Daily Range Break Out
Daily Range Break Out
You are about to discover one of the simplest, most effective systems I use to trade the markets
to date. I have every right to brag about this system because I am not the creator. It uses
an age old technique that traders have used for decades. I believe this to be a key
contributing factor to its excellent past performance and future success.
If you think you are able to allocate up to 10 minutes every day to place orders for this
semi-automated system, then what I am about to show you will be extremely appealing.
I want to be clear from the outset that this system, although semi-automated is not some
computer generated robot type program that generates random trades that in the long run,
always lose money.
I am extremely confident in the success of this system and trade it myself with real money.
I have even put together a document showing every single trade from the start of January
2015 up until the start of October 2015. (I first created this report in 2015 and pleased to say
the system is still working today!)
It is essential that you see the how the wins and losses are distributed to give you the greatest
of confidence to trade the system for yourself.
COMPARISON:
Ok, so it hasn’t been the best year for the stock markets so maybe a little unfair to compare the
results of this system to the gains (or losses!) you would’ve had from investing your money into
the actual stock market index. But regardless of what the stock markets have done, this Daily
Range Breakout system has had some great results which are most certainly not limited to
2015 only. This system has performed very well for decades and I believe it will continue to
perform equally as well into the future.
% GAIN ON ACCOUNT
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So there you can see the results. Over the 9 month period, the stock markets have dropped but
trading the Daily Range Breakout system you could’ve made an easy 60% gain on your
account value. And that’s playing things pretty safe; risking 2% of you account on any one
trade.
Risk management is another book entirely. The exercise of this report is to show you the
mechanics of the system. But risking 1% or 2% of your account balance per trade is a pretty
safe method. Of course, you could choose to risk maybe 5% of your account on each trade and
enjoy much bigger profits than what I have shown you above. It’s all relative. But you must
understand that increasing risk, increases the size of the losses, and the size of account
drawdown.
If you don’t completely understand position sizing or risk management models then stick
to risking no more than 2% of your account for any one trade.
We will be looking at trades taken from Daily charts. At the close of each daily bar we check to
see if it is an Inside Day. An inside day means the the day’s range, which is the distance
between the high and low of the day is within the range of the previous day’s range.
An inside day has lower highs and higher lows than the previous day. The diagram below
shows 2 Inside Days circled in red. Looking to the 2nd circle, we can see that the highs of that
daily bar are lower than that of the previous bar and the lows are higher than that of the
previous bar.
Once we have found an inside daily bar, we can then place our orders to enter the trade the
following day.
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PLACING THE ORDERS:
There are three types of order we could place. Market, Stop and Limit orders. For this
system we will be placing Stop orders to enter the trade.
Now you have your orders placed, you do not need to do anything until near the close of the
next day.
EXITS:
You are protected by your Stop Losses should the trades go against you. At the closing of the
day of entry, you will manually close out open positions with a Market Order whether a profit or
loss is showing. Cancel any working orders that were not filled.
Notice in both of the examples shown in the diagram above, we would’ve entered long, buying
the market and exited at the close of the day after the inside day, banking decent profits.
You then check the daily bars for new trade setups and place orders accordingly.
The results I am about to show you are from trading 6 different FOREX PAIRS:
● EUR/USD
● USD/JPY
● GBP/USD
● USD/CAD
● AUD/USD
● EUR/GBP
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These are some of the major Forex Pairs and pairs I personally trade. If you would like to take
more trades, then add more Forex pairs into you system.
I recommend you trade a at least a handful of different pairs to diversify. You may not make
money in every pair, every year so don’t just trade one pair. The gains made in the remaining
pairs will far outweigh any losses in one particular pair.
NOTE: I trade this system with the above FOREX pairs and a few more. I have also tested
many more, and I am very confident in this system for trading FOREX. I have not personally
traded or tested this system on any other markets. So if you would like to trade stocks or
commodities then I strongly recommend testing for yourself.
Below is a chart showing how your account would have looked from the start until the end of the
9 month test period had you invested in the FTSE 100 Index.
Starting at the left and ending at the right, it actually decreased, losing money.
