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4H Box Breakout

  • #1,801
  • Aug 13, 2009 9:31pm Aug 13, 2009 9:31pm
Quoting Breadman
a big thanks to ace284 for a great method. i have just one question is everyone only taking a max of 2 trades per week per pair.
I backtested this year and tested it also with a third entry only in the opposite direction. For example: long trade stopped out, short trade stopped out, enter again long. The results were very good. I was using tp3, so it would offset your losses and the week would end up actually being a winner. The downside is three losses in a row, which I think would have happened once this year. The week of 7/20 and 7/27 you could have made some profits back with a third trade. I do not trade it though.
  • #1,802
  • Aug 13, 2009 11:04pm Aug 13, 2009 11:04pm
Quoting FXLab
Not every week is a winner!


GBPJPY: 2 trades

1st lot: +117 pips
2nd lot: 0 pips

1st lot: -117 pips
2nd lot: -117 pips


EURJPY: 2 trades

1st lot: -108 pips
2nd lot: -108 pips

1st lot: +108 pips
2nd lot: 0 pips


AUDJPY: 2 trades

1st lot: +81 pips
2nd lot: 0 pips

1st lot: -81 pips
2nd lot: -81 pips


CHFJPY: 2 trades

1st lot: -80 pips
2nd lot: - 80 pips

1st lot: +80 pips
2nd lot: 0 pips
I understand....I was just curious.
  • #1,803
  • Aug 14, 2009 6:06am Aug 14, 2009 6:06am
Quoting Ace284
Is there a reason why you chose 50 pips? Have you tested it on a lower time frame like 1hr and 30 mins to see whether you'll get taken out at the start. GBP/JPY is quite volatile and can move 50 pips back and forth easily.

I know, I used to demo trade similar strategy and the originator of that thread used 50 pips as original profit taking. It is a safer approach.
I like your idea more. In his case the price should have crossed and closed above/ below 50 EMA and by that time momentum quite often was already not so strong.
I think safety over return and return will be there. Once there is a true momentum it will pick up and go.
This pair is a monster. I trade S/R at another account but not this pair. Your strategy is very good. It is simple idea and I am not going to change anything but trade management to be on safer side.
  • #1,804
  • Edited 8:00am Aug 14, 2009 7:43am | Edited 8:00am
Hi guys

First of all, thankyou to Ace for sharing such a simple yet profitable method.

In the spirit of sharing, I thought I would share what I have been working on for the past couple of days.

I have just started to learn Excel VBA. To give me a structure to learn round, I have tried to backtest Ace's method. I thought I would post my attempt (so far) up here. It might help people to check the system out for themselves, and there are bound to be some Excel ninjas on here who can maybe help me to improve the code. (It's very basic and amateur ATM)

It is the first thing I have EVER written in VBA. While it looks as though it works (results similar to my eyeball test), it isn't very robust. So please follow the layout precisely and read the instructions/limitations on the "Notes" sheet. They include some notes on the logic of how the macro establishes the 4 hour candle which is essential reading - you need to set your data up so that the macro gets the correct 4 hour slot

Anyway - have a play and let me know what you think. As I get time and read more of my VBA book, I will try to add to/refine the code - but as I say, maybe some of you can help to do that as well?

All the best

TF

Note 1 - I have just realised that I can't post a macro Excel sheet. Therefore I have attached one without the Macro, plus the Macro in a txt file. You will have to set a blank macro up in the Excel sheet, then paste in the txt file. I have just tried it, the only error was that the Vlookup function near the start of the macro ends up on two lines - if that happens to you then just bring it back onto 1 line.

Note 2 - The Macro puts numbers in cols C to I of the Results sheet. You can test the macro quickly before uploading your data by clearing the numbers in those columns then running the macro - and seeing if it crashes or if it fills them in again
Attached File(s)
File Type: txt Macro code.txt   5 KB | 427 downloads
File Type: xls EURJPY Backtest - FF.xls   116 KB | 567 downloads
  • #1,805
  • Aug 14, 2009 9:31am Aug 14, 2009 9:31am
Hi Guys,

First of all, thank you Ace for a great system and all for contributing to a great thread. I'm new to FF and just getting started with Forex trading. I've done some manual backtesting for the pass 2 1/2 years from 2007 to now. I've also perform some simple analysis, which I like to contribute to all follow traders.

Here are the summary below:

2009: 5,028 pips so far
2008: 4,135 pips
2007: 4,215 pips

However based on my analysis, if apply some variations to trade managements such as:

 

  1. Move SL to BE + 20 pips once 1X TP is reached;
  2. Move SL to 1X when price reach 2X;
  3. Move SL to 3X when price reach 4x and let profit run to week end

These change the results as follows:

2009: 6,729 pips so far
2008: 8,006 pips
2007: 7,737 pips

Attached is an excel spreasheet of my detail backtesting, also include variations of the strategy such as re-entry. I think the trade management changes can only managed by an EA or script as it will take too much effort to sit in front of the PC all day long, any suggestions?






