Nomoretoxic's breakout

I checked the pairs and yes they all yielded 20 pips

you're on the right track

cheers

Thanks for the quick response.

will be out for a couple of hours.

I had a good day today. Hopefully you too...


Just remember - there will be losing days.

don't get discouraged.

you can still PM or post, I will reply when I come back.


Cheers

Hey Nomo,
Can we benefit from your experience here?
I have been monitoring your system along side the original straight breakout system (of which the originators had been trading profitably for some time).
Is it the current volatile market conditions that are favoring a straight breakout without waiting for the pullback?
How has your trading been over the last year. Do you find that the straight breakout way fails more often during normal/ranging periods?
Thanks.

First question - current market conditions are meaningless for a 5 minutes charts - you're trading in the middle of the storm - pure noise...so who cares? the market can be up/down/sideways...it won't matter.

I have been burned on a straight breakout way more often than a pullback. My forward-trading experience.

My trading over the last year - profitable.

hope it helps

Dear Nomoretoxic,

May I post some questions at the risk of adding detested complication:

1) Where really is the best place to put that risk stop: on the hi/lo of the candle before the BKO candle, at the halfway point of the box, at the other side of the box? ---And, is there anyway of really---really---knowing?
2) Where does one take profit: 20 pips, 30 pips, MA crossing, some sort of time stop, does one take off 1/2 and let the other 1/2 run, etc. etc. etc.? ---Money mge. and not trade entry seem to me to be the key to the system and that is discussed less than the entry.
3) Have you experimented with some filtering of the ranges to make for higher % trades: a certain box width, a certain direction for the BKO based on a trend definition, a certain time, etc. etc. etc.

Do you have any thoughts about these questions? ---I do think that if one could mechanically trade these BKOs on eight pairs at once for the London open and for the NY open with enough of a statistical edge, one would have a sustainable edge.

Thanks so much,

Lenoxer

Dear Thread,

And one more thought: it's interesting to me that Phil of the Newtron Bomb will tell you everything about how to enter his BKO trade but will tell you nothing essentially about his MM unless you pay his fee. Which indicates to me that the MM is the deal breaker---or maker.

L.

Lenorex

I suggest you read my post carefully. Many of your questions are answered in many of them. But still, I will give you a straight-shoot answer here on this post. Please always ask. I really don't mind but as I said before, even if I clear your confusion on what you're inquiring, still read the posts on this thread.

As I said before, the box is just a guide. The reason why some people are not successful trading the box is because they think the market will respect the box levels to the core. That's absolutely wrong. The box is a guide for your eyes only and it's just another way to spot price discovery by the market.

Price discovery = the market is pushing price to new highs/lows.

About stop loss, yes I understand, could be somehow tricky. Here's the thing. I Always chose to place the stop loss in a place where the market has already discovered (passed thru) that way, there's little chance the market will come back and sweep the stop. As a habit, I always look for the breakout candle, but it's not a hard and fast rule to place the stop at the other side. I give more weight to the levels (where the breakout candle begins) and sometimes you'll notice more than one candle starting at the same level. That's a sign of a good place to put a stop.

Another thing you might see is the breakout candle range(or the levels) is too long, probably for your R:R. Maybe is 40-50 pips and you're shooting for 20. Although R:R is unbalanced, I take those trades and in the worst case, I just adjust the load, so I can keep my risk in check. The trade off is that my profit will be less, but as I said, I keep my risk at level and I don't limit myself on not taking the trade.

More about stop-loss = the trick is not to create a hard and fast rule, but to place it in a level (price) that you see the market will doubly return .
Stop loss is more about price/levels than candles or chart formations.

even so..you will get stopped from time to time...there's no escape my friends...

I hope didn't sound too complicated.

About taking profits - I have notice 20 pips to be a very consistent measure, using the box. But you can go higher if you want. It's hard to tell and you must bear in mind that you're trading off 5 minutes, the middle of the storm. Using a moving average for tp is futile but that's a big subject and as I said before, won't jeopardize the integrity of the thread.

Scaling out is futile as well. Go all the way. Scaling out is in my book another crutch, a big one. I ether take my money off the table or lose. You will see in the long run it's worth it.

about trends = another useless thing for 5 minutes...this one I say it with all my heart. Again, another subject for a new thread.


