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4H Box Breakout

  • #1
  • First Post: Edited Aug 29, 2010 12:53am May 11, 2009 4:20pm | Edited Aug 29, 2010 12:53am
I've seen breakout strategies for daily and weekly. I've never seen one like the one i'm about to present.

DRAW a box connecting the high of the first 4hr candle(00:00) of the week with the low along with a buffer of 20 pips on each side.
The week starts at the open of the Australian session.
If I had a penny for every time someone has asked which candle it is..i wouldn't need to trade forex to make money. For the next person who is going to ask, follow these instructions.
Download an FXDD platform. Press Ctrl+y on a 4hr chart. Lines will magically pop up and at the start of every week the first 4hr candle should form on the line. This is the candle you use for the High and Low.

Box Forming Times:
GMT- 21:00 to 01:00
EDT - 17:00 to 21:00
FXDD time - 00:00 to 04:00

Use Time zone conversion to find out your specific time.

DO NOT ask when the bar forms and when it closes as its been answered MULTIPLE times. I post every week when the bar closes. If you're not willing to go through the thread or wait one week for my post on when the bar closes than this system isn't for you.
I'm sorry, but it's just gotten to a point where people ask every time.

Some brokers begin operating an hour earlier then FXDD or later. If you first 4Hr bar closes at 00:00 GMT, then that's not the right candle. The best thing to do is to download an FXDD demo platform and use that as reference.
Rules:
- Add a buffer of 10-20 pips on each end of candle
- Buy on upper break of weekly box (including buffer+spread)
- Sell on lower break of weekly box (including buffer)

SL - other side of Box
TP1 - 1x box size
TP2 - 2x box size
TP3 - 3x box size
TP4 - 4x box size

This system works on many JPY pairs.
GBP/JPY
EUR/JPY
AUD/JPY
CHF/JPY
CAD/JPY
**GBP/JPY is the best pair.
May work on other pairs, testing is required however.


I like to use 3x-4x box size as TP.
I take don't profits at 1x size of box because larger reward is key.

I move stop to BE after 1x has been hit.

Risk Management (to find out your position size)

(Account Balance * Risk percent)/Stoploss = mini lot size

Advantages
- 30 mins a week
- no worrying about charts filled with indicators
- higher reward than risk on EACH trade
- easy to back test

Important:
Probability
Q&A (thanks to fxann)

Indicators below, thanks to fx2248 for your help.

Feedback would be great from all you FX experts and GOOD LUCK!
Attached Image (click to enlarge)
Click to Enlarge Name: ex.gif Size: 16 KB
Attached File(s)
File Type: ex4 1 Box 4 A(2).ex4   7 KB | 17,128 downloads | Uploaded Aug 24, 2009 8:27pm
File Type: ex4 1 Box 4 B(2).ex4   7 KB | 14,670 downloads | Uploaded Aug 24, 2009 8:28pm
  • #2
  • May 11, 2009 4:27pm May 11, 2009 4:27pm
What have been your results? Trading live?
  • #3
  • May 11, 2009 4:30pm May 11, 2009 4:30pm
Only discovered this strategy at the end of Dec last year. Trading live since then.

Average = 274 pips per week
  • #4
  • May 11, 2009 4:33pm May 11, 2009 4:33pm
If you take a glance at a chart with lines separating the weeks then u'll see that with GBP/JPY the trends are great.
  • #5
  • May 11, 2009 4:57pm May 11, 2009 4:57pm
Man, this must be my lucky day. I found a thread earlier I like on the 1 hour chart but i like this one even better as it's a weekly chart with no indicators. The weekly chart is great for me because I work a full time job from 8:00am-4:30pm PST but I also don't want to be feeling like I have to always be watching my charts. I will look into this tonight for sure when I get home.

And yes, this may be great because g/j trends very strongly.

Quoting Ace284
If you take a glance at a chart with lines separating the weeks then u'll see that with GBP/JPY the trends are great.
  • #6
  • May 11, 2009 5:20pm May 11, 2009 5:20pm
Quoting Siuol
Man, this must be my lucky day. I found a thread earlier I like on the 1 hour chart but i like this one even better as it's a weekly chart with no indicators. The weekly chart is great for me because I work a full time job from 8:00am-4:30pm PST but I also don't want to be feeling like I have to always be watching my charts. I will look into this tonight for sure when I get home.

And yes, this may be great because g/j trends very strongly.
I've been there, trying to force trades into my schedule. I'm sure u've heard the words Money Management before but even the concept of that is difficult when you have a full time job. My advice to you would be to just follow the system, place the orders every week as well as the SL and leave them. Don't let your emotions or someone's analysis force you out of the trade. Good luck to you sir
  • #7
  • May 11, 2009 5:41pm May 11, 2009 5:41pm
Since different brokers use different start times, what time and day are you using for your trdes?

Sundays count?
  • #8
  • May 11, 2009 5:48pm May 11, 2009 5:48pm
Quoting redhouse
Since different brokers use different start times, what time and day are you using for your trdes?