Attached File(s)
File Type: xls ACE 4Hr Breakout Strategy.xls   397 KB | 814 downloads
  • #1,806
  • Aug 14, 2009 10:22am Aug 14, 2009 10:22am
Great work!
  • #1,807
  • Aug 14, 2009 10:26am Aug 14, 2009 10:26am
Quoting bobha
To Nubchai. I crossed off the whole week.

Thanks Bobha.
  • #1,808
  • Aug 14, 2009 10:36am Aug 14, 2009 10:36am
Thanks for the work danno. I've been doing exactly as you suggested (trailing price by 1TP) over the last 3 weeks and it's been working great so far.


Quoting danno96
Hi Guys,

First of all, thank you Ace for a great system and all for contributing to a great thread. I'm new to FF and just getting started with Forex trading. I've done some manual backtesting for the pass 2 1/2 years from 2007 to now. I've also perform some simple analysis, which I like to contribute to all follow traders.

Here are the summary below:

2009: 5,028 pips so far
2008: 4,135 pips
2007: 4,215 pips

However based on my analysis, if apply some variations to trade managements such as:
[list=1][*]Move SL to BE + 20...
Greetings from Guanajuato, Mexico
  • #1,809
  • Aug 14, 2009 10:41am Aug 14, 2009 10:41am
danno96, many thanks to you for your work
  • #1,810
  • Aug 14, 2009 11:24am Aug 14, 2009 11:24am
Quoting danno96
Hi Guys,

First of all, thank you Ace for a great system and all for contributing to a great thread. I'm new to FF and just getting started with Forex trading. I've done some manual backtesting for the pass 2 1/2 years from 2007 to now. I've also perform some simple analysis, which I like to contribute to all follow traders.

Here are the summary below:

2009: 5,028 pips so far
2008: 4,135 pips
2007: 4,215 pips

However based on my analysis, if apply some variations to trade managements such as:
[list=1][*]Move...
Is there any way you could run a test where you let the trade run for the whole week and close it on friday? It would BE at the entry price.

Thanks a lot and I appreciate your hard work.
  • #1,811
  • Aug 14, 2009 11:52am Aug 14, 2009 11:52am
Quoting decus
I'll attach some I just did for my system. It uses the same basic idea as Ace's (Sunday 4hr break out), but I take profit based off the ATR (similar to Phils's babypips thread).

Anyway, attached at bt results for both 08 and 09, with and without trading weeks where there were "High Impact" FOMC events (as per the FF calendar).

Of course, you can take the actual profits with a grain of salt compared to Ace's, but by the looks of it not trading those weeks may help.
Excellent and thank you.

I am a retired person and would like to do some testing and produce the kind of report you have done. I need help. How do I do? If you can give me links to the site/software/manual or book it will be very helpful.

Thank you again responding to my earlier request.
  • #1,812
  • Aug 14, 2009 12:20pm Aug 14, 2009 12:20pm
Quoting pj9100
Excellent and thank you.

I am a retired person and would like to do some testing and produce the kind of report you have done. I need help. How do I do? If you can give me links to the site/software/manual or book it will be very helpful.

Thank you again responding to my earlier request.
Here you can learn the basics: http://www.easyexpertforex.com/backt...imization.html
  • #1,813
  • Aug 14, 2009 1:35pm Aug 14, 2009 1:35pm
Your backtesting is quite encouraging Donno... Although an EA would be great, I think your 1TP trailing stop can be set manually. The only issue is that that either all stages will trail by 1TP + 20 pips or all Trailing Stops be 1 TP. Of course, you can also change the settings after the Break even threshold is met.

Walt

Quoting danno96
Hi Guys,

First of all, thank you Ace for a great system and all for contributing to a great thread. I'm new to FF and just getting started with Forex trading. I've done some manual backtesting for the pass 2 1/2 years from 2007 to now. I've also perform some simple analysis, which I like to contribute to all follow traders.

Here are the summary below:

2009: 5,028 pips so far
2008: 4,135 pips
2007: 4,215 pips

However based on my analysis, if apply some variations to trade managements such as:
[list=1][*]Move SL to BE + 20...
  • #1,814
  • Aug 14, 2009 4:16pm Aug 14, 2009 4:16pm
Quoting danno96
Hi Guys,

First of all, thank you Ace for a great system and all for contributing to a great thread. I'm new to FF and just getting started with Forex trading. I've done some manual backtesting for the pass 2 1/2 years from 2007 to now. I've also perform some simple analysis, which I like to contribute to all follow traders.

