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4H Box Breakout

  • #2,121
  • Aug 20, 2009 6:50am Aug 20, 2009 6:50am
Quoting shiko
Yes, I meant G/J, I have not tested E/J yet.
But with only 1 trade won this way, it still does not worth it if it has no higher probability.
OK.

I'm not sure it was only 1 time with EUR/JPY . . . it's just that I remembered it happened recently.
Greetings from Guanajuato, Mexico
  • #2,122
  • Aug 20, 2009 6:51am Aug 20, 2009 6:51am
Quoting yen44x
I posted exactly what I'm doing in post #2106.

If it's not clear, let me know.

Ok, You are opening 2 positions for each pair. 1 position for each pair goal is TP1, as soon as it reaches this goal it is closed. Then you move stop loss for the left positions B/E +20 pips and let them run further and move stop loss after they reach TP2, TP3.
am I right?
  • #2,123
  • Aug 20, 2009 7:01am Aug 20, 2009 7:01am
Guys, I have a proposal...
As we understand there is a lot of options and it would take a lot of time for each one of us separately to back test it. So, i have some proposal so that we can find the optimal statistically sound rules for this system.
We propose all possible options and than share the effort Each one will do 1 research back testing and then offer it for all to read. Thus in short time we will have the optimal parameters for this system.
It can be taking or not taking partial profits, different pips counts for moving stop loss to B/E and so forth. It is all about probabilities.

What do you think?
  • #2,124
  • Aug 20, 2009 7:02am Aug 20, 2009 7:02am
Quoting shiko
You know, I have checked data week by week since January 1, 2009. There was not a single week when if you lost first trade you then won second trade.
It looks to me this system is a one shot pony. If the first trade lost, no trading till next week. It was really unexpected result. It means that probability of win after loss is so small , at least for these 8 months it is 0, that it doe snot worst to open second trade after first loss. which means, once long/ short triggered another limit order canceled. Results would be far better. I have been...
Shiko . . . take a look at GBP/JPY the week of July 13. The initial trade went Short and hit TP1, which means it was a BE trade under current rules, but a loss if you were trading by Ace's original rules still in effect at the time. Then, the Long trade went to TP3, which is a winner in my book.

Maybe I don't understand what you're referring to (I haven't had my morning coffee yet ). If that's the case, then feel free to clarify. Thanks.
Greetings from Guanajuato, Mexico
  • #2,125
  • Aug 20, 2009 7:02am Aug 20, 2009 7:02am
Quoting shiko
Ok, You are opening 2 positions for each pair. 1 position for each pair goal is TP1, as soon as it reaches this goal it is closed. Then you move stop loss for the left positions B/E +20 pips and let them run further and move stop loss after they reach TP2, TP3.
am I right?
That's it my friend.
Greetings from Guanajuato, Mexico
  • #2,126
  • Aug 20, 2009 7:07am Aug 20, 2009 7:07am
The week of June 8 is another example with GBP/JPY. The first trade went Short and hit only TP1 (a losing trade at the time) and then the second trade (Long) went all the way to TP4.

Again, maybe I don't understand the point of your backtesting, but in just a quick look back a couple of months, there was plenty of profits to be found in a second trade.
Greetings from Guanajuato, Mexico
  • #2,127
  • Aug 20, 2009 7:08am Aug 20, 2009 7:08am
One Long and one short in a week and that's it. There is no point to try to catch the devil by the tail within such a range market. This method is done for the week since tuesday, wait till Sunday.That's it.
Harmonics and Pitchfork using korHarmonics from TradingArsenal
  • #2,128
  • Aug 20, 2009 7:09am Aug 20, 2009 7:09am
Quoting GreatYves
One Long and one short in a week and that's it. There is no point to try to catch the devil by the tail within such a range market. This method is done for the week since tuesday, wait till Sunday.That's it.
I'm not questioning that . . . I agree with you. I'm asking about Shiko's contention that the second trade is ALWAYS a loser if the first trade was a loser (at least in 2009).
Greetings from Guanajuato, Mexico
  • #2,129
  • Aug 20, 2009 7:13am Aug 20, 2009 7:13am
Quoting yen44x
That's it my friend.
There is a lot of merit to Yen's approach. If you close one lot at TP1 you have locked in profits rather than just guaranteeing no loss on the trade. Then set second lot to BE+20 or+10 whatever you want. Even the second lot is in profit.

