This thread is dedicated to my only compact trading strategy called SBOR. Unlike many other trading strategies this is a statistical approach to making the right trading decisions.
If price breaks out from and later returns into a session range, few pips below/above the breakout candle's low/high, price will fall/rise further as much or more as the size of the breakout candle, if certain conditions are met.
How do we know what the conditions are for winning in this game? We register past session and candle OHLC data and register the best price before hitting our SL. By creating meaningful variables based on OHLC and session data and the relationship between these two, we can tell winning candle & session combinations from the loser ones. This we can do as we know which combinations were losers and which ones were winners in the past.
So this strategy is a reverse strategy (back into a session) that is based on candle and session analysis and probabilities based on past data. Also, I would like to emphasize that this strategy is neither a breakout strategy, nor a counter trade strategy, nor a trend trading strategy. It is a scalping strategy that aims to harvest pips in favorable market conditions.
About 18 months ago I devised a strategy that did not raise much attention here at FF. Original SBOR thread (for EURUSD only): http://www.forexfactory.com/showthread.php?t=296776
Due to technical issues, I could never prove that my approach was right. Technical issues were lack of input data and an EA to back test and forward test the strategy. When I formed the strategy, the input data was entered by hand, data read from charts, giving me weeks of work. These issues have been partly resolved by now. Just one note before people start to have doubts: this strategy gives the near exact same results on back test and forward test, on live or demo account. Open price testing method is fast and sufficient.
This is how it works (overly simplified example, see picture):
- red vertical line: candle broke through the session border (the previous session, not the one that it is in)
- sell stop order is placed below this candle (assuming conditions are met) by x pips. We wait with the pending orders after candle close.
- TP level is determined by probability (based on plenty of similar candles: what was the best average TP level? It works, although it can be fine tuned)
- SL is above the BO candle by x (few) pips
Sessions to trade:
There are 4 sessions to trade [GMT+1, DST: GMT+2 spring and summer in Europe]. The EA comes with a check box for getting this right, however it is easier to manage this for those with brokers in Europe as changing times can disturb this strategy a lot).
- Asian full from 1am-8am,
- Asian late 5am-8am,
- EU 8am-14pm,
- Big dog 14pm-16pm
Eventually, in the full version EA anyone can define a session. These are the sessions I started with but there is a chance that the strategy works well with daily or any sessions a trader can think about.
Candles to trade (single and combined candles):
We trade either a single candle [the first candle that breaks through the session range by min. x (few) pips] or the two candles that follow the single breakout candle [only if the first candle does not qualify for trading]. The candles qualify for trading based on candle OHLC and session (high/low) data.
SBOR EA and Scripts:
I am forever thankful to Hanover who volunteered to code the EA for this strategy.
*** I am also thankful to Billbss who actually made the arrangement with Hanover to code the EA. I am thankful to Giraia_br as well, as his questions made me come up with plenty of explanations so the strategy has become more and more elaborated theoretically ***
Hanover (David Louisson) is by far the most professional and responsible coder I have ever worked with. His earlier and latest master pieces can be found here (many I use myself): http://www.forexfactory.com/showthread.php?t=280437
Unfortunately, due to his busy schedule he could not continue to develop the EA further but generously consented to share the EA on FF.
I have few ideas that should be implemented in the EA and the scripts to call the SBOR system complete. These are not endless ideas because the SBOR system is compact and a closed up system with fix processes. Hanover's original scripts are attached in a zip file, the rest I modified but I am not a coder so you can double check the differences.
Important note: any results of the current EA can not prove the system right or wrong (you will find it a winner from the time it was designed though with a BE activity for the past 5-6 months). The system is a framework thus the EA is a reflection on how the trader utilizes this particular framework. It will become obvious once one understands the full process of strategy creation. You can back test the EA but be aware of testing rules described in the documents. Notice however that, technically speaking, it is not a complete system yet. Some more coding is required before we can call it complete.
Test results of the current SBOR EA:
- Ran between: 13.03.2012 - 13.07.2012 – tested for 4 months, ran non-stop on a server, all possible trades were taken
- No. of trades: 121
- Risked: 1% of equity
- Max DD: ~14%
- Max profit: ~15%
- Current equity: ~BE,-137$, equals to 2 losing trades (BE does not mean this strategy can achieve BE only, I will explain this later)
- On Demo and Live: nearly identical results, live did better but no significant difference experienced.
For now, I would like to draw attention to something important regarding the results: not one single indicator was used to achieve this and the settings are considered to be outdated. In the EA, I would like to use indicators only to filter out some bad trades.
Excel, including formula building (simple stuff that goes complex).
Coding skills to implement Excel formulas as mt4 code.
- EA and file specs.doc
- SBOR calculator only.xlsx
- SBOR EA - modified by Rewand.mq4
- SBOR_test_1_modified by Rewand.mq4
Hanover's original scripts
- SBOR EA.mq4
- SBOR_test_1 .mq4
Risk: is yours, as always. I do not take responsibility for whatever results the users of this strategy/EA achieve. If you do not know what you are doing, sooner or later you will fail in Forex.
Copyright: I maintain the right to sell/distribute any products/services related to this strategy, including the SBOR EA and SBOR scripts. I do not have such plan because I believe there are plenty of free systems to make money with but be forewarned that this thread has to be the only place for distribution.
What I am looking for:
I hope that someone will take interest in completing the scripts and work on that for some time. What has to be done is explained in the attached documents, what is not, I can explain later. All results of this work will be shared.
If you are a trader only, you can still familiarize yourself with the strategy and its elements but I have to draw your attention to the fact that this strategy requires the codes to be fixed/completed first.