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“This video traders. We re gonna look at the gbp usd day trader strategy while while we re looking for an overnight break out in the morning. I ll give the rules in a moment stick around hey guys one welcome to so gbp usd otherwise known as cable super popular trading vehicle for forex. Trades.
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That you tread so gbp usd is perfect this kind of thing because don t want to be paying high spread. Who don t want to pay crazy charges. You know a very simple execution platform. Going do the trade job.
Done. So the rules for this are the theory. If you like is that gbp usd is very quiet in the early hours of the morning. Because americans are asleep.
And me. Britain s just kind of waking up so especially between 12 00. And 6 00. So then on the rate.
Waking up isn t waking up towards the end of it so theory is there s not much liquidity in the market volume. And if you look at a cable chart you see that for yourself. So what we re trying to do here is we re trying to see what that range is overnight. And then we re basically going to join a breakout in the direction of the move using that as a reference point in the morning as london starts to wake up as the order flow starts to happen so very simple very easy strategy to execute.
There s a slight variability about when it will break out. But you re not gonna be singing from the screen. All day long for this one it s kind of going to work or it s not and the theory is well with this is that if you do have some serious institutional order flow coming in then you have to write this thing. And it s going to give you a decent profit and if it doesn t the stops are reasonably tight as well and so you re not risking a huge amount on the trade.
Okay so one of the core try to platform in a moment. And we ll kind of look through how we place the orders and how to work out how using their charles such a very simple to execute. But let s look at the rules in theory right now so we re on the gbp usd 15 minute charts a 15 minute candle chart recognizes a line charge for illustration but give you the idea of how the time and have a range plays a part in this trade. So.
When marking the high and low from twelve o clock. Till. Six. O clock.
In the morning. Us uk. Time. By the way.
So ever. You re in the country on the world. Should. I say i change it for that and it s important that that time to write because we are based.
This is a kind of time based trade like a seven everyone s asleep and no one s at the desk or unless. There s a news based and incident overnight of course. I may also this will probably change the metrics completely. But majority of time.
We re gonna get a low range. So marking up for hi. We re marking off the low there s our range now and i don t care whether we re going to long or short. We re looking for a break of that.
Range and we only take a break of that range after 7 00 am. So there s a window of time between 6 7. Well. We don t take the trade.
Ok. So we don t get involved in it within that window time because sometimes is a little bit of noise. But it s not a clear drive and there s some water flow coming in some people are waking out some of the deaths of you re taking deals. But it s not really the full fat version here.
If you like so from 7 o clock. That s what most people at the desk in the city. That s when the orders are going to really start flowing in an 8 o clock. Really start shoving it so we don t take it between 6 8.
But from. 7 we can take you all the way up to. Say 9 am. So any point after that if it breaks.
We take it so this is what happens as we break the range on this. Example we ve got our range in. There at 8 00 am. It could be any time after 7 00 by the.
Way but happens to be in this. Example 8 am. We break the lower end of that range. We initiate a short position our stop goes in above the high of that 12 to 6.
O clock range. Very simple to put in very easy to work it out it s pre pretty planned for you and then we re looking to close that trade after one hour worth of move or we re gonna get stopped out from this so. The idea is the theory being that you know if we get that real push a real sort of money flow coming in this thing will travel. Many multiples of the stop giving a decent risk reward ratio.
So that days it does you know that you get some real jackpot type moves and when it doesn t it drifts around you wanna get stopped out it s not gonna hurt you that much they could have an additional kind of qualifier to this that says hey after 15 minutes. I say 30 minutes. I put my stop to break even. But you know that s up to you to work out in reality.
This stop is gonna be so tight. Most of the time because the range is so narrow that you know you may not want me even even bother doing that okay so we take a trade and then the stops of the width of the range so quite easy to do that one thing sort of extra parameters here guys actually close the trade after an hour. So that s the exit wait for one hour move. So if we took it.
At 8 00. We close. At 9 00. For took.
At 7 00. Or close. At 8 00. 7.
30. Or so later so we re looking for an hour. Worth of move on that trade one thing to point out here guys is that the reversal is possible if stopped out so i think. It s okay to do this once.
Then you may not agree. And again. It s a very personal trading. Not recommend daisha or anything like that it s a purely some ideas to seethe and i m going to get the juices flowing for thinking different setups and strategies and practice markets.
You wouldn t otherwise trade or or methods. You would another way straight. If you kind of get stopped out and it comes back in so you gonna say you take a short here. And it pops back out and stops.
You i think you re okay to re enter in the direction of the move. Because you might get a little bit of noise in there as well try to avoid that sixth or seven you can t eliminate everything if you get a kind of fake out the reverses and rips back up you get stopped you could put a kind of double stop. If you like to get yourself back in the trade now it s gonna depend on the width. You might not want to be getting whipped out back and forth or back and forth.
