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Ace284 May 11, 2009 5:20pm | Post# 1

4H Box Breakout
 
3 Attachment(s)
I've seen breakout strategies for daily and weekly. I've never seen one like the one i'm about to present.

DRAW a box connecting the high of the first 4hr candle(00:00) of the week with the low along with a buffer of 20 pips on each side.

The week starts at the open of the Australian session.
If I had a penny for every time someone has asked which candle it is..i wouldn't need to trade forex to make money. For the next person who is going to ask, follow these instructions.
Download an FXDD platform. Press Ctrl+y on a 4hr chart. Lines will magically pop up and at the start of every week the first 4hr candle should form on the line. This is the candle you use for the High and Low.

Box Forming Times:
GMT- 21:00 to 01:00
EDT - 17:00 to 21:00
FXDD time - 00:00 to 04:00

Use Time zone conversion to find out your specific time.

DO NOT ask when the bar forms and when it closes as its been answered MULTIPLE times. I post every week when the bar closes. If you're not willing to go through the thread or wait one week for my post on when the bar closes than this system isn't for you.
I'm sorry, but it's just gotten to a point where people ask every time.

Some brokers begin operating an hour earlier then FXDD or later. If you first 4Hr bar closes at 00:00 GMT, then that's not the right candle. The best thing to do is to download an FXDD demo platform and use that as reference.
Rules:
- Add a buffer of 10-20 pips on each end of candle
- Buy on upper break of weekly box (including buffer+spread)
- Sell on lower break of weekly box (including buffer)

SL - other side of Box
TP1 - 1x box size
TP2 - 2x box size
TP3 - 3x box size
TP4 - 4x box size

This system works on many JPY pairs.
GBP/JPY
EUR/JPY
AUD/JPY
CHF/JPY
CAD/JPY
**GBP/JPY is the best pair.
May work on other pairs, testing is required however.


I like to use 3x-4x box size as TP.
I take don't profits at 1x size of box because larger reward is key.

I move stop to BE after 1x has been hit.

Risk Management (to find out your position size)

(Account Balance * Risk percent)/Stoploss = mini lot size

Advantages
- 30 mins a week
- no worrying about charts filled with indicators
- higher reward than risk on EACH trade
- easy to back test

Important:
Probability
Q&A (thanks to fxann)

Indicators below, thanks to fx2248 for your help.

Feedback would be great from all you FX experts and GOOD LUCK!
Click to Enlarge

Name: ex.gif
Size: 16 KB
1 Box 4 A(2).ex4
1 Box 4 B(2).ex4

paradoxical May 11, 2009 5:27pm | Post# 2

What have been your results? Trading live?

Ace284 May 11, 2009 5:30pm | Post# 3

Only discovered this strategy at the end of Dec last year. Trading live since then.

Average = 274 pips per week

Ace284 May 11, 2009 5:33pm | Post# 4

If you take a glance at a chart with lines separating the weeks then u'll see that with GBP/JPY the trends are great.

Siuol May 11, 2009 5:57pm | Post# 5

Man, this must be my lucky day. I found a thread earlier I like on the 1 hour chart but i like this one even better as it's a weekly chart with no indicators. The weekly chart is great for me because I work a full time job from 8:00am-4:30pm PST but I also don't want to be feeling like I have to always be watching my charts. I will look into this tonight for sure when I get home.

And yes, this may be great because g/j trends very strongly.

If you take a glance at a chart with lines separating the weeks then u'll see that with GBP/JPY the trends are great.

Ace284 May 11, 2009 6:20pm | Post# 6

Man, this must be my lucky day. I found a thread earlier I like on the 1 hour chart but i like this one even better as it's a weekly chart with no indicators. The weekly chart is great for me because I work a full time job from 8:00am-4:30pm PST but I also don't want to be feeling like I have to always be watching my charts. I will look into this tonight for sure when I get home.

And yes, this may be great because g/j trends very strongly.
I've been there, trying to force trades into my schedule. I'm sure u've heard the words Money Management before but even the concept of that is difficult when you have a full time job. My advice to you would be to just follow the system, place the orders every week as well as the SL and leave them. Don't let your emotions or someone's analysis force you out of the trade. Good luck to you sir

redhouse May 11, 2009 6:41pm | Post# 7

Since different brokers use different start times, what time and day are you using for your trdes?

Sundays count?

Ace284 May 11, 2009 6:48pm | Post# 8

Times
 
Since different brokers use different start times, what time and day are you using for your trdes?

