4H Box Breakout

Just add x number of pips to the high and low of the bar you're trading on

Question, does anyone set up their TP @ the x2.5 marker instead of the x3? I wonder if this is more successful then x3. This week it would have taken profit already.

Patience is key

I've tested this pair (EUR/JPY) and 3x is the best target.

hehe..yep..this week it hit 3x target..very cool..i've done backtest too on this pair..but it was using 2x tp (as i stated in my excel some posts earlier).. i'd like to backtest it too using 3x tp starting from jun 08..but it's just so hurting to manually backtest it..wish there's somebody coding an EA and doing backtest for EJ with 3x tp starting from Jan 08 till now...

Happy pipping ace..let's hope GJ hit its target...seems like it's having hard time breaking 160 level....

Wow, what can I say, this is a great system. Ace284 - Thank you so much for this wonderful idea. I took the time to read this thread from the bigining to the end, so I don't have to ask questions already answered. Also, I backtested this system manually on the GBPJPY pair, it's fantastistic. With so much work done and so much proof, I'm going to start trading this system on my live account.

Thanks again for all the great contributors to this thread, especially some people I respect so much that I found on this thread - Ronald Raygun, Swingman and others.

Thought I'd write a little piece on Risk, drawdowns, and profit expectations.

I risk on average 2.5% of my account on every trade, on GBP/JPY. I encourage everyone to find their own risk tolerance level before they start risking lots of money. Yes, this system has a proven, profitable track record for the past year. But keep in mind that the future cannot be predicted with absolute certainty.

So how do you know what your risk tolerance level is?
Well, place a trade with a certain risk level (below 5%). And just walk away from your computer screen. If you can stay away for at least 2 days, then your fine. And just relax, and go about your life because the stops are there for a reason. This might sound completely foreign and ridiculous for some of you, but if you plan on trading this sort of method, learn to do it. Its pretty fun eh? Your job is to do less, and you'll make more. You gotta get that 'day trader' deal out of your head for this.

Here's my scenario (when I talk in percent, I refer to my account growth)

GBP/JPY - Risk 2.5% on each trade
- Reward +10% on each trade (with 4x TP)

EUR/JPY - Risk 1.5% on each trade
- Reward +4.5% on each trade (with 3x TP)

Now, here's something important to realize. You will lose more trades than you will win. The winning success of this system for GBP/JPY is 40%-45%. For me its been 42.5%. I hope thats clear to everyone. That means you lose, 55% - 60% of the time. This is also from the start of this year.

If you test the system, you will clearly see this, which means that using 1x TP or even 2x on GBP/JPY, will leave you in losses or in small profits.

A trader on FF asked me about using these TP's and I said I do now recommend it. He responded by stating, "So where's the logic in putting those TP levels on the first post" He also stated that I was purposely trying to make people lose money. I'm not going to name the trader, you know you are. I just can't believe the nerve of that trader. If you're going to trade a system based on the first post, then you will fail. Also to that trader, im not here to feed you with a golden spoon, im not your mother. I placed those TP levels in the first post to see whether people will test a few different methods using those, maybe changing up the SL levels or some sort of proven, backtested method. Alright sorry guys, that was just eating me inside. Back to the main points.

Worst Absolute case scenario. Every single trade fails in the future.

So how many months will it take to blow up your entire account. Or at least leave it with $1.

So here are the calculations:
n = months
$10 000 account
13.6 trades per month.
6.8 on GBP/JPY
6.8 on EUR/JPY

Total risk = 2.5% for GBP/JPY and 1.5% for EUR/JPY

1 = 10 000(0.728)^n
n= 29

Alright, so in this case a trader with $10 000, using the risk I use, has 29 months to reduce his account to $1.

Average case Scenario

Here are the calculations:

A = accumulated amount
$10 000 account
13.6 trades per month.
6.8 on GBP/JPY
6.8 on EUR/JPY
GBP/JPY average/trade = +106(we'll use 100 for simplicity)= +2.5% growth
EUR/JPY average/trade = +75 = 1.1% growth
Growth for GBP/JPY per month = 15.4% - we'll drop it to 10% to be safer
Growth for EUR/JPY per month = 6.5% - we'll drop it to 5% to be safer


A = 10 000(1.15)^12
A = $53 502.5

So for the same person with $10 000, if the market continues at its pace they should have $53 502.5 in a year. I dropped the percent growth significantly to take into account sideways markets. This is compound growth, which means you change position sizes every month, but still keep the same risk and reward in %. The next year it will be $286 251.76. This is in US dollars so convert to match your own currency. Now keep in mind, this is not guarenteed. If you see an error in my numbers, comment,.
It's all about Compounding gains. You'll see a handsome increase in profits. just one of the many advantages on Money Management. The formula for it is below. Its not difficult to learn compounding so I strongly suggest everyone, who wants to be profitable learn it. Its grade 11 math, and trust me I know, I was there a couple of months ago. I guess they probably have this on excel, but again it would require some digging around.

