Menu
Sister Sites

Options

Bookmark Thread

First Page First Unread Last Page Last Post

Print Thread

Similar Threads

Simplified original turtle trading system 42 replies

Support and Resistance Trading Simplified 249 replies

Simplified Trailing Stop 0 replies

Simplified Version Of (Fast) Stochastic 2 replies

a software that can offer a simplified rate of any currency in your screen 0 replies

Attachments: The Small Hours Simplified!
Exit Attachments

The Small Hours Simplified!

  • Post #1
  • Quote
  • First Post: Edited Feb 13, 2011 11:26pm Feb 11, 2011 3:28am | Edited Feb 13, 2011 11:26pm
I'll post Uptrend first, and down trend in another post on this thread:
Small Hours rules simplified:

Definition of acronyms:

HH5: Highest High of the last 5 bars
LL5: Lowest Low of the last 5 bars
ATR: Average True Range

Small hours Up Trend Setup Rules:
NOTE: The ATR will be used to identify the small hours price range cycles.

Please click the link below to be taken to the post with the revebalized rules:
http://www.forexfactory.com/showthre...=1#post4395337

1. The HH5-LL5 must be less than the ATRx1.5 as of the most recently closed candle
a. Mouse over setup bar to get ATR value
2. The high of the most recently closed candle must be less than HH5

3. The close of the most recently closed candle must be greater than the 20SMA or 40SMA (can be both)


4. If any one of these conditions is not true, setup is not valid

Entry:
1. Buy at the HH5 plus 3 pips plus the spread (open 2 trades)

Initial Stop loss:
1. Set stop loss at the LL5 minus 3 pips, minus spread

Note: If TP’s or stops are not hit, change your stop after the close of each bar as follows: Move stop to the LL3 minus 3 pips, minus spread.

Target Profit’s (TP1, TP2):
1. First TP is calculated by using entry price plus the value of ATR x .75
2. Second TP is calculated by using entry price plus the value of ATR x 1.5
When first profit target is hit, move stop loss on remaining order to break even. Continue to move stop to LL3 as new bars form.
Good Luck!
Attached Image (click to enlarge)
Click to Enlarge Name: USDCHF.JPG Size: 88 KB
Small Hours rules simplified:
4H charts are used and on any of the 6 major currency pairs
Definition of acronyms:
HH5: Highest High of the last 5 bars
LL5: Lowest Low of the last 5 bars
LL3: Lowest Low of the last 3 Bars
ATR: Average True Range

Small hours Down Trend Setup Rules:

NOTE: The ATR will be used to identify the small hours price range cycles.

1. The HH5-LL5 must be less than the ATRx1.5 as of the setup bar
a. Mouse over setup bar to get ATR value
2. The low of the current closed bar must be greater than LL5
3. The close of the setup bar must be less than the 20SMA or 40SMA (can be both)

4. If any one of these conditions is not true, setup is not valid

Entry:
1. Sell at the LL5 minus 3 pips minus the spread (open 2 trades)

Initial Stop loss:
1. Set stop loss at the HH5 plus 3 pips, plus spread
Note: If TP’s or stops are not hit, change your stop after the close of each bar as follows: Move stop to the HH3 plus 3 pips, plus spread.

Target Profit’s (TP1, TP2):
1. First TP is calculated by using entry price minus the value of ATR x .75
2. Second TP is calculated by using entry price minus the value of ATR x 1.5

When first profit target is hit, move stop loss on remaining order to break even. Continue to move stop to HH3 as new bars form.
Good Luck!
Do you have a specific time you look for the set-up bar?
Hi Colostarr,
Thank you for sharing your system.
You write: "1. The HH5-LL5 must be less than the ATRx1.5 as of the setup bar "

Could you please give an example of how you calculate. I do not quite understand.
Thank you on advance for your answer.
In a sideways market the current bar is always the potential seup bar. Remember these are 4H candles. I find that Monday's and Tuesday's are prime times to look for these. As the setup's appear I will post charts detailing the potential setup. In ten days, I've had 9 triggers with one loss -22 pips on the USD/JPY pair

Quoting Cashcalf
Do you have a specific time you look for the set-up bar?
The ATR is used to determine market volatility. You take the value of the highest high of the last 5 bars, minus the lowest low of the last 5 bars and you get a total number of pips moved in those last 5 bars. In this case let's say it's 50 pips. You then mouse over the setup bar, get your ATR value and multiply it by 1.5. If the sum of this value is greater than your HH5-LL5 (50 pips) then condition 1 is met. If your pips moved is greater than ATR x 1.5, the market is too volitile and you should stay out anyway. Hope this clarifies!

