Do Breakouts Work on “Other Pairs”?

Apr. 8, 2024

Over the years, the question I’ve gotten most is:

“Does it work on other pairs?”

The answer, of course, is that it doesn’t matter.

If your system works on one thing and you’ve tested it without over-tweaking, then it doesn’t matter if it works on other pairs.

But that doesn’t mean it’s a bad question.

Because what if it does?

What if your system works great on other things and you could trade them all for more money and less drawdown? In that case, it’s dumb not to take a look.

So that’s what we’ll do.

In a recent video, I looked at a Bollinger Band™ breakout system on the GBPJPY using multiple time frames. It worked well with the GJPY.

Does it work on anything else?

Before we test that, though, we can rule out certain instruments. In Fx, if we’re looking at trend following strategies, USDCAD, USDJPY, and CHF pairs are not good. We can easily leave those out.

But, using Portfolio Tester, I looked at the 30M BB Breakout strategy from 2020-2024 trading 1 lot each time. Why that time period?

Because it’s a period of great volatility and is also the period where the Fx market has changed dramatically.

Here’s what Portfolio Tester told us:

As we could’ve guessed, almost every other pair is negative. And AUDJPY is barely profitable (and is a bear to trade live).

Which leaves us with two: the EURJPY and the GBPJPY.

And that makes sense.

Like we always say, to trade a trend following system, you have to trade something that trends.

The GBPJPY is the #1 trending Fx pair. EURJPY is probably #2.

And that’s what we saw from 2020-2024.

But the past few years have kind of been an anomaly.

We know the GJPY has trended forever.

Does the EJPY also qualify as a big trender?

In our next Newsletter, we’ll go back more than a decade to find out.

Talk soon.

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It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

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