Formula:A = P( 1 + i )n


A is the final amount including the principal.
P is the principal amount.
i is the rate of interest per year.
n is the number of years/months/weeks invested.


Well thats it for now, hope you get some insight on projecting, planning and on the strategy.

Ace or anyone,

I know I don't like asking questions that have been asked already. I have searched the thread and I seem not to find the thread that has the settings for the fib levels that Ace uses. Could anyone please point me to the right thread? I know I have seen it somewhere on here. I can't just seem to locate it now. I just need to see how Ace sets up his fib levels that I displayed on his charts.

I appreciate it. Hope tonight is the night that the G/J finally gets above 160.00 and stays up there. Volume is going to shrink after tomorrow b/c of the 4th of July holiday.

Thanks

Wait huh? I thought the first page of this whole thread is the the original "awesome" system lol??? no?? We will fail if we use it?
Or did you mean this is what the other mean trader said about your system?

What I mean is that when you discover a new system, its not enough to read one post. It takes a lot more because that one post generally will not have enough information for someone to be successful. Throughout the thread explanations are given as to why TP 1 is not profitable and why TP2 will not make as much as TP 3 and TP 4. Also things like the fib modification I've shown, that will show the targets...Things like that.

Go to 'search this thread' which is located near the attachments for the thread. Search 'fib'. It will be there, I know because I just checked.
Going through a thread can be boring a time consuming, so just try and think of a key word or statement that was in the post that you are looking for.

Excellent post, Ace .

GJ is stopped out for those placing the SL at BEP. Still a very positive week this week.. See you again next monday...

Happy pipping anyone...

hate giving back profit. stopped out at BE. Need to do exhaustive back test to see how many times profit given back. Next week I will take 2 positions, close one at 100 pips, let other go to 4x.

No matter the amount of backtesting or stressing you will do, it is part of trading at times handing back some in the quest for greater rewards.

You in the above case took no loss, thats a great thing. Backtesting to find your answer will lead you to looking for ways to get something that hasnt happened yet and in turn will lead you to straying for the method.

All methods have there pros and cons, this method aims for something alittle higher and when you get there you are better off. The trade off may be from time to time taking some hits or watching some pips turn to nothing. If your that worried then just trade for 1:1, or do as I do with my methods, aim for 1:1 but lock in your profit after it has surpassed it. In this case if the markets gets you to your 2x or 3x (perhaps greater) target then you are laughing. If it comes back then you have your 1:1 and essentially if you move to BE with your SL then you have made pips.

In this case you will at times get the best of both worlds.

When trading a system you need to understand that there are inherent risks involved. Trying to cushion the risks means you are not trading the system but allow your emotions to get the better of you. Learn to take and accept and your trading will become more fluent.

take care

This is still the best RR system I have seen in a long time.

Yes it is hard to give back profit, but you have to look long term.

I follow a lot of teachers on FF and a lot of them had a hard week, but they all will be back tomorrow or next week. They don't beat themselves.

I took profits early this week because I don't like NFP.

Yesterday and today I did not trade because the market does not know where it wants to go.

Be patient, learn from the Masters on FF; but most important is to learn to know yourself and the pips will follow you.

Amazing breakout strategy. Have anyone tried it on a daily bases?

Ace,

Are you familiar with the new NFA ruling for American brokers that will prohibit the utilization of limit orders and stop losses beginning in August of this year?

This new NFA ruling is also discussed here at FF:

http://www.forexfactory.com/showthread.php?t=180154

Maybe we need to find a foreign broker for US residents? Apparently, FXCM is recommending US accounts be transfered to their UK division.

Not sure where this stinking legislation is leading us...

Bob

Simple solution would be opening two accounts......

FUCK

Just get a straddle EA to do it. Geez