Extracted Thread (per thread starter's request)

A Note From the OP:

I'm here to state for the record, that I still consider SSBO to be the best and most reliable way to trade I have ever seen. To all newcomers, I can assure you that this teaching thread has more than enough information to transform your losing trading experience into a winning one. The blueprint is laid out for you, starting right below this paragraph. I still trade SSBO full time, and so can you.

Forexhard
June 19, 2024June 19, 2024


SSBO - The Stairstep Breakout System

WELCOME:

If you are like most new visitors, you have stumbled onto our little corner of the web after encountering the usual number of trading systems that looked great at the outset, but after a dozen or so pages you suddenly realized that it no longer resembled the system offered back on Page #1. And then you probably asked yourself (as we all have), why was the system even offered in the first place if it could be so easily twisted out of shape in less than a week. And then there are the systems where the thread starter tries to trick you into leaving the Factory (Hey, let's start a Skype group!) after a few weeks to join them in a "private" club by "invitation only" where you can get special "insider" trading tips. For a price, of course. And don't even get me started on the threads that change indicators so fast and so frequently that you're saving a new template 10 times a day. And how about my personal favorite, where the OP starts off by saying they have traded "this way" for months or even years with a high degree of success, but then after a few weeks into the thread they sign off, saying they have found another system that works even better. WTF???

Are you finally fed up yet? You're not alone. The disillusionment you are feeling by now is perfectly understandable, and you are not the first person to wonder if a practical thread exists that teaches real market fundamentals that won't change with the wind, or whether it's possible to find an honest and altruistic mentor with no hidden agenda.

It does exist. You have just found it. Welcome to Stairstep Breakouts, or SSBO.

OVERVIEW:

The underlying concept behind SSBO is so simple it's hard: Wait until the market is doing "nothing" (relatively speaking) before setting out your plan of action. In other words: 1) When the market is active we do nothing; 2) When the market does nothing, this is when we plan for our next trade.

For SSBO, this "nothing" comes in the form of Consolidation Zones, or CZ's.

But in order to trade with CZ's, you must first learn to identify and classify them. The purpose of this thread is to teach you how to correctly identify only the very best CZ's, and then how best to exploit them. This is naked trading in it's most purest and simplest form. This is the focus of this thread and this system. Nothing else is promised or implied.

WORDS TO LIVE BY:

In order to fully understand this system it is essential that you spend one full week experimenting with the trading details found in the first 8 posts (posts, not pages). You must become proficient at picking out these types of Consolidation Zones (CZ's) regardless of the pair or the Time Frame by simple visual confirmation alone -- aka, Naked Trading. Posts 1-8 teach you how to do exactly that. This part truly is the essence of Stairsteps, so skipping over this phase of your self-training is only going to cause you a lot of grief later on down the line. So please, no shortcuts. Stay with the program and get this part down solid before continuing past the first couple of pages. If you find yourself on Page #10 before committing to this week of practice, you have gone too far. Stop, come back, and put in the week of practice before going any further. This is your primary confidence building step. It starts right now. If you pass it over, then you can't expect to have the required confidence for what comes after. Fully 90% of all belligerent comments and noob questions (and failed trade examples) found in this thread come from people who skipped over this part and just read through it without actually putting in the suggested week of practice.

As far as the SSBO system goes, we are closing shop here as literally the only system known to exist at the Forex Factory where the rules have remained unchanged throughout the life of the thread. And that, my friends, is really saying something! The SSBO self-training template is spelled out in the very first post, right above where you are now reading.

******************************
The original first post:
******************************

Some traders swear by man-made indicators. Some swear by technicals and analysis. Today I will be presenting one of the ways I trade using breakouts based only on pure price action and simple hand drawn breakout boxes.

This method is so simple it's hard. Most traders overlook this style of trading not because it is ineffective, but because it just isn't as "sexy" as a method that employs lots of colorful lines and graphs and special lingo and complicated algorithms. This system may not be sexy (it isn't), but it is highly effective -- for me. YMMV.

Let's get right to it.

Pic #1 is highlighting the type of consolidation zones we are looking for. There is no hard and fast rule here. Simply "eyeball" the chart and pick out these types of zones, and then cover them with a rectangle from your MT4 tool bar. Later, this rectangle will be a uniform height, but for now just draw the boxes free-hand and pick out as many of these zones as you can.

This system will work for any pair on any TF. But for those who wish to follow me I am showing a G/U M15 chart from this week (ending July 1).