Sundays count?
I'm at EST time so my first 4hr bar is formed from 5 -9 p.m on sunday evening.

Siuol May 11, 2009 6:54pm | Post# 9

Yes, I totally agree with you. That's exactly what I need to do. Place the orders every week and let them be.

I've been there, trying to force trades into my schedule. I'm sure u've heard the words Money Management before but even the concept of that is difficult when you have a full time job. My advice to you would be to just follow the system, place the orders every week as well as the SL and leave them. Don't let your emotions or someone's analysis force you out of the trade. Good luck to you sir

Siuol May 11, 2009 6:59pm | Post# 10

Upper/Lower Break
 
Should the orders be placed exactly at the high and low from the first 4hr candle of the week or is there a certain amount of pips above/below where the orders should be placed?

Also, each week, there will be new order levels so I know any unfilled orders from the previous week will have to be cancelled. Lets say for instance the long orders get triggered first, do you cancel the short orders or keep them in play just in case the market heads in the opposite direction before the end of the week?

Also, do you keep triggered orders open over the weekend or do you try and close them before your broker closes on Friday?

Ace284 May 11, 2009 7:19pm | Post# 11

Should the orders be placed exactly at the high and low from the first 4hr candle of the week or is there a certain amount of pips above/below where the orders should be placed?

Also, each week, there will be new order levels so I know any unfilled orders from the previous week will have to be cancelled....
Great Questions.

I generally place the buy order with a buffer of 10 pips + spread.
The Sell is just 10 pips below the box.

If orders have not been triggered by SL or TP by the end of the week please do so manually.

I do keep both Long and Short orders even if one of them has hit the TP

** But take this into account. Since the start of the year GBP/JPY has had a range of 785 pips per week on average. With that said if your TP has hit and the pair has already moved up or down by a large amount of pips AND you know that the TP on the other side will most likely not be hit. Cancel your order. This is something that required some practice but it is very easy once you get use to it.

serj1 May 11, 2009 7:26pm | Post# 12

Thank for sharing this system. Would you mind posting this weeks chart with the HIgh and Low.
Thanks

Macedonia May 11, 2009 7:29pm | Post# 13

No this isn't a thread about dogs = )
This system is extremely easy to use and looks extremely profitable. I've seen breakout strategies for daily and weekly. I've never seen one like the one im about to present but hey i could be wrong.

DRAW a box connecting the high of the first 4hr candle of the week with the low.

Rules:
- Buy on upper break of weekly box
- Sell on lower break of weekly box

SL - other side of Box
TP1 - 1x box size
TP2 - 2x box size
TP3 - 3x box size

I mainly trade GBP/JPY but this system could adapt to other...
very interesting ace. i am looking fwd to testing it. thanks.

just a couple of questions, do you put a order above and below the square? or do you clasify a break of the square(as your instructions say) when the candle closses past the box. last of all, would there be a indicator out there to draw a box for mt4 platform. cheers

EDIT: oops first question already answered just above. ignore the first question.

Ace284 May 11, 2009 7:39pm | Post# 14

1 Attachment(s)
I'm posting an example on this weeks orders trade. I modified my Fibs to show price target levels.

Short:
149.23
SL- 150.07
TP- 147.53 HIT

Long:
150.25
SL - 149.33
TP - 152.09
Click to Enlarge

Name: example breakout2.gif
Size: 41 KB

Ace284 May 11, 2009 7:50pm | Post# 15

[quote=would there be a indicator out there to draw a box for mt4 platform. cheers[/quote]

Unfortunately i dont have the slightest clue with programming indicators.

Anyone know how to make an indicator for this system with a 10 pip buffer?

adsanders May 11, 2009 7:53pm | Post# 16

Sunday candle?
 
Hello and thanks for sharing this system.

My Broker uses a Sunday candle and it appears yours does not?

My question is... should I just dismiss the Sunday candle period and start with 00:00? (which also is the Asian session opening - at least it is on my chart)

Thanks in advance!

Ace284 May 11, 2009 7:55pm | Post# 17

Hello and thanks for sharing this system.

My Broker uses a Sunday candle and it appears yours does not?

My question is... should I just dismiss the Sunday candle period and start with 00:00? (which also is the Asian session opening - at least it is on my chart)

Thanks in advance!
Yes you should start with 00:00 (Asian Open)

serj1 May 11, 2009 8:03pm | Post# 18

IF TP 1 is triggered do you move the SL to break even?

