Changes to my breakout strategy:
I still plan to test this strategy over the next couple of months. However, I realized very quickly that I needed to make changes to my risk/reward ratio. I was working with an approximate 1:2 ratio on my 1st lot. Trading with such a ratio means that your win/loss probability needs to be quite high. 2/6 wins on May 3 led me to believe that it wasn't as high as I needed it to be. Meanwhile, my 2nd lot was controlled by a dynamic stop of 20 pips that had a tendency to stop out my trades prematurely. Metaphorically speaking, in attempting to ride the wave I was getting caught in the ripples.
In changing things a bit, I'm going to look at only 2 pairs for a while - GBP/USD and GBP/JPY. I like the movement of both these pairs. Six pairs were a bit too much for me time wise and my wife was getting impatient!
I'm set the SL to 30 pips + the spread. I'm still buying two lots; TP1 is 30 pips (1:1) while TP2 is 60 pips (2:1). The latter automatically moves SL to break even once 30 pips is hit.
Lastly, I'm only going to create entry orders in the direction of the trend on a H4 chart. Here, I'm simply determining trend direction by whether the pair is trading above the 200MA (up trend) or below (down trend).
Okay, that's it for now.