Quoting jeff75
Hi Colostarr,
Thank you for sharing your system.
You write: "1. The HH5-LL5 must be less than the ATRx1.5 as of the setup bar "

Could you please give an example of how you calculate. I do not quite understand.
Thank you on advance for your answer.
Indicators:20SMA, 40SMA and ATR with a period of 20.

Open the Data window in MT4 to get an accurate ATR value as of the setup bar.

The Data window looks like a weapons scope in the upper left hand corner of MT4.

Mouse over it and it says "Data Window"
Look at the attachment. In this chart of the USDCHF 4H. Count back 5 bars from the setup bar. The highest high of these 5 candles is .9580, the lowest low of these 5 candles is .9522
.9580 -.9522 = 58 pips

ATR as of this candle was .0039 (take the decimal out)
39 x 1.5 =58.5

Pips moved = 58
ATR value x 1.5 = 58.5

ATR value is higher, not by much but that's ok! Condition 1 is met and market is quiet enough to trade. Print the rules for the uptrend, and see if you can find if the other 2 conditions are met! I am available for 2 more hours before heading out to work (where I secretly trade in the back ground anyway!)

The setup rules can seem pretty daunting at first, but once you have spied a few you are really only looking for 3 conditions. If they exist set your stop / limit orders and watch the pips pile in. The attached chart was from a signal I took and both TP's were hit for a total of 85 pips. My goal is 50 pips daily!
Attached Image (click to enlarge)
Click to Enlarge Name: USDCHF.JPG Size: 88 KB
Thank you very much. Your explanation is very clear.
As luck would have it we have a valid setup on the USDCAD. The pips moved is actually higher that the ATR value but only by .5 pips. I have taken several of these and they have all hit. Please see attached slide and see if it makes sense to you. The trade that is showing active right now is from another method I use. Please disregard the live trade lines!
Buy at .9988
Stop at .9939
TP1 = 1.0007
TP2 = 1.0025
Attached Image (click to enlarge)
Click to Enlarge Name: USDCAD 2.JPG Size: 98 KB
Big news release for USD and CAD (Trade balance) at 1330 GMT. Beware. If trade has not triggered by 1300 GMT cancel pending STOP orders!
Hi,
Have one question.
For how long is this setup valid?
Is it until the start of the next 4-hour bar?

Regards
Setups are valid for the next 3 bars

Quoting again
Hi,
Have one question.
For how long is this setup valid?
Is it until the start of the next 4-hour bar?

Regards
Quoting Colostarr
Setups are valid for the next 3 bars
Ok, so always four 4-hour bars after the setup candle or three?
Now I get confused, sorry....
Sorry, it is the language problem!
When I read it again I understand that you mean 3 four hours bars after setup bar....

Regards
In your first post: http://www.forexfactory.com/showpost...55&postcount=1

It seems to me that your second condition isn't met.

HH5 = .9580
High of current bar = .9595 (approx.)

and your rules state:
2. The high of the current closed bar must be less than HH5

If I am not mistaken, the current bar is the one after the setup bar, right? Or do you mean the current bar close value must be less than HH5?

Also, how long do you keep your pending orders before you delete them, if they are not hit?
The rules speak to the current bar, this is the setup bar. Ignore the bar after the setup bar in the chart example.

Quoting spaizkadett
In your first post: http://www.forexfactory.com/showpost...55&postcount=1

It seems to me that your second condition isn't met.

HH5 = .9580
High of current bar = .9595 (approx.)

and your rules state:
2. The high of the current closed bar must be less than HH5

If I am not mistaken, the current bar is the one after the setup bar, right? Or do you mean the current bar close value must be less than HH5?

Also,...
Im new to mt4 and forex factory

im trying to follow you but my charts and your charts candles do seem to match up. How can I get them to match.

Im using alpari server but on some candles the bodies are different then yours
The setup bar will have already been closed. The next three bars AFTER the setup bar!

Quoting again
Ok, so always four 4-hour bars after the setup candle or three?
Now I get confused, sorry....
Sorry, it is the language problem!
When I read it again I understand that you mean 3 four hours bars after setup bar....

Regards
Also the trades are valid for the next 3 bars after the setup bar closes.

Quoting spaizkadett
In your first post: http://www.forexfactory.com/showpost...55&postcount=1

It seems to me that your second condition isn't met.

HH5 = .9580
High of current bar = .9595 (approx.)

and your rules state:
2. The high of the current closed bar must be less than HH5

If I am not mistaken, the current bar is the one after the setup bar, right? Or do you mean the current bar close value must be less than HH5?

Also,...
  • Post #20
  • Quote
  • Edited 7:52am Feb 11, 2011 7:40am | Edited 7:52am
If the pending orders are not hit and the next bar also is a valid setup, is it then allowed to close the pending orders and make two new? (E.g. the entire setup is shifted one to the right)

and shouldn't rule number two be:

2. The high of the current closed setup bar must be less than HH5
0 traders viewing now