Ace284 May 11, 2009 8:23pm | Post# 19

IF TP 1 is triggered do you move the SL to break even?
haven't tried that but sounds like an idea. I'll test and see how it works

Palmer May 11, 2009 8:29pm | Post# 20

1 Attachment(s)
Hmmm, interesting. If you select the period separator by right clicking on the chart, select the common tab to select it, it will draw a line through the first candle of the week. I manually drew the boxes....

Will look at this some more for a potential set and forget type of trading method...
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BenQ May 11, 2009 8:31pm | Post# 21

1 Attachment(s)
I haven't had time to review the thread yet, but I saw someone asked for a box. Attached is one that could possible be used. You can set the start and stop time, and pip buffer. Play with the offset to match it to your broker's time.

Instead of placing a box on one H4 candle, it's much easier to see if its placed on the first 4 candles of H1, or you can use an m30 chart, etc -- it's all the same as long as it covers the first 4 hours -- but I haven't seen the whole thread yet, so don't know if there's a specific reason.

I don't have the code for this, but if someone else does it probably could be modified to show all the tps and sls.
ant-GUBreakout_V.0.4.2.ex4

adsanders May 11, 2009 8:34pm | Post# 22

Thanks!
 
I haven't had time to review the thread yet, but I saw someone asked for a box. Attached is one that could possible be used. You can set the start and stop time, and pip buffer. Play with the offset to match it to your broker's time.

Instead of placing a box on one H4 candle, it's much easier to see if its placed on the first 4 candles of H1, or you can use an m30 chart, etc -- it's all the same as long as it covers the first 4 hours -- but I haven't seen the whole thread yet, so don't know if there's a specific reason.

I don't have the code...
Thanks Ben!

I was thinking of trying the same thing!

yuan83 May 11, 2009 8:43pm | Post# 23

cool
 
hi this system sounds cool. just to confirm, so you only place 1 trade per week? or will you, say after you long, it reaches your tp, then there are signs of reversal and it hit ur lower point, will you short again?

Ace284 May 11, 2009 8:46pm | Post# 24

I haven't had time to review the thread yet, but I saw someone asked for a box....
From what i can see, this only works for daily breakout

yuan83 May 11, 2009 8:46pm | Post# 25

shucks i m late for one day else i could have used this system!

BenQ May 11, 2009 8:49pm | Post# 26

1 Attachment(s)
The box I posted above will place a box at the start of each day, which is too many for this method. You could take an H4 chart and do what Palmer did above, then highlight the weekly lines like this pic. And then place the box on, switch to H1, and then just play the boxes that are against the red lines.

Use the inputs to set how many boxes you want to see and the buffer. This pic has a 10 pip buffer on each side. For 5 digit brokers use 100 for 10 pips.

I may have another more flexible box, but have to search for it.
Click to Enlarge

Name: box.gif
Size: 19 KB

Siuol May 11, 2009 9:00pm | Post# 27

Suggestion
 
I just had something pop in my mind. What about having a trailing stop that is the same size of the distance of the box. So, say the distance from the high to the low of the box is 80 pips, why not put a trailing stop of 80 pips on your orders so as price moves so does your stop loss. So if price reaches +160 your stop loss will have automatically locked in +80 for you. Just a suggestion.

Ace284 May 11, 2009 9:14pm | Post# 28

I just had something pop in my mind. What about having a trailing stop that is the same size of the distance of the box. So, say the distance from the high to the low of the box is 80 pips, why not put a trailing stop of 80 pips on your orders so as price moves so does your stop loss. So if price reaches +160 your stop loss will have automatically locked in +80 for you. Just a suggestion.
The problem with that is that there can be pullbacks. Say price moves in your direction 120 pips and then temporarily moves back 80 pips. Your trailing order will be activated with +40. This means that you made 40 pips while risking 80 which is NOT good. Its all about money management and i find that trailing stops can sometimes mess with your plan and the emotions can severely screw up the strategy.

Ace284 May 11, 2009 9:19pm | Post# 29

hi this system sounds cool. just to confirm, so you only place 1 trade per week? or will you, say after you long, it reaches your tp, then there are signs of reversal and it hit ur lower point, will you short again?
Place both Short and Long and SL and TP for each as pending orders at closing of first 4hr candle. If you look at the first example on post 1 i did take both long and short.

