Breakout trading system

Position sizing Position sizing changes according to market volatility which is measured by the daily ATR. This is the calculation for 1 unit (N=Daily ATR):

Example: GBP CHF ATR = 0.0149 Account Size = $10,000 Dollars per Point = 1.1943 100 / (0.0149 x 1.1943) = 5,619 since a full lot equals to $100,000 than $5,619 is equal to 0.056 lot which will be rounded to 0.05 lot. A unit will be the basis for entries, position increase and stop losses. *** Entries A breakout is defined as the price exceeding the high or low of a particular number of days.

System 1 - Entries are based on 20 day breakouts. Enter a position when price is exceeded by a single tick the high or low of the preceding 20 days. Entry signals should be ignored if the last breakout would have resulted in a winning trade regardless if it was taken or not, including if it was skipped because of this very rule. A breakout is considered a losing breakout if the price (after the date of the breakout), moved the equivalent of 2 ATR against the position before a profitable 10-day exit occurred. The direction of the last breakout is irrelevant to this rule. Thus, a losing long breakout or a losing short breakout would enable the subsequent new breakout to be taken as a valid entry, regardless of its direction (long or short). However, in the event that a breakout entry is skipped because the previous trade had been a winner, an entry should be made at the 55-day breakout to avoid missing major moves. This 55-day breakout is considered the Failsafe Breakout point. System 2 - Entries are based on 55 day breakouts. Enter when the price exceeds by a single tick the high or low of the preceding 55 days. All breakouts for System 2 should be taken whether the previous breakout had been a winner or not. Stops No trade could incur more than 2% risk. Since 1 daily ATR of price movement represents 1% of Account Equity, the maximum stop that is allowed, 2% risk would be 2 ATR of price movement. Stops should be set at 2 ATR below the entry for long positions, and 2 ATR above the entry for short positions.

In order to keep total position risk at a minimum, when additional units are added, the stops for earlier units are raised by ATR. This generally means that all the stops for the entire position would be placed at 2 ATR from the most recently added unit. There are old traders; and there are bold traders; but there are no old bold traders. Traders that dont use stops go broke. Exits The System 1 exit is a 10 day low for long positions and a 10 day high for short positions. All the Units in the position should be exited if the price goes against the position for a 10 day breakout. The System 2 exit is a 20 day low for long positions and a 20 day high for short positions. All the Units in the position should be exited if the price goes against the position for a 20 day breakout.