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Simple Breakout Method

  • #1
  • First Post: Edited Jul 25, 2007 1:14am Jul 24, 2007 11:52pm | Edited Jul 25, 2007 1:14am
This system is not new. I'm just surprised the setup has not been shared here before, or maybe i just din search hard enough. Anyway this will be the last method i'm sharing.

The method is a simple breakout method. All you really need is:

- Daily chart (line chart)

simply note in your mind that

- if price swing high keeps getting higher...uptrend
- if price swing high keeps getting lower...downtrend

Use your choice of MA as a trendsetter i.e. filter


The setup...
Attached Image
  • #2
  • Jul 24, 2007 11:55pm Jul 24, 2007 11:55pm
For a clearer example, i have attached a chart taken from daily PA of UJ. 3mths worth of trend.
Attached Image (click to enlarge)
Click to Enlarge Name: sample2.jpg Size: 32 KB
  • #3
  • Jul 25, 2007 12:09am Jul 25, 2007 12:09am
A bigger picture for UJ trends
Attached Image (click to enlarge)
Click to Enlarge Name: sample3.jpg Size: 39 KB
  • #4
  • Sep 2, 2007 7:30am Sep 2, 2007 7:30am
hi jest.....

thanks for sharing your strategy...
do you trade with real account & in what pairs?
how do you initiate a trade? are you using market on open?
thanks in advance
"Live is for living not for working"
  • #5
  • Sep 3, 2007 5:47pm Sep 3, 2007 5:47pm
Hi Jest,

Line graph shows the close price. Are you saying the break out of close price is enough. How about the upper and lower shadows? Don't they need to be cleared?

What will be the stop loss strategy?
Haste not to Enter AND Haste not to Exit !-TradeStar
  • #6
  • Sep 3, 2007 8:59pm Sep 3, 2007 8:59pm
Hi very good simple method, but your first picture exactly like elliot wave... is it elliot wave base?
Gold is Money but Money is not Gold
  • #7
  • Sep 10, 2007 7:08am Sep 10, 2007 7:08am
Quoting jest1081
This system is not new. I'm just surprised the setup has not been shared here before, or maybe i just din search hard enough. Anyway this will be the last method i'm sharing.

The method is a simple breakout method. All you really need is:

- Daily chart (line chart)

simply note in your mind that

- if price swing high keeps getting higher...uptrend
- if price swing high keeps getting lower...downtrend

Use your choice of MA as a trendsetter i.e. filter


The setup...

thank you very much for this very simple system but......

1) will it work on 1hr chart ? if yes, what filter will you suggest ?

2) for this LINE CHART, should i use Close, Average Price or Candles ?

candles' prices can be a huge difference from Close or Average so which one will work ?
  • #8
  • Sep 11, 2007 8:38pm Sep 11, 2007 8:38pm
Hi,

im sorry, i've been away, i did not know that the method did attract a few interests.

Quote
do you trade with real account & in what pairs?
how do you initiate a trade? are you using market on open?
Yes i trade with a real account, daily bars.

Well this is one of the setups that i look at. I trade price swings mainly, you can check my journal, in the journal section to get a brief picture.

Quote
Line graph shows the close price. Are you saying the break out of close price is enough. How about the upper and lower shadows? Don't they need to be cleared?

What will be the stop loss strategy?
yes i preferred to have a line chart for a clearer view of the swing, but you coud do with OHLC or candles.

no you need not worry abt spikes because your stops should be placed at the previous high of a prominent swing.

Quote
is it elliot wave base?
Umm, no, i thinks its closer to swing trading. I'm not very well versed in elliot.

Quote
will it work on 1hr chart ? if yes, what filter will you suggest ?
Well whats the probability of catching a good trend? no filters pure PA...the setup is really basic. you gotta put more effort on the trade management itself. hope this explains.

Quote
for this LINE CHART, should i use Close, Average Price or Candles ?
I use price close. Attached a picture of ohlc and line charts...
note that line charts could express SR areas also the breakout tends to show a a clearer sequence, well it does carry more whipsaws but with proper MM and disciplined action sequence, one could easily profit from trading this very simple setup.