** STUDY AVERAGE TRUE RANGE for weekly and you'll see when to not go for the other order if one TP has already been hit and when its okay.

adsanders May 11, 2009 9:22pm | Post# 30

The box I posted above will place a box at the start of each day, which is too many for this method. You could take an H4 chart and do what Palmer did above, then highlight the weekly lines like this pic. And then place the box on, switch to H1, and then just play the boxes that are against the red lines.

Use the inputs to set how many boxes you want to see and the buffer. This pic has a 10 pip buffer on each side. For 5 digit brokers use 100 for 10 pips.

I may have another more flexible box, but have to search for it.
Yes I see what you mean. We don't want the box to keep changing as bars are added with new highs and lows.

Siuol May 11, 2009 9:46pm | Post# 31

Enough said for me. I will stick to just placing the orders and letting them run and see what happens. I see that todays short is up +298 pips according to my broker (that's from the entry point at 149.48)

The problem with that is that there can be pullbacks. Say price moves in your direction 120 pips and then temporarily moves back 80 pips. Your trailing order will be activated with +40. This means that you made 40 pips while risking 80 which is NOT good. Its all about money management and i find that trailing stops can sometimes mess with your plan and the emotions can severely screw up the strategy.

Siuol May 11, 2009 9:54pm | Post# 32

How does one interpret ATR? I've never used it before.

Place both Short and Long and SL and TP for each as pending orders at closing of first 4hr candle. If you look at the first example on post 1 i did take both long and short.

** STUDY AVERAGE TRUE RANGE for weekly and you'll see when to not go for the other order if one TP has already been hit and when its okay.

Ace284 May 11, 2009 10:00pm | Post# 33

How does one interpret ATR? I've never used it before.
The range is obviously high minus low or the size of the bar. Of course average jus takes these movements and divides it by the number of bars.

*So if you are looking at weekly bars, and the ATR(14) is reading out 6.95 on GBP/JPY, that means that over the past 14 bars, the average size of each bar or average weekly movement is 695 pips.

There are some differences with different pairs.

GBP/JPY - 5.76 = 576 pips
GBP/USD - 0.0492 = 492 pips
EUR/USD - 0.0418 = 418 pips

forexisfx May 11, 2009 10:17pm | Post# 34

I think an EA to back test and forward test several currency would be beneficial.

EZTrades May 11, 2009 10:23pm | Post# 35

Man's Best Friend
 
Ace284 ,

Thanks for sharing your system ! I also work a day J-O-B and have limited time to look at charts as well, so this system will work out well for me . I have seen similar systems posted , but they are for break-outs on the London open , which is 2am here so that doesnt work . After studying the market for years , I have come full circle and discovered that " simplicity works " . Again, thanks for sharing your system on this thread .


EZTrades

sirwolf May 11, 2009 10:52pm | Post# 36

Winning Percentage since Dec?
 
Hello Ace! Could you give us an idea what your winning percentage has been sincce Dec? I am looking forward to testing this system. Thank you!

SirWolf

Only discovered this strategy at the end of Dec last year. Trading live since then.

Average = 274 pips per week

denverdude May 11, 2009 11:31pm | Post# 37

Two trades/week?
 
One question:
Do you have only two trades/week for a pair?

For example, after the end of the H4 candle, you place long and short.

If long is triggered and say, TP is hit or SL is hit and the trade is closed. Then, price comes down/goes up to the top of the box. At this point, do you open another long trade or is the long trade setup for the week is over as the TP/SL was hit.

Short order would be pending in this case and we would wait for it to be triggered. My question concerns about the entering long trade again at top of the box again.

Thanks.

nasir.khan May 12, 2009 2:39am | Post# 38

Man, this must be my lucky day. I found a thread earlier I like on the 1 hour chart but i like this one even better as it's a weekly chart with no indicators. The weekly chart is great for me because I work a full time job from 8:00am-4:30pm PST but I also don't want to be feeling like I have to always be watching my charts. I will look into this tonight for sure when I get home.

And yes, this may be great because g/j trends very strongly.
PST=Pacific Standard Time????

nasir.khan May 12, 2009 3:09am | Post# 39

3 Attachment(s)
Here is little backtest and JUST 2 Chopy trades.
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Size: 25 KB
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Size: 25 KB

jade-FX May 12, 2009 3:47am | Post# 40

Great
 
I really like your trading style. I am very glad you are from pakistan. I live in Islamabad and hope to meet you if possible.


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