But some cases you do get that little kiss below that rips back up now if it s going all the way down on a decent distance and then coming back up you don t take the trade. But let s say the first 15 minutes comes down comes back up takes you out you might even want to go in the direction on the actual move. There along was you re not taking too much risk on the deal. I think that s fine.
I never cut a little thing guys we moving a stop to break even after 50 minutes. And i guess a that s an optional he kinda if you want to that stop maybe so narrow that you re not that bothered about that it might be and i m not really worth it you might say well i still want to frame that range. And do that so it s the overnight gbp usd breakout strategy for day traders hit the screens. Now.
Let s check out the core trader. Two platform and work out how we structure this how we d put our lines on how we d frame the trade how it workout. Stops. How we put our orders in so we can very methodically trade this and execute this if it came up and if it s sued sure your risk tolerance as well i see the screens all right guys.
I m logged in to quarter a tattoo from cool spreads. Australia. Let s have a look how we d frame this trade. Up for gbp usd.
How we trade gbp usd. Using that overnight breakout strategy for day trade. So. First of all we can navigate to it using the mark explorer you could have been the popular markets popular one cable guys we know it is a very good trading vehicle and i mean a spreads it tight spreads.
A tighten on across brazil australis. It s kind of a usp. Really simplified execution venue with tights britain and gbp is no exception to that pretty decent spreads. I have to say we don t a tray from the chart for now.
It s kind of a lineup and this trading at this trade navigated and sorted out. So let s have a look let s get rid of the tooltip well we can use a tooltip. Some kind of workout. Where midnight is we can see anyway along the x axis.
So fine. So let s look at this example. Here. Let s minimize this a little bit.
And see so first of all we need to draw some horizontal lines in or i need to kind of frame. This high and low from midnight till. 6. 00.
So we ve got a level here. No that s a nine o clock. We went till midnight. So our high is gonna be around here.
And i ll low is gonna be around here because midnight starts. Here and six o clock ends here. Now don t forget. The rules of the other strategy are we don t take it until 7 00 so this is an irrelevant relevant break guys we re only taking this if we see a break after 7 00 so this is seven o clock.
So this from this candle onwards. Great. We can see a break now we see a break the downside here and that s when we d enter the trade. This is well we have a short right here we enter the trade sure we have a stop here so very simple very effective.
We ve got a range here we ve got our kind of levels all all marked out if we want to put them on if we want to put on a wreck hangover of course. We can do you know we can bracket. It and frame it and put it in and do whatever he wants and make it more appealing and more visuals for us. So you can see exactly which one trade.
But i think you get the idea so after we break out i didn t really want that one did. I we can right click to delete very simply if we break out then you know we re gonna take this short. I can let me show you how you do that actually when we re putting a trade in the actual broker platform. So let s imagine that we were kind of trying to bracket in order.
Here. Um. Quatro twos have got enough good logic in it they won t let you put a narrowness limit or stop in so. Only you put a stop in for example that gets filled straightaway unlike some brokers so these guys you know they re not trying to scam you if you get it wrong.
It will just go in as a limit so for example. Let s say we re putting a buy in it will assume that if we have an order level below the market that it needs to be a limit because the prices come down to it and if the price is above the market. It will assume that we want to put a stop in so that would either be an entry. If we haven t got position already all to stop our position.
So the logic is sensible and obviously that the counter is true for the sell side so for example. If we were taking that trade and let s say we wanted to let s make up some numbers like i said won t be able to actually do the trade. We want to order wise let s say we put it here then if the mock comes down to one point three one five. Then we re gonna be in the trade with whatever quantity.
We put in a 5 pound of point ten pound. A point one pound. A point whatever that may be now i want to attach that stop to it so to stop here. Then would be you know whatever their the distance was away so it s one point three one nine for example forty points.
That way don t think it was that much but you get the point that s where you re higher at the range would be so that s the lower the range. That s the higher the range. Very simple to put in and limit you can either put a limit. No of course just wait for the trades to have its hour long.
Now you obviously duplicate this so you create another order once you ve filled this one you create another order and that would be them the buy side and that ll be the upper limit and the stopper would placed a low limb so just doing the opposite to what you re doing so again. You re getting into the trading makes and you re coming out if it and the only getting stopped out should i say if it then comes the other way at least. Then your your kind of focus with the trade and it s very easy and mechanical to place the trade. So that s the overnight gbp usd breakout strategy.
Guys take can keep the risk manager. Whatever you re doing i ll see you next one bobby. ” ..
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