Step 2: Create a uniformly sized small rectangle marker from your MT4 tools. Make the box 30 pips tall and wide enough to cover several M15 bars.

Step 3: Now we are going to create a much wider artifact, although the height will still be just 30 pips. I make mine wide enough to cover 3 days worth of chart. No special reason, it's just easier to move it around that way.

Now take the small artifact and move it around the chart. Use it to highlight these same types of consolidation zones as shown in these pics. This is an actual step in this system. Learn it well.

Once you have picked out a good consolidation zone it's time to overlap the 2 artifacts. The small one will already be in place from following the earlier steps. So now all you have to do it place the large one on top as shown in the pics.

ups...saw you started posting

The results speak for themselves...

So far all of my examples have been of past breakouts. So I won't be accused of just cherry-picking, here is my final example: a possible breakout scenario currently in progress as of 16:00 7/1/2011 on the G/U M15.

The floor is now open...

looks interesting but just wondered - wouldn't this system only work in a ranging ziz-zag type market like we've seen over the last few days?

rgds

Highly intriguing system actually. Love how it plays off supply/demand zones and price action.

How would one transverse it over to an M5/M1 TF?

As well, what are exit signals and how do we avoid false breakouts?

Excellent post. Excellent thinking and system.
Well done. Keep it simple , lets hope this post does not become complicated with a multitude of indicators, ea.s and so on.
Thanks for sharing your idea.

Thanks for this simple trading method,hope it won't get harder than this LOL.Just one simple question,how do u get to know which direction the price is going to take at the BO point?

Here is how this same artifact looks at the close of the week. Not one thing has been changed, just that more candles have been added since the last time I attached this chart here. Notice how price has once more tested the upper boundary of the marked area (white circle).

Remember, this is happening now.

These types of consolidation zones happen all the time. How often they happen, or how prolonged they are, will depend on the pair and the time frame.

I can not predict when a consolidation zone will form. No one can. But I absolutely can predict what will happen afterwards: breakout.

Thanks for the kind words.

Consolidations occur in every TF, and personally I prefer M15 or higher.

And I am glad that you noticed the retracements as well. In every example I gave the price retraced back to the blue breakout zone. You would be surprised to know how often this happens.

I can predict a breakout by now almost with my eyes closed. Likewise, I predict this thread will die off relatively quickly; I will be very surprised if it will even reach 10 pages long. This method isn't at all flashy or sexy, and that seems to be what everyone wnats in a trading system: lots of bells and whistles and flashing lights. Me, I prefer making money, and I can do it without even a single indicator. Anyone can. I just showed you how. But it's too simple, so it can't possibly be a good system, right? Right????...

This is a common question. And in my opinion, this is where most systems go wrong. Because it assumes that I, as thread starter, have an answer for every question. And it assumes that I have a one-sized-fits-all exit strategy. This is not your fault that you think like this. Every thread goes in this direction -- every one. But not this one. I will not have a suitable answer for every question, and I will not attempt to teach a system that everyone will trade exactly the same as me. It's just not possible, and this is why systems die the death over time. Because we are all different; we are not the same; and it is impossible to teach even one person to react to the markets exactly like I do, much less a hundred. The best I can do is show the way. A way. My way. What you guys do with it after that in the privacy of your own home is up to you.

Thanks ForexHard,
Even though I am still demo trade and have absolutely no experience, but i like what i see from your way. System with lots of colorful stuffs do not suite me well. I will try to apply your method into my trader's toolbox (along with Pin bar, IB, Fib Ret that I am still reading from other threads)

once again, thanks for sharing

Hello Kevin. Thanks for the kind words.

Yes, simple is always best. If more new traders realized how much all those indicators don't help, they would toss them out and start making real pips almost immediately. You are on the right track, at least! Good for you.

The system I am describing here could be compared to Inside Bars. I am using M15, but if you are trading IB's on H4 it basically comes out to the same philosophy, although my method here is a little more flexible than a very strict IB style. But when you consider that there are 16 M15 bars in every H4 candle, it can be said that the two systems are quite similar (but not identical.)

The best of what they have in common is that neither system uses outside indicators, and both rely solely on price action. If you can continue in your trading life from this point forward and never use another man-made indicator besides candles or bars, you will be light years ahead of everyone that pollutes their charts with them.

FH

Well, after playing around with severall EA's, I like the simplicity of this system and I'm also becoming aware off the need to get rid of all the indy's and ea's, so I'm going to test it on demo.