Here are the summary below:

2009: 5,028 pips so far
2008: 4,135 pips
2007: 4,215 pips

However based on my analysis, if apply some variations to trade managements such as:
[list=1][*]Move SL to BE + 20...
That is great work danno, thanks for sharing with us all. Any chance you could run this report for the other pairs that this system suggests(AUDJPY,EURJPY ,CHFJPY etc).
  • #1,815
  • Aug 14, 2009 6:01pm Aug 14, 2009 6:01pm
Quoting jones247
Your backtesting is quite encouraging Donno... Although an EA would be great, I think your 1TP trailing stop can be set manually. The only issue is that that either all stages will trail by 1TP + 20 pips or all Trailing Stops be 1 TP. Of course, you can also change the settings after the Break even threshold is met.

Walt
An EA would be great especially with the trailing, In my backtesting I only apply to 1X to BE +20pips, 2X to 1X, no trailing for 3X as I want to give room to hit my 4X TP and 4X to 3X to let the profit run (you will notice this will alway capture the big run as shown in my detail testing and is the main difference for the variation in results, ie the 16X TP on 20/10/08 week with 2498 pips).

I also other variations I forgot from my origin post. These are 1) do bot trade when range is > than 200, SL will be risking more than 2% and 2) do not open new trade within the last 3 candle for the week but allow existing trade to run to last candle of the week.

I've start to do some work on EURJPY but the results were better on the GBPJPY. Just on the look on the charts of other pairs such as AUDJPY, CHFJPY, etc, GBPJPY sems to perform better as it breakout and trend more.

My plan is backtest this strategy on the GBPJPY historally cross differ market dynamics, any suggestion on which year (2001, 2003, etc)?

  • #1,816
  • Edited 8:33pm Aug 14, 2009 7:11pm | Edited 8:33pm
Quoting danno96
Hi Guys,

However based on my analysis, if apply some variations to trade managements such as:

 

  1. Move SL to BE + 20 pips once 1X TP is reached;
  2. Move SL to 1X when price reach 2X;
  3. Move SL to 3X when price reach 4x and let profit run to week end

These change the results as follows:

2009: 6,729 pips so far
2008: 8,006 pips
2007: 7,737 pips

Hi danno96,

Great job on the backtesting and variations!

A couple of questions, please:

1) Do your variations include moving the SL to 2X when price reaches 3X?

2) If you simply put a Trailing Stop equal to 1X (after the price actually reaches 1X), wouldn't that be more or less a simpler "set and forget" approach that would eliminate the need to monitor the screen the remainder of the week? Obviously this would reduce the amount of breathing room for the trade. Would the profits be severely compromised by this approach?

Ace: What is your take on this approach?

Many thanks!
Bob
  • #1,817
  • Aug 15, 2009 6:17am Aug 15, 2009 6:17am
I love this system, thank ACE28 and other contributors!

I know the breakout box is based on G/Y's first 4h candle of the week, which can be less than 50 pips or greater than 150 pips on any given week. Based on fibs for targets, this means some weeks that TP4 can be as little as 350 pips and other weeks it can be greater than 650 pips.

Why not calculate an "average box size" and calculate targets based on ATR so that the risk/reward dynamics are fairly consistent each week.

Does this make sense or is my logic terribly flawed? (I know that the box is straddled for pending orders so the first 4h candle of the week does not provide direction under this trading method but could its size be a precursor for the coming week's volatility?)

Great days just ahead,
Jon
  • #1,818
  • Aug 15, 2009 8:15am Aug 15, 2009 8:15am
I use this trade manager to manage my weekly trade http://www.forexfactory.com/showthre...t=89371&page=1 There are others out there.

I use this tool to set my initial SL to BE + 10 after I hit TP1. I set the pips to my TP level. I like Jumping Stops but this tool has regular TS, instant TS etc After TP1 it will jump the SL up by each TP level. So at TP1 it jumps to BE + 10 (my settings). At TP2 it jumps to TP1 etc.

Sandy
  • #1,819
  • Aug 15, 2009 10:14am Aug 15, 2009 10:14am
Quoting danno96
Hi Guys,

Attached is an excel spreasheet of my detail backtesting, also include variations of the strategy such as re-entry. I think the trade management changes can only managed by an EA or script as it will take too much effort to sit in front of the PC all day long, any suggestions?



Very great post Danno, thanks a lot for sharing. I have a question, into your variation, Can you explain more about rules number 10 of your variation?

Hurry up before this thread get shut down for breaking pips limit...
Harmonics and Pitchfork using korHarmonics from TradingArsenal
  • #1,820
  • Aug 15, 2009 10:21am Aug 15, 2009 10:21am
i guess maybe u guys may give some suggestion on how to take ur profit or put stop loss to b.e or maybe some useful strategy but i guess ace will use his standard strategy.. its up to individual how to take profit.. great ideas guys.. by the way,how do we use the atr to take profit or stop loss?
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