Sundays count?
I'm at EST time so my first 4hr bar is formed from 5 -9 p.m on sunday evening.
  • #9
  • May 11, 2009 5:54pm May 11, 2009 5:54pm
Yes, I totally agree with you. That's exactly what I need to do. Place the orders every week and let them be.

Quoting Ace284
I've been there, trying to force trades into my schedule. I'm sure u've heard the words Money Management before but even the concept of that is difficult when you have a full time job. My advice to you would be to just follow the system, place the orders every week as well as the SL and leave them. Don't let your emotions or someone's analysis force you out of the trade. Good luck to you sir
  • #10
  • May 11, 2009 5:59pm May 11, 2009 5:59pm
Should the orders be placed exactly at the high and low from the first 4hr candle of the week or is there a certain amount of pips above/below where the orders should be placed?

Also, each week, there will be new order levels so I know any unfilled orders from the previous week will have to be cancelled. Lets say for instance the long orders get triggered first, do you cancel the short orders or keep them in play just in case the market heads in the opposite direction before the end of the week?

Also, do you keep triggered orders open over the weekend or do you try and close them before your broker closes on Friday?
  • #11
  • Edited 6:28pm May 11, 2009 6:19pm | Edited 6:28pm
Quoting Siuol
Should the orders be placed exactly at the high and low from the first 4hr candle of the week or is there a certain amount of pips above/below where the orders should be placed?

Also, each week, there will be new order levels so I know any unfilled orders from the previous week will have to be cancelled....
Great Questions.

I generally place the buy order with a buffer of 10 pips + spread.
The Sell is just 10 pips below the box.

If orders have not been triggered by SL or TP by the end of the week please do so manually.

I do keep both Long and Short orders even if one of them has hit the TP

** But take this into account. Since the start of the year GBP/JPY has had a range of 785 pips per week on average. With that said if your TP has hit and the pair has already moved up or down by a large amount of pips AND you know that the TP on the other side will most likely not be hit. Cancel your order. This is something that required some practice but it is very easy once you get use to it.
  • #12
  • May 11, 2009 6:26pm May 11, 2009 6:26pm
Thank for sharing this system. Would you mind posting this weeks chart with the HIgh and Low.
Thanks
Yea it's Life//
  • #13
  • May 11, 2009 6:29pm May 11, 2009 6:29pm
Quoting Ace284
No this isn't a thread about dogs = )
This system is extremely easy to use and looks extremely profitable. I've seen breakout strategies for daily and weekly. I've never seen one like the one im about to present but hey i could be wrong.

DRAW a box connecting the high of the first 4hr candle of the week with the low.

Rules:
- Buy on upper break of weekly box
- Sell on lower break of weekly box

SL - other side of Box
TP1 - 1x box size
TP2 - 2x box size
TP3 - 3x box size

I mainly trade GBP/JPY but this system could adapt to other...
very interesting ace. i am looking fwd to testing it. thanks.

just a couple of questions, do you put a order above and below the square? or do you clasify a break of the square(as your instructions say) when the candle closses past the box. last of all, would there be a indicator out there to draw a box for mt4 platform. cheers

EDIT: oops first question already answered just above. ignore the first question.
  • #14
  • May 11, 2009 6:39pm May 11, 2009 6:39pm
I'm posting an example on this weeks orders trade. I modified my Fibs to show price target levels.

Short:
149.23
SL- 150.07
TP- 147.53 HIT

Long:
150.25
SL - 149.33
TP - 152.09
Attached Image (click to enlarge)
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  • #15
  • May 11, 2009 6:50pm May 11, 2009 6:50pm
[quote=would there be a indicator out there to draw a box for mt4 platform. cheers[/quote]

Unfortunately i dont have the slightest clue with programming indicators.

Anyone know how to make an indicator for this system with a 10 pip buffer?
  • #16
  • May 11, 2009 6:53pm May 11, 2009 6:53pm
Hello and thanks for sharing this system.

My Broker uses a Sunday candle and it appears yours does not?

My question is... should I just dismiss the Sunday candle period and start with 00:00? (which also is the Asian session opening - at least it is on my chart)

Thanks in advance!
  • #17
  • May 11, 2009 6:55pm May 11, 2009 6:55pm
Quoting adsanders
Hello and thanks for sharing this system.

My Broker uses a Sunday candle and it appears yours does not?

My question is... should I just dismiss the Sunday candle period and start with 00:00? (which also is the Asian session opening - at least it is on my chart)

Thanks in advance!
Yes you should start with 00:00 (Asian Open)
  • #18
  • May 11, 2009 7:03pm May 11, 2009 7:03pm
IF TP 1 is triggered do you move the SL to break even?
Yea it's Life//
  • #19
  • May 11, 2009 7:23pm May 11, 2009 7:23pm
Quoting serj1
IF TP 1 is triggered do you move the SL to break even?
haven't tried that but sounds like an idea. I'll test and see how it works
  • #20
  • May 11, 2009 7:29pm May 11, 2009 7:29pm
Hmmm, interesting. If you select the period separator by right clicking on the chart, select the common tab to select it, it will draw a line through the first candle of the week. I manually drew the boxes....

Will look at this some more for a potential set and forget type of trading method...
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