About me experimenting, well I have experimented with all kinds of stuff. After a while I found out that I should redirect my efforts for consistency rather than wining every trade. I came up to this system after many years of forward testing

Backtesting is completely useless.

Statistics, filtering, etc ..all of what you have described here is exactly what I took off my head and my charts, long time ago. That very day is when I started to be profitable consistenly. .

Getting too technical and quite complicated is the reason why so many people lose in this business. That's why I constantly preach about simplicity.

In top of every advice on this post, if you like this system, just go for it. Think less and act upon. Close your eyes and deal with the market with no fear.

There's may people outhere trying to "understand" the market...they make all kinds of theories based on whatever they "belieive" .

At the end, the market will do whatever.

Like my mentor say "stop listening to others and start listening to yourself"

believe me it works

hope it helps

About this gentleman, I really have no comments other than, if he wants to charge a fee to show you that you should keep a healthy MM. to increase your odds on the long run, here you have it...cost $00000.

I assure you, there's nothing more about MM. If you want to use this all so venerable 2% rule, go for it. Nothing wrong with it. But I will add , you should also consider risk tolerance ( ho much you feel comfortable losing) and put more weight into that.

As I use more than one system, I shoot for 1% - 1.5% risk per trade...works for me.

MM.as a deal breaker, well it's been said many times, and yes I agree to some extend. MM should be something mechanical...automatic and seriously, I don't give it much color as is a requirement for trading. It's something like you must dress up before go to work. Be naked it's not an option.

That's all there's to know about money management
unless somebody has a crystal ball...(a working one) then we all can pool some money in to pay for the use....LOL


cheers

Hi All,

Although Phil Newton doesn't disclose his entire system his videos on the breakout methodology are very educational and I've found them to be very useful. Phil also trades several different strategies that require you to become a member of his website before you get the additional information. I am in no way connected with Phil Newton or his website but I do think Phil's videos are worth a look see.

Dear Nomoretoxic,

Thanks for the good and timely reply. I've indeed read the thread completely a number of times already. In fact, the method is so simple it is hard to believe in it. My mind, Talmudically trained, tends toward complication. The problem of course is my belief system. Your no-holds-barred assault on trading complexity is refreshing. Thanks very much again and the best of luck.

Lenoxer

No problem - always happy to help

EUR-USD - London session

here's an example of a long pullback - notice where I place my stop. As I mentioned before, Unbalanced R:R I take those trades by adjusting the load.

Just bear in mind I am watching the pullbacks as it forms - real time.

It's like letting the market come to you. As the market comes back to the south side I already have my stops-limits in place . No sweat - stress free.

by the way here's the rundown.

entry - 1.4705

stop-loss - 1.4750

exit - 1.4685

Oanda's feed by the way.

Here's the same charts I posted above.

The reason why I don't play straight out breakouts.

see for yourself.

pretty much self-explanatory.

here you go.

do you prefer to be cross-eyed looking at a zillion time frames???

After all, the chop will haunt you.


and....no squiggly lines will save you...I guarantee that.

cheers

OK, I'll bite. What do you do in that last screen shot? GBP-USD is doing the same thing.

for a box trade.

sit on my hands.

need to see a breakout at the box line for me to start a play.

That's what I thought. stay with the rules.

POSSIBLE TRADE?

Note that my stops-limits are in place already. But things might change.

let's see what happens.

Nomo, just want to be sure I have this down before making live trades, and this one seems very simple. The first candle wasn't a breakout candle because it never went more than 3 pips past the box? The second one was the breakout candle, even though it did not close outside the box. The pair has retraced back up into the box, so I set a stop sell order of the low of the candle, less 3 pips. So I don't have to stay glues to the screen if I don't want to, I've set TP and SL of 20. Also of interest is that anyone that had taken the straight breakout without waiting fro a retrace would most likely have been stopped out.
One final question. On the "other" thread that discussed a similar strategy which doesn't wait for a retrace, a poster said there were huge drawdowns on a similar breakout strategy in early 2007. Do you know anything about that?