pairs do you trade if I may ask?

 

 

Wish i could help you out, but I don't trade forex. Torero might know, you could PM him. I only trade equities and index futures:)

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I PM raoul himself a few days ago but no reply

Anybody else able to help?

 

I have a couple of questions about the currency future trading system you talk about in the transcript if I may.

 

1. You take the H and L at 7pm ET and then place an OCO order immediately?

 

2. I notice on some days the previous high and low are taken out so why not put two orders in?

 

3. I the trade breaks niether high nor low do you hold for the next session with the same targets?

 

4. Do you take profit with a market or limit order. As for entering a market order in my experience usually misses the desired price so do you put the market order in 1 or two pips below/above the desired entry point?

 

5. If you are trading 50 contracts are these really all filled everytime with no problems. If so perhaps you could tell me who your broker is!

 

6. Have you tried the strategy on JPY/USD, CHF/USD or CAD/USD?

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Rolange, good questions, I was wondering some of the same.

 

I believe from the links (from Soultrader) in the Forex Room to this strategy that it - morning breeze - is meant for Forex. Of course, in the document it states clearly that it is for indices only.

 

So perhaps not, perhaps use it just for the futures markets.

 

Yet then we have the chat indicating it is used for Forex! Oh, the confusion. I'm glad someone is figuring this out, making money. Maybe just not us, haha!

 

The time, again just my belief given it isn't clear in the document, is 930AM. It does not specify AM in the original document. HOwever, it says in "Target acheived. GPB/USD 11-13-2006" from the Forex Room that people meet to chat at 9AM. I'm guessing they don't gather to *only* chat. Also, he says that he is done by 10 AM EST in the original document. Aha!

 

As for the 7PM EST time, well, isn't that just for an "inside day" (not specified) and the S/R lines carry over from 6-5pm EST as a set-up? If he is saying to trade at the Asian open perhaps I missed it.

 

That would be nice if the Asian 7 PM EST was as reliable as the 930 AM EST trade. I'd like to know that one, too.

 

The TP is 5 pips it would seem from the chat transcript, as the chat is for Forex, along with the 20-25 pip stop... But it is " 1 ER2 point" from the strategy.

 

But he says in the strategy: "No bracket orders OCO orders or stop orders allowed."

 

Put the market entry order AT the S/R level, not before or after, seemingly.

 

Re 5, try Oanda. They can do 200k (money, not units or lots) for one order, just put in the units to get the dollar amount you want.

 

Maybe we can get a crystal clear version of the strategy clearly written for Forex?

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Even if we could clarify the entry points the real concern with this strategy is the risk to reward element. Even though

the ratio of wins and and losses is very good - at least from manual backtesting, the present SL is too great to make it a viable strategy because one loss, a day with a SL of -25 pips wipes out five winning days. There must be another element that I have missed because it doesn't make sense to be trading this strategy with 50 contracts per trade as the transcrpt and results show. I wonder if raoul would be kind enough to enllghten us?

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I noticed that problem with the SL, too. That's a big hit for five days of work.

 

However, let's check out this program of action:

 

Deal a minimum of 2+ currency pairs. This decreases the likelihood of each and every pair being hit. Eg. Do 3 pairs, one hits SL of -25, 2 hit PT, you're only down -15.

 

If SL only happens once a week and you're running 3 pairs at an average of 3 PT hits per week per pair x 5 pips per week = 3 pairs x 3 PTs x 5 pips = 45 pips/week (it may be slightly higher than that, perhaps 60) and only one SL hit per week gives a total of 45 - 15 = 30 pips. 120/month.

 

 

All that being speculated I have no idea what to expect of SL/week or PTs per week. I think I'm close but maybe not bang on. Depends a bit on the pair, too. I presume that with GBP you can set a higher TP.

 

This isn't a big money maker but it's steady, I presume.

 

Anyway, here's a more detailed version of the Forex strategy without having to decode it on the chat:

 

http://www.traderslaboratory.com/forums/f34/feedback-methodolgy-792.html?highlight=srdc

 

The guy who wrote this on ForexFactory; OrangeRoshan.

 

I'll try this soon.

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Ok, either this system just doesn't work or we need more details.

 

I read this system last week and tried it this week. Either I'm extremely unlucky or...

 

On Mon-Tues I enter 3 trades, on EUR, GBP, AUD. Each go through and hit their PT but I should note there was quite a bit of struggle for each. For something that is supposed to break through decisively there was a lot of languishing about. Anyway, PTs hit: fine.

 

Last night, Tues-Wed I enter 3 trades, EUR, GBP, AUDs. The GBP, after much struggle and coming and going finally breaks the PT.

 

Problem! : From the AUD daily candle for Dec 11:

 

H - .7888

L - .7837

 

So, I add 2 pips (spread) + 1 to the entry for AUD: .7891 is entry.

 

This is triggered at 2300 PST.

 

However, AUD has a high of .7894! So the TP is not triggered. And after the news release this morning, BOOM!

 

SL hit for -25 pips plus spread.

 

???

 

My charts are clear as day. I can't see doing anything wrong but if so and anyone is running this let me know.

 

This means I lose all the pips gained in the last two days of trading in one night. How can this work with these stops?

 

(Problem #2: I trade OANDA. The spread widens due to the GBP news release last night at around 130am PST. So I'm down 10 pips from the spread. This would add to my loss should the PT not be hit.)

 

I'd appreciate any feedback, especially as this is supposedly so reliable.

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I think feb wanted everyone to observe and paper trade it to really understand the strategy before committing real money. Personally, I haven't done much observation with it due to the fact that I don't scalp, at least for now. There are others who've been using it?

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Agreed we need more details. However it was stated that the strategy must use currency futures to have a chance due to slippage, spread and bad fills. I certainly wouldn't attempt scalping through spot FX. I'll say again that it makes no sense to use a strategy with such a poor R:R.

 

Ok, either this system just doesn't work or we need more details.

 

I read this system last week and tried it this week. Either I'm extremely unlucky or...

 

On Mon-Tues I enter 3 trades, on EUR, GBP, AUD. Each go through and hit their PT but I should note there was quite a bit of struggle for each. For something that is supposed to break through decisively there was a lot of languishing about. Anyway, PTs hit: fine.

 

Last night, Tues-Wed I enter 3 trades, EUR, GBP, AUDs. The GBP, after much struggle and coming and going finally breaks the PT.

 

Problem! : From the AUD daily candle for Dec 11:

 

H - .7888

L - .7837

 

So, I add 2 pips (spread) + 1 to the entry for AUD: .7891 is entry.

 

This is triggered at 2300 PST.

 

However, AUD has a high of .7894! So the TP is not triggered. And after the news release this morning, BOOM!

 

SL hit for -25 pips plus spread.

 

???

 

My charts are clear as day. I can't see doing anything wrong but if so and anyone is running this let me know.

 

This means I lose all the pips gained in the last two days of trading in one night. How can this work with these stops?

 

(Problem #2: I trade OANDA. The spread widens due to the GBP news release last night at around 130am PST. So I'm down 10 pips from the spread. This would add to my loss should the PT not be hit.)

 

I'd appreciate any feedback, especially as this is supposedly so reliable.

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Raul, you are right that this is a Floor Traders favorite tactic, because I have heard several floortraders talk about this same technique....

On Big question however that needs clarification,

When trading the CME E-Mini contracts is this 8:30am CST or 9:30EST , or are you saying this is 1 hour after the open at 9:30CST. an hour can make a big difference.

My own observations of the ER2 is that there is usually a reversal/turnaround at the 8:38thru8:45am CST time. and by 9:30CST the morningmove is already over.

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