4H Box Breakout | Page 49 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Box Breakout indicator 197 replies

Breakout EA based on New York Box 3 replies

4H Weekly Box Breakout [TD] 4 replies

EURUSD Box Breakout 6 replies

Breakout Box 5 replies

Attachments: 4H Box Breakout
Exit Attachments

4H Box Breakout

  • #961
  • Jul 16, 2009 11:44am Jul 16, 2009 11:44am
Quoting 11andy11
Droland, I am confused about how your system would have traded the long entry this week. If your entry was 150.87 and you move stop to BE after 50 pips profit how did your method trade the three retraces that came back down to entry price? Did you make three trades long two stopped out at BE and the last one took you into profits??
Yes. That is exactly what I did. I missed on two of them as I wasn't a the computer so I went in late but I did catch the big run eventually.
  • #962
  • Jul 16, 2009 11:47am Jul 16, 2009 11:47am
Quoting Bobcat2
Hi Dave,

Sorry but I am a bit confused regarding the 100 pip SL. Did I miss something? I thought the SL was always 50 pips on new reentries.

Thanks,
Bob
Hi Bob. Right now I am trying to pinpoint the best numbers. There is no fixed SL level yet. Backtesting an EA will undoubtedly help.

I am in a bit of a trial and error period but overall the system is working wonders.

I am out of the market right now with some nice profits. Its Thursday and I am content with 500 or so pips for the week and will start again on Sunday.

Dave R.
  • #963
  • Jul 16, 2009 12:18pm Jul 16, 2009 12:18pm
Great work Dave. It'd be nice to have your adjustments of the system explained a bit clearer;

So far I've noted down this:

1. When 50 pips up move SL to BE
2. Add 75 pip trailing stop
3. When price hit stop, place pending order in opposite direction to initial order
  • #964
  • Jul 16, 2009 12:39pm Jul 16, 2009 12:39pm
Quoting jahual89
Great work Dave. It'd be nice to have your adjustments of the system explained a bit clearer;

So far I've noted down this:

1. When +50 pips up move SL to BE
2. Add 75 pip trailing stop
3. When price hit stop, place pending order in opposite direction to initial order
No fixed rules yet. As I mentioned earlier, I need to trial and error the actual settings to get the best SL settings etc.

That being said, here is my fundamental concept. I want to maximize my risk/reward ratio. How do I do this.

My first goal is to get myself into a break even position as early as reasonably possible. So maybe 50 pips movement into the trade is a good number to move to BE. Maybe it should be 75 pips. This also may change depending on the current volatility in the market.

Next is the trailing stop loss. I have used 75 all the way up to 150 pips. Again, not sure what the correct number is but with an EA, can do some backtesting to fine tune this number.

Your point three in not correct. I place a Pending order IN THE SAME DIRECTION as the original order. Using Ace's original concept, the breakout of the box on Sunday is the primary movement indicator. I want to stay with that concept. For example, the first breakout is say a LONG entry. It moves 50 (maybe 75 pips) up and I move my SL to BE. I have say a 100 pip SL. Market price continues up for 200 pips and then reverses. It comes down 100 pips and my SL takes me out with a locked in 100 pip profit. It continues down 50 more pips. I place a new Pending LONG order at the price my last SL took be out. It is a LONG pending order because I assume that the original breakout LONG is still the prevailing strength. If it goes back up, I am back in the LONG entry and continue to profit. If the Market Price continues to weaken, I have locked in a 100 pip profit and I wait for the SHORT pending order to hit.

I am toying with the idea that if the original breakout does go say a minimum of 200 pips, I may consider moving my pending SHORT entry from the lower boundary of the box to maybe the midpoint of the box.

Dave R.
  • #965
  • Edited 12:54pm Jul 16, 2009 12:50pm | Edited 12:54pm
When price hits TP1 move SL to BE

When price hits TP2 move SL to TP1

When price hits TP3 move SL to TP2

When price hits TP4 move SL to TP3


Like this you can go onto TP6 or TP7 as it can go as that far and at the same time holding on to your TP's.