Sandy
  • #2,130
  • Aug 20, 2009 7:13am Aug 20, 2009 7:13am
Quoting yen44x
The week of June 8 is another example with GBP/JPY. The first trade went Short and hit only TP1 (a losing trade at the time) and then the second trade (Long) went all the way to TP4.

Again, maybe I don't understand the point of your backtesting, but in just a quick look back a couple of months, there was plenty of profits to be found in a second trade.


I followed original rules. Now I am testing with move stop loss to BE after 50/80 pips in profit.
  • #2,131
  • Aug 20, 2009 7:16am Aug 20, 2009 7:16am
Quoting shiko
I followed original rules. Now I am testing with move stop loss to BE after 50/80 pips in profit.
If that's the case, then I think your backtesting was flawed based on the two examples I gave you. I'm not trying to argue with you, but if your statement goes unchallenged any newbie reading the thread for the first time is going to think a second trade is a guaranteed loser. That's simply not the case.
Greetings from Guanajuato, Mexico
  • #2,132
  • Aug 20, 2009 7:24am Aug 20, 2009 7:24am
Quoting cinex
One very basic question
As I read about rules of this system I understood that when you use 4 take profit levels you have to open 0.4 lot at least and with every TP level hit you close 1/4 of your trade. That means also when price is breaking BE, not reaching TP1 and then is going down you have 4 x SL.
So in every trade you risk the same amount you can win : 4 x box size
So the risk / reward ratio is the same.
And that system only takes advantage of the fact that when BE is broken there is higher probability that the price will go up/down
Is...
No that's not how Ace's strategy works. The idea is to optimally target TP4 for GJ and close your entire position when you hit TP4. You don't partially close your position at each TP level using his strategy. So assuming you hit TP 4 but your SL is roughly 1x box size your R:R is 1:4.

Sandy
  • #2,133
  • Aug 20, 2009 7:35am Aug 20, 2009 7:35am
Quoting yen44x
If that's the case, then I think your backtesting was flawed based on the two examples I gave you. I'm not trying to argue with you, but if your statement goes unchallenged any newbie reading the thread for the first time is going to think a second trade is a guaranteed loser. That's simply not the case.

I can be wrong of course but the trend is here, probability of a winner after loser is higher than of a winner. Could you give me the dates whgen second trade was a winner according to your observation?
  • #2,134
  • Aug 20, 2009 7:45am Aug 20, 2009 7:45am
I have not commented on the forum for a while, but have been reading and trading. I was trading this system each day, in other words, a new 4h box each day but only trading in the direction of the trend as determined by a 30 period ema. (slope down, trade down and visa versa)
I think aces original system is sound and very profitable, but may not suit everyones trading tolerance, hence the variations.
What I have discovered over the last 4 weeks is that the first two days of the week for me seem the most profitable. I also look at the gu and eu deciding what to trade. I move sl to BE after hitting TP1 or if a major RL or SL is evident close to TP1.
Trading rules are a must but rules also are for the blind following of fools and the guidance of wise men, so if taking slightly less than 1:1 or 2:1 because of a SL/RL, then so be it.
My record this month is 5 winning trades and a couple of BEs, no losers. Some hit TP1 then closed out the rest at BE.
The bottom line is that the breakout of the 4h box is a very valid method, but you can be discretionary in which trades you take. If I have the choice of taking eu with a box size of 80 pips as opposed to gj with 130 pips, the eu wins every time. why? Because it is less stressful waiting for the market to move 80 and 160 pips as opposed to 130 and 260. It will probably take less time, so I am not exposed to the market for as long.
What I am trying to say is embrace the system, while also trading in your tolerance zone. Rules are good, but need to be slightly flexible. eg. To cross the road, look both ways, look again and move quickly but carefully to the other side. Or maybe even better, look both ways then go 100 metres up the road away from the bend where there is an island in the middle and visibility is better. just putting the odds a little more in my favour.
Sorry for the long winded post, but instead of constantly discussing how rigid the rules should be, maybe we should post our trades with pictures and a small explanation of our variations. If people object strongly to me or others varying the rules, I accept that and can start a new thread if that is the general view.