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Below is a chart showing how your account would have looked from the start until the end of the
9 month test period had you invested in the S&P 500 Index. Similar story.
Starting at the left and ending at the right, it actually decreased, also losing money.
It’s clearly evident that buying and holding the stock market isn’t such a great idea!
Now I’m about to show how your account could’ve grown very nicely over the same period using
the Daily Range Breakout system which would’ve required less than an hour of your time every
week to trade.
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I think you’ll agree the growth of your account shown by the above chart using the system is a
far more attractive method than investing in the stock market!
The numbers on the left hand (Y) axis of the chart are the value of R. Where R (or Risk) is the
predefined amount of risk per trade. It is equal to the distance between the entry price and the
stop loss price of each trade.
As previously discussed, this value or Risk (R) is usually equal to a percentage of your trading
account. For example, 1% or 2% etc.
TO CONCLUDE:
I have clearly laid out the rules to this Daily Range Breakout system, shown you what markets
it works well in and most importantly, shown you actual results.
I rarely come across anyone with systems that are willing to show you actual results. In addition
to what you’ve already seen, I have gone one step further and laid out a section of my trading
records to show each and every one of the trades from that 9 month test period during 2015.
This is one of a few powerful and robust systems I personally use to give myself an edge in
the markets. I use other systems in addition to the Daily Range Breakout system to
compliment it and aid in smoothing my overall returns.
This is probably among the most basic systems I trade but don’t let that detract from its
effectiveness. In my years of experience trading the markets, simple systems tend to work best
and will most likely continue to work best in the future.
If you would like to learn more effective strategies like this one then I strongly encourage
you to enroll in my TRADING COURSE HERE
With this detailed report I believe traders with any level of experience will be more than capable
to trade the Daily Range Breakout system.
If you are not comfortable to trade somebody else’s system with real money, then I encourage
you to begin trading with a demo account or very small risk sizes until you build the confidence
in it for yourself.
Below are the results, trade by trade from January 2015 to the end of September 2015. Prices
may vary ever so slightly depending on what data provider you are looking at. These results are
taken from daily charts from ProRealTime.
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CHART KEY:
● FX PAIR FX pair
● ENTRY DATE Date Entered
● DIR Direction, Long or Short
● ENTRY Entry price. A negative (-) is a short trade
● INITIAL STOP Stop loss price
● TRADE TYPE O = Original, where only one direction was traded.
S = Secondary, Original trade was stopped out and a 2nd
trade in the opposite direction was opened
● RISK R Distance in points between entry price and stop loss
● EXIT Exit Price
● R PROF/LOSS Profit or loss calculated per original RISK R
● ACC R Running profit/loss as trades are made
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15 AUD/USD 2/2/2015 L 0.7801 0.7727 O 0.0074 0.7798 -0.04 14.61
