Break and retest on 5-minute EUR/USD: why the stop keeps getting hit
Break and retest on 5-minute EUR/USD, stop just past the last swing, 2R target, spread included. It lost 88% over five years (3123 trades, £0.95 won per £1 lost). A wider stop lost almost as much, tuned settings failed on unseen months, and none of 8 add-ons helped.
From r/Daytrading. The idea, in our words: Break and retest on 5-minute EUR/USD: price closes beyond the recent high/low, comes back to it and closes away again; enter, stop just beyond the previous swing. The poster says the stop is almost always taken. Tested as posted and with the stop pushed further out.
no edgeAs posted · the rules as described (see what we assumed below)
Optimized: best settings Quant Core found · last months held back as unseen data
Improvements tried
We then tried 8 changes a quant would test first (640 settings in all) and kept the best on past data only. The held-back months played no part in choosing it. None of them beat the tuned settings.
What we had to assume
- Level = the prior 24-bar (2-hour) high/low; the retest must come within 12 bars
- London and New York hours, 3:00 to 12:00 New York
- Stop just beyond the last 5-bar swing (as posted); target 2R (no target was given); out by 12:00 New York
- Only EUR/USD tested (the post also trades USD/JPY and USD/CHF)
A different reading of the rules could give a different result.
Backtested with the StratOS optimizer on historical data, with spread and costs charged, and the most recent months held back as unseen data. A backtest is not a forecast, and nothing here is investment advice.