Monthly Hi-Lo breakout strategy

This is an extremely simple trading strategy using no indicators and which can still generate good returns.

RULE: buy on close above last month's high with previous month's low as SL.

Risk management: Limit risk per trade to 1% of your trading capital.

Returns: is whatever the market gives. You cannot quantify this in advance.

Here is a sample chart for SIEMENS.

• First long trade is in NOV when stock closes above OCT high 880. SL is OCT low (768).
• In DEC, SL increases to NOV low (856) and gets hit.
• In JAN buy on close above DEC high (985) with SL at DEC low 795
• In FEB, SL is at JAN low 875
• In MAR, SL is at FEB low 1040
• In APR, SL is at MAR low 1320
• SL gets hit in APR and you are out of trade.
• in MAY, consider a buy on close above 1500 only
• And in JUN, consider a buy on close above 1420 only (assuming new high is not made this month).

So simple and easy to understand.