Simple london breakout

Hello traders, I would like to let you know & hopefully get your feedback on a simple breakout method that i have backtested from Jan 2007 with impressive results.

I came up with the system in my endeavour to find a trading method that i can use with minimum disruption to my day job

The results based on a 1% risk per trade are:
2007-85% return
2008-62% return
2009-17.7% return
2010 so far 45%

Overall by compounding profits the backtesting shows a 500% gain from the start of 2007 until today (29th April 2010)

Although 2009 did not perform well with just 17.7% gain i hope this can be put down to the turmoil across all the financial markets during much of that year.

The method is simple
Using a 1 hour gbp/usd chart set to the current London time
Take the high & low of the 1 hour 8am candle
on the first break of the high or the low enter the trade
If long then the SL is at the low of the 8am candle
If short then the SL is at the high of the 8am candle
TP is 2 X SL (2 X 8am candle range)
If there is no break of the 8am candle within 3 hours then no trade for today

Once opened the trade is then left to run
If the trade has not hit TP or SL by 9am the following morning it should be closed before setting up your trades for the new day

So as you can see this method can easily be traded by someone like myself who has a day job by simply logging on for about 10 mins every day at 9am London time to set pending orders
However you will need to set text alerts to notify you when a trade is entered so you can cancel the other pending order.

I have not traded this method live yet as i have just finished spending many weeks scrolling through the 3.5 years of data.

If you can see any flaws in this system please post them here as i too am surprised that such a simple method can notch up these impressive returns.

The backtesting was calculated without using a buffer for Stops & entries etc. so it is entirely possible that there is plenty or room to optimize by adjusting the entry & exit criteria

Any thoughts & ideas are appreciated

A few more points to note

Although entries are for the most part mechanical, there are times when you will need to use some discretion. Generally any candles over 100 pips should be treated with caution. As a rule of thumb if the 8am candle looks unusually large in comparison with the recent price action then dont trade for that day. I tried to adopt this approach during the backtesting although this may prove more difficult when trading live. however being overcautious will undermine performance

Although primarily designed as a set & forget strategy, i believe better results can be achieved by managing positions as it was not uncommon for profiting trades to go on to reach 3,4,5 & possibly even more x SL offering a far better R:R than 1:2

I am keen to try this live but i obviously dont want to fall flat on my face by starting at the begining of a losing run. To minimise the risk of this i will wait for short string of losing days before jumping in

Drawdowns did take place & were more likely during choppy price action, therefore some people may chose not to trade during choppy market conditions

Yesterdays trade hit TP during this mornings 7am candle

So far this week 3 wins & 1 loss

Wednsdays trade missed it TP by just 1 pip

So even if todays trade is a loss this weeks gain will be 4% using a 1% risk per trade

One point i did not mention in the earlier posts is that fridays trades should be closed at the end of the day before markets close if TP or SL has not been hit

For the backtesting i used the last candle of friday trading