Regards,

Anthony
  • #2,135
  • Aug 20, 2009 8:12am Aug 20, 2009 8:12am
As an example on the attached chart of ej from 29th july until recently, if the 30ema is flat it can go either way which may put you in then stop you out. why bother. look for the situation where the purple circle may exist. trade with trend on the 4h box breakout.
Attached Image (click to enlarge)
Click to Enlarge Name: eur jpy.GIF Size: 62 KB
  • #2,136
  • Aug 20, 2009 8:17am Aug 20, 2009 8:17am
Quoting shiko
I can be wrong of course but the trend is here, probability of a winner after loser is higher than of a winner. Could you give me the dates whgen second trade was a winner according to your observation?
The date was mentioned in the post (week of June 8): http://www.forexfactory.com/search.p...nduser&u=29136
Greetings from Guanajuato, Mexico
  • #2,137
  • Aug 20, 2009 8:20am Aug 20, 2009 8:20am
I am in March right now. will look into June 8 as I arrive
  • #2,138
  • Aug 20, 2009 8:23am Aug 20, 2009 8:23am
Here's another example: the week of May 25. The Short trade was a loser, followed by a Long trade that went to TP3.5.

I've now given you 3 examples of trades in the last 3 months that go contrary to your statement that a second trade was ALWAYS a loser in 2009. Unless you can back up your statements with some concrete data, it sounds more like you have a pet theory instead of facts. The 3 examples I've given you would make up for a lot of losses, so I'm not sure what benefit would be gained by discarding the second trade.
Greetings from Guanajuato, Mexico
  • #2,139
  • Aug 20, 2009 8:26am Aug 20, 2009 8:26am
Quoting yen44x
Here's another example: the week of May 25. The Short trade was a loser, followed by a Long trade that went to TP3.5.

I've now given you 3 examples of trades in the last 3 months that go contrary to your statement that a second trade was ALWAYS a loser in 2009. Unless you can back up your statements with some concrete data, it sounds more like you have a pet theory instead of facts.

It is not a pet theory.

I am going week by week. according to Move stop loss to BE once it is at TP1, I am doing now move to s/l after 50/80 pips in profit.
pet theory my ass. where did you get this lexicon?
  • #2,140
  • Aug 20, 2009 8:36am Aug 20, 2009 8:36am
Quoting shiko
It is not a pet theory.

I am going week by week. according to Move stop loss to BE once it is at TP1, I am doing now move to s/l after 50/80 pips in profit.
pet theory my ass. where did you get this lexicon?
Don't get upset Shiko . . . you're the one that made the statement that in 2009 if the first trade was a loser, then the second trade was ALWAYS a loser. I gave you 3 examples to the contrary just in the last 3 months and simply asked for some documentation to prove your point. If it can't be proved, it's a theory.

Here's a fourth example, and I'm not going to provide any more because I think the point is made: The week of April 27. The short trade went to TP2 before retracing (a loser by Ace's definition at the time) and the Long trade then went way past TP4.

I've given you 4 specific examples . . . that's fact. You've given statements which you've haven't backed up at all so far . . . that's theory. I told you before I'm not trying to argue with you. If you're right and can back it up with data, I'd be the first to switch to your method.
Greetings from Guanajuato, Mexico
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