16 EUR/USD 2/3/2015 L 1.1366 1.1288 O 0.0078 1.1457 1.17 15.78
17 USD/JPY 2/4/2015 L 117.79 116.83 O 0.96 117.3 -0.51 15.27
18 AUD/USD 2/5/2015 S -0.7739 -0.7853 O 0.0114 -0.7799 -0.53 14.74
19 USD/CAD 2/6/2015 S -1.239 -1.2591 O 0.0201 -1.2527 -0.68 14.06
20 EUR/GBP 2/6/2015 S -0.7452 -0.7514 O 0.0062 -0.7424 0.45 14.51
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49 EUR/GBP 3/23/2015 L 0.728 0.7221 O 0.0059 0.7321 0.69 13.80
50 EUR/USD 3/26/2015 L 1.1019 1.0897 O 0.0122 1.0897 -1.00 12.80
51 EUR/USD 3/26/2015 S -1.0897 -1.1019 S 0.0122 -1.0885 0.10 12.90
52 USD/JPY 3/26/2015 S -119.2 -119.87 O 0.67 -119.2 0.00 12.90
53 USD/CAD 3/26/2015 S -1.2469 -1.2544 O 0.0075 -1.248 -0.15 12.75
54 USD/JPY 3/30/2015 L 119.53 118.89 O 0.64 120.03 0.78 13.53
55 EUR/USD 3/31/2015 S -1.0806 -1.0899 O 0.0093 -1.074 0.71 14.24
56 EUR/GBP 3/31/2015 S -0.7289 -0.7343 O 0.0054 -0.7241 0.89 15.13
57 GBP/USD 4/1/2015 S -1.4751 -1.4876 O 0.0125 -1.4834 -0.66 14.47
58 EUR/USD 4/2/2015 L 1.0804 1.0715 O 0.0089 1.087 0.74 15.21
59 EUR/GBP 4/2/2015 L 0.7303 0.7227 O 0.0076 0.7331 0.37 15.58
60 USD/JPY 4/3/2015 L 119.93 119.41 O 0.52 119.41 -1.00 14.58
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84 AUD/USD 5/12/2015 L 0.7937 0.7872 O 0.0065 0.799 0.82 16.85
85 EUR/GBP 5/13/2015 S -0.7148 -0.7231 O 0.0083 -0.7211 -0.76 16.09
86 GBP/USD 5/21/2015 L 1.5592 1.5469 O 0.0123 1.5657 0.53 16.62
87 USD/JPY 5/22/2015 S -120.81 -121.3 O 0.49 -121.3 -1.00 15.62
88 USD/JPY 5/22/2015 L 121.3 120.81 S 0.49 121.54 0.49 16.11
89 USD/CAD 5/22/2015 L 1.2247 1.2167 O 0.008 1.2279 0.40 16.51
90 AUD/USD 5/22/2015 L 0.7917 0.7863 O 0.0054 0.7863 -1.00 15.51
91 AUD/USD 5/22/2015 S -0.7863 -0.7917 S 0.0054 -0.7822 0.76 16.27
92 EUR/GBP 5/25/2015 S -0.709 -0.7167 O 0.0077 -0.7073 0.22 16.49
93 USD/CAD 5/26/2015 L 1.2322 1.2272 O 0.005 1.2424 2.04 18.53
94 USD/JPY 6/1/2015 L 124.23 123.57 O 0.66 124.87 0.97 19.50
95 AUD/USD 6/1/2015 S -0.7625 -0.7678 O 0.0053 -0.7614 0.21 19.71
96 EUR/GBP 6/2/2015 L 0.7201 0.7142 O 0.0059 0.7269 1.15 20.86
97 USD/CAD 6/5/2015 L 1.2511 1.2437 O 0.0074 1.2437 -1.00 19.86
98 USD/CAD 6/5/2015 S -1.2437 -1.2511 S 0.0074 -1.2448 -0.15 19.71
99 GBP/USD 6/9/2015 L 1.5368 1.5217 O 0.0151 1.5395 0.18 19.89
100 AUD/USD 6/9/2015 L 0.7717 0.7599 O 0.0118 0.7687 -0.25 19.64
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120 EUR/GBP 7/3/2015 L 0.7123 0.7069 O 0.0054 0.7135 0.22 16.65
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154 EUR/GBP 8/14/2015 S -0.7097 -0.7161 S 0.0064 -0.7103 -0.09 21.31
155 AUD/USD 8/17/2015 S -0.7351 -0.7402 O 0.0051 -0.7372 -0.41 20.90
156 GBP/USD 8/20/2015 S -1.5631 -1.5705 O 0.0074 -1.5688 -0.77 20.13
157 EUR/GBP 8/20/2015 L 0.7101 0.7033 L 0.0068 0.7162 0.90 21.03
158 USD/CAD 8/21/2015 L 1.318 1.3056 O 0.0124 1.3188 0.06 21.09
159 AUD/USD 8/24/2015 S -0.7283 -0.7364 O 0.0081 -0.7176 1.32 22.41
160 EUR/USD 8/26/2015 S -1.1392 -1.1589 O 0.0197 -1.1339 0.27 22.68
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WHAT NEXT?
For more trading strategies like this one and to learn exactly how to trade them for maximum
profits, check out my TRADING COURSE HERE
For useful Trading videos, articles and best techniques then follow my blog at The Transparent
Trader.com
If you have any questions or need help with anything I’m happy to help. Just send me an
email jarrod@thetransparenttrader.com
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