Attached Image (click to enlarge)
Click to Enlarge Name: usx.jpg Size: 91 KB
  • #9
  • Sep 12, 2007 3:19am Sep 12, 2007 3:19am
thank you very much for your info, JEST......

reason why i ask is the big difference in pips for candles VS the other prices at peaks and dips (i'm with Oanda). for example......

on 13 June (dip) for Eur/Usd=

close price = 1.3310

average price = 1.3301

candle price = 1.3262 (almost 40 pip difference !!!)


could you tell me :

1) where i can find your journal ?

2) which timeframe for the chart to use ?

3) is the strategy like buying when price is slightly above the immediate previous high (not all-time high) and selling just below the immediate previous low (not all-time low) ?

sorry for all these tedious questions, thanks again.
  • #10
  • Sep 12, 2007 5:11am Sep 12, 2007 5:11am
hello,

i use daily candles,

my journal
  • #11
  • Sep 12, 2007 8:55am Sep 12, 2007 8:55am
Quoting jest1081
hello,

i use daily candles,

my journal
thanks again for your journal but i think i like your simple breakout method better. i find it safer too ?

do you think it would be alright to do the method in lower timeframes like even 1 or 3 hour charts ?

too bad the candles make the line chart rather 'choppy'.....

many thanks and be well.
  • #12
  • Sep 12, 2007 9:02am Sep 12, 2007 9:02am
Classic S/R tading great stuff
.
  • #13
  • Sep 13, 2007 5:46am Sep 13, 2007 5:46am
Quoting bullrock
Classic S/R tading great stuff

is this something like trading based on fractals ?

like selling below previous low and buying above previous high ?
  • #14
  • Sep 13, 2007 7:09am Sep 13, 2007 7:09am
Quoting findcount
is this something like trading based on fractals ?

like selling below previous low and buying above previous high ?
What fractals??? Why not keep it simple and speak about plain simple price action??? (That works since several hundred years) It is Microsoft custom to keep renaming the same crap just to sell again the same crap under different cover.
.
  • #15
  • Sep 13, 2007 7:28am Sep 13, 2007 7:28am
Quoting bullrock
What fractals??? Why not keep it simple and speak about plain simple price action??? (That works since several hundred years) It is Microsoft custom to keep renaming the same crap just to sell again the same crap under different cover.


very true......i'm guilty of thinking things that are simple don't work as well as complex methods...........how wrong !

so basically, this method means you buy when price moves above the immediate previous high and then sell below the immediate previous low, right ?

it's that's indeed the case, then simple and we know when to get in.....only need to figure the stoploss really need to be so big ?
  • #16
  • Sep 13, 2007 8:08pm Sep 13, 2007 8:08pm
Quoting findcount
very true......i'm guilty of thinking things that are simple don't work as well as complex methods...........how wrong !

so basically, this method means you buy when price moves above the immediate previous high and then sell below the immediate previous low, right ?

it's that's indeed the case, then simple and we know when to get in.....only need to figure the stoploss really need to be so big ?
Hello, you can figure stop loss in many ways, if you have a big appetite for risk then you can use ATR of maybe 14 bars? I'd reckon using swings as it gives a better technical zone to indicate that you are wrong.

Attached EURUSD daily bars breakout setups. Do we have loser trades, well of course.
Attached Image (click to enlarge)
Click to Enlarge Name: eu.jpg Size: 50 KB
  • #17
  • Sep 13, 2007 8:29pm Sep 13, 2007 8:29pm
awesome man, looks good to me! i recently started demoing and this looks like a solid way to trade breaks at S/R levels for me. Thanks!
  • #18
  • Sep 14, 2007 1:39am Sep 14, 2007 1:39am
Quoting bullrock
What fractals??? Why not keep it simple and speak about plain simple price action??? (That works since several hundred years) It is Microsoft custom to keep renaming the same crap just to sell again the same crap under different cover.
Lets sit down and wonder why trading was so difficult in the first place? lol. There are tons of workable systems, from simple, complicated to the most unusual, fact is, many of us here fail due to....fear of loss, fail to cut loss, poor Risk and Trade management....etc etc. Now how many times have we seen what i've just written.
  • #19
  • Jan 3, 2008 1:49am Jan 3, 2008 1:49am
bumping this thread so it is close to Kharvell's one ^^
  • #20
  • Jan 3, 2008 8:47pm Jan 3, 2008 8:47pm
Hi jest, I always say simple can be a good thing. Patience coupled with simplicity can be a profitable thing.






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