This method will allow us to protect profits by moving stops so that they would be the same size of our initial box. This seems more of a methodological approach although would need backtesting.
  • #966
  • Jul 16, 2009 1:20pm Jul 16, 2009 1:20pm
Jahual89, thats not gonna work. Price does not always move up in a smooth stair step fashion. Plenty of times price moves up to tp1.5 retraces all the way back into the box before moving to say tp3.
  • #967
  • Jul 16, 2009 1:33pm Jul 16, 2009 1:33pm
Quoting 11andy11
Jahual89, thats not gonna work. Price does not always move up in a smooth stair step fashion. Plenty of times price moves up to tp1.5 retraces all the way back into the box before moving to say tp3.
I think it should be backtested. You could also say that plenty of times price moves to tp1.5 and when it goes way back in the box it heads for a loss.
  • #968
  • Jul 16, 2009 2:38pm Jul 16, 2009 2:38pm
ATR for the week was around 700. Added to the bottom get 153.90, So, perhaps trading a reversal tgt could be low/high plus ATR. Would have worked great this week. Need back testing though.
  • #969
  • Jul 16, 2009 3:08pm Jul 16, 2009 3:08pm
Following with interest.

Has there been a sound indicator developed
for your system Ace?

RRR
  • #970
  • Jul 16, 2009 4:02pm Jul 16, 2009 4:02pm
Quoting mik1974
I think your system simply and easy to use. dont need to thinking abut some changes just becouse one or two weeks in the quartal. the system is very proffitable and it takes maybe 15min per week. with the droland system will earn maybe more money, but you need EA or to be by computer all the time and I dont like this . sorry for mz english, not perfect, hope you understand
Your right, the original system in no way is broken. The amount of time it takes vs the rewards is very worth it and extremely simple. Especially, if one has other commitments and jobs during the day.

We're just opening some options for the system. I'm usually skeptical about trailing stops and tampering around with your trades, especially with this 4H system. But Dave, seems to be on to something interesting.
We're still going to test, see what trailing stop to use, and hopefully get an EA in here.
  • #971
  • Jul 16, 2009 4:07pm Jul 16, 2009 4:07pm
I have yet to read the full thread but this system is similar to a system that I have used for a while now, My system is also a 4 hr weekly breakout system but with a few different rules. I have contemplated starting a thread , but get discouraged when i read threads and notice how some people just aren't nice, anyway i won't take away from this thread with giving you my rules but I will share a few observations i had that maybe helpfull. I know people hate indicators but sometimes ignoring them isn't helpful. so i would suggest placing the following:

21 ema
200 sma
50 ema
89 ema

Then go back and notice the reactions of price on them. In other words if a breakout to the up side means hitting the 200 sma before you can take you're first TP then is it really a good idea?

I also found that if the first 4 hr bar is a bear or a bull then there is higher than a 60% probability that you will get to your first tp if you go in that direction.

These are just suggestions and if they have been covered my apologies, the bull bear candle was a visual observation and i went back to 2003 on the GBP/JPY, i'm not a programmer so i didn't test it, i'm sure that someone can whip up an ea to check for sure.

I hope some of this helps.
  • #972
  • Jul 16, 2009 4:47pm Jul 16, 2009 4:47pm
Quoting droland
No fixed rules yet.
Dave R.
Hi Dave,

No fixed rules, yet? Hmmm...with 500 pips profit for this week, I think I can at least consider your current parameters as
"semi"-permanent!

LOL

Thanks for showing the way,
Bob
  • #973
  • Jul 16, 2009 6:44pm Jul 16, 2009 6:44pm
Hi,

I am new here. I found this system/ technic last 2 weeks and I have try is out on last Monday, it seem working, I took 200 pips in one day. Anyone of you trade in live accoung?
  • #974
  • Jul 16, 2009 8:44pm Jul 16, 2009 8:44pm
Could someone explain to me how you use the ATR to set you stop loss, I would greatly appreciate it.

Thanks,

RickyD
  • #975
  • Jul 16, 2009 8:52pm Jul 16, 2009 8:52pm
Hi pipsinfo,

We really can't tell whether a system is working or not by just looking at several trades. A working system must sustain it's profitability for a long period of time (3 years, 5 years, or even 10 years) through different market situations. Otherwise, even it gives you profit right now, it may, to some point in time, wipe out your account when it goes through a non-favourable market condition.

