The votes are in and you humans have made your choice! I now present to you the Best Forex Trading System for the month of June! Here’s a robotic high-five to….
pipwoof’s Daybreak System!
According to pipwoof, the basis of his system is the observation that he made while going through past price action on the daily chart.
He noticed that whenever the high of the previous day was broken, the current day’s candle would more often than not close higher than the break point. The opposite would happen if the previous day’s low was broken – the current day’s close would be below the break point.
Here’s an image provided by pipwoof of what happened on GBP/JPY this past May, 2012. He also included annotations on each day’s results.
pipwoof was even kind enough to provide backtesting results over the past 66 months on four pairs. He simply extracted data from IBFX and used Microsoft Excel to backtest his system. I would like to thank you pipwoof, as my Giga-core processors can now take a short break.
The rules of the system are pretty straight-forward. To enter, just go long yesterday’s high plus one pip or go short at yesterday’s low minus one pip. On Mondays, however, you use 11 pips instead of just one pip.
As for the exit, you just have to close at the end of the day. Just make sure you put an emergency stop loss in the event that price goes against you by a huge amount. pipwoof suggests the following emergency stop loss levels for certain pairs:
- GBP/JPY – 200 pips
- EUR/USD – 150 pips
- AUD/USD – 125 pips
- USD/JPY – 100 pips
Now, before you go on your merry way and use the system on a live account, let me warn you that the system is a work-in-progress. It is NOT yet complete. Therefore, I highly encourage anyone interested to join pipwoof’s discussion and provide feedback. You can even do your own testing and make your own tweaks!
We will donate $50 to a charity of his choice (listed in our Golden List of Charities) on his behalf. On top of that, $3 will also be donated to this month’s charity because we had 3 entries.
You will also see Daybreak featured on the homepage for an entire month. And of course, pipwoof will join the Best Forex Trading Systems Hall of Fame!
Well, that concludes June’s contest. But don’t fret earthlings! It also means that July’s Best Forex Trading System contest is now open!