For this breakout system, it definitely is working in these 2 years with the volatile market condition. But my backtest told me that it worked badly from mid 2004 to end of 2006 (2.5 years!!!), which gave me severe drawdown even if I was risking 3% per trade. It sucked away over half of the account balance during the period, which, if I was trading life, would definitely scare me away before I found it working again in 2007.

I attached 2 charts of one set of my backtest parameter. One is from 2003 to 2007, another is 2003 to this week. I hope somebody could really work out a filtering machenism to avoid the severe drawdown to make this system a real perfect system.



Quoting pips info
Hi,

I am new here. I found this system/ technic last 2 weeks and I have try is out on last Monday, it seem working, I took 200 pips in one day. Anyone of you trade in live accoung?
Attached Images
  • #976
  • Jul 16, 2009 9:08pm Jul 16, 2009 9:08pm
Quoting dannywmk

I hope somebody could really work out a filtering machenism to avoid the severe drawdown to make this system a real perfect system.
Is there a such thing as a perfect system? The market is a living breathing animal and it is always changing. I think Ronald Raygun put it best when he said he had different strategies for different market conditions.

W.
  • #977
  • Jul 16, 2009 9:32pm Jul 16, 2009 9:32pm
Thanks for your comment.

Well, a perfect system to me is a system which tells me to jump in when there is chance, and tell me to stay away for as long as the condition is poor, and in the long run gives a rising equity curve and reasonable / tolerable drawdown, but not something which claims to give profit every week (yes there is no such system that guarantee a profit every day / week / month).



Quoting wrenski
Is there a such thing as a perfect system? The market is a living breathing animal and it is always changing. I think Ronald Raygun put it best when he said he had different strategies for different market conditions.

W.
  • #978
  • Jul 16, 2009 10:01pm Jul 16, 2009 10:01pm
I have been watching some EA's and this is what I have been trying to put in writing to ask for the programmers to make the EA do. I bet one of the 4h Box Breakout EA's can be programmed just like this.

Gator

Quoting jahual89
When price hits TP1 move SL to BE

When price hits TP2 move SL to TP1

When price hits TP3 move SL to TP2

When price hits TP4 move SL to TP3


Like this you can go onto TP6 or TP7 as it can go as that far and at the same time holding on to your TP's.

This method will allow us to protect profits by moving stops so that they would be the same size of our initial box. This seems more of a methodological approach although would need backtesting.
Gator - Trader Learning and Earning
  • #979
  • Jul 17, 2009 1:02am Jul 17, 2009 1:02am
Hi dannywmk,

Thanks for the useful info. Btw, the strategy is working at this moment right. So, we should take the change and make pips from it... And I believe there alot of changes out there which we never know, what we should is do the right thing at the right time.


Quoting dannywmk
Hi pipsinfo,

We really can't tell whether a system is working or not by just looking at several trades. A working system must sustain it's profitability for a long period of time (3 years, 5 years, or even 10 years) through different market situations. Otherwise, even it gives you profit right now, it may, to some point in time, wipe out your account when it goes through a non-favourable market condition.

For this breakout system, it definitely is working in these 2 years with the volatile market condition. But my backtest told me that it worked...
  • #980
  • Jul 17, 2009 3:31am Jul 17, 2009 3:31am
Hello, this is my first post in this thread. First of all, thank you Ace284 for this nice system.


dannywmk, your backtest results are impresive. You say that "I was risking 3% per trade" , but this system works with diferent profit targets, so, can you clarify how backtest is made? ( for example, 3 targets, 1% every trade-target). In this thread there is some modificacions of original rules, can you clarify with rules you apply with backtest?

Then I have a suggestion, maybe you can aboid that drawdown if you trade at the same time various pairs, for example, if you trade gbpjpy you can trade eurusd (not another jpy pair), because in a long time gbpjpy had various lateral periods, for example 1986-1989; 1993-1995; etc. Periods with are incompatible with this system. Instead, 1993-1995 were treding years for eurusd.

PS. sorry for my basic english.
1 trader viewing now