1H Cubicle Breakout System

TOTAL VISUAL UPDATE 25 AUG @ 20:00 GMT

I have removed the "First Version" of my system. This is UPDATE II

Please open the new .zip file for the current set up (screen shot of my setup attached)

Trading principles are the same...only thing that changed is supporting visual/confirmation indicators.

I added the Snake Meter because it gives real-time multi-time frame color signals...For example. I only take trades on the 1H when the 4H is the same color.

I added Waddah Attar Trend because it is MUCH better than the AO...when used as a Signal Arrow confirmation indy it will ELIMINATE false trades.

READ THE ATTACHED WORD DOCUMENT
Pairs: GBP/USD right now...GBP/JPY in the future
Time Frame: 1H
UPDATE******* STOP LOSS IS NOW: The Fractal before the entry candle, or in other words the level you used to drag the Fib plot to*******

UPDATE: 25 AUG I have gotten rid of the AO and added the Waddah Attar Trend meter..very accurate and non-repainting.

Use is as follows:
After entering on the break of the signal candle confirm movement of trade with corresponding WAT color bar


What this is:
1. A 1H breakout strategy is a Price Action/Fibonacci based trading strategy.
2.A simple, repeatable mechanical trading system
3.A template that can be applied via the trader to achieve a specific and defined profit

What this is NOT:
1. The Holy Grail
2.An indicator laden, user intensive trading system
3.A scalping system with specific Pip targets (exit at +5, or +10 Pips)

Why I am doing this:
I want to improve my trade execution sequence (see checklist) via a better method to exiting a trade once the 161.8 level has been hit. (Trailing stop experimentation)

What you will get out of doing this:
You will gain confidence from practicing, mastering a mechanical thought process and trade execution sequence. You will gain an understanding of how Fibonacci affects all trades, furthermore, you will learn to control greed and master patience.

The easiest thing about my system:
It can be applied using a simple checklist, which allows for ZERO user input…just execute the process steps in order.

The most difficult thing about my system:
You will enter trades for short/medium/long durations, all of which are completely out of your control…you MUST wait for the target to be reached.
Oh yeah, and the Stop Loss is at least 150 pips from your entry.

The most important thing to remember:
Trust the trade, and stay in until the target is reached.

Concept:
By utilizing the ScalperSignal alerts which are based on PA and MA correlation, the 1H Cubicle Breakout Strategy triggers trades which once the entry criteria is met will take the trade to a profit level of 161.8, 80% of the time on GBP/USD. (More pairs in testing)
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The "secret" to the fib plots is in the doc, as well as ALL settings, and other info. Please download the .zip it will contain everything needed. Including my template.

I hope that my explanation in both image/words will satisfy any readers questions. If you DO have a question, please post it HERE...DO NOT PM me please!!!! Thank you.

-Darren

Probability Analysis:
So, there is a 5% Chance we will only hit 138.2 Fib

A 80% Chance we’ll hit 161.8

A 45% Chance we’ll hit 261.8

A 15% Chance we won’t hit any level including 138.2 (Total Failure)


I think those are pretty good odds.

Largest drawdown before hitting 161.8 or 261.8 was -150 pips.

I’d say on ANY trade you would need a stop loss of 200 pips! I know, I know…crazy…but look at the odds.

There were only 2 Drawdowns over 100 pips prior to hitting 161.8/261.8…so it would be worth the pain for a little while.

Just set the TP level and forget.

The average Trade pip profit was @ 40 pips (LOW AVG)…so from May 1 09 to Today…that’s a net profit of 5,400 pips…on ONE pair.

If you want to try this system out, this is what I am requesting:

Everyone bring up a chart of GU with my template etc...

I want you each to post a picture of a false entry....

Go back 2 years if you want, but post a false entry and explain EXACTLY why it is a false entry.

-Darren

Hi,

I am unable to open the documents with either Word or excel.

Hi pillouti, I'm trying to get my chart looking like yours but I can't seem to figure out what the two timezone settings are actually referring to.

My pivot point for today shows up as 1.65212, which I believe is higher than yours. However, the day start is marked on the correct candle :/

Just doing the odds... if we only have an 80% chance of hitting the 161.8 target, then for every 100 trades we get (at an average win of 40 per trade and average loss of 150):

80 * 40 = 3200 pips win
20 * 150 = 3000 pips loss.

Almost breakeven, assuming your stats are correct. Or is there something I'm missing here? :/

I also can not open document

It won't open for me.
I had to download about 100 Meg of MSOffice updates to bring it up to 2007. It still wont open it. It says the file has an error.

Most everyone has a .pdf reader. Much easier. The file is listed below.

Thanks guys.

Thanks a lot Redhouse thats great can now open it
Regards
Koyco

I notice that when in a trade, there are often intervening signals.
When that happens, what do you do?
Close your trade?
Ignore the other signals?

I only exit when the target is hit

Do you take the new signals on top of the existing trade?
Do you just ignore them?
There are a bunch of them.

You have to do one or the other- either enter those trades or ignore them.
You would have had to deal with this in your backtesting.
How did you handle them?

Here's something else I noticed.

The chart I'm posting is from the example in your document.

You're showing drawing your fib from the low of the signal bar to the fractal marked "2". You call it the "most recent up fractal".

That fractal did not exist at the time of the signal bar completion. A fractal requires two completed bars to its right to be valid.
There was only one completed bar.

You would have had to go back until you found a valid fractal higher than the high of the signal bar. This might have been a week or a month and an additional 100 pips and a TP much farther away.

If you backtested using nonexistant fractals, such as this, it would effect your results- maybe for the better, maybe for the worse.

It looks like we may have had similar ideas, Mate. Have a look HERE.



Let's see if we can figure it out.

Maybe he is using a 3-bar fractal as opposed to 5-bar.

Please clarify

He's not. Not with the template he provided, at least.
He's using the MT4 default fractal, which is 5 bars.

good point. i failed to mention that one the PA has caused an entry I do not draw the fib plot until after the most recent fractal has posted closest to the entry...yes Im using the standard mt4 fractal...

alos in regards to the failure rate...of the 21 that failed ...17 were clearly against the overall trend. so you still have to make good decisions.

I know there are a lot of questions...just try this out this week using the checklist. then we can talk about specific holes in my plan

thabks for all the input!!

I don't see how you could wait for the fractal to form.

The next bar could be the entry bar. Without having anchored your fib to a fractal, at the time the order was placed, you have no TP point. It would be a blind trade, with only a SL, until that bar closed, an hour later.


How did you determine the overall trend to reach this conclusion?

i know that the order of progression doesnt seem to make sense...but please try it before analyzing what would happen. Im totally open to critsicm..I have no vested interest in propagating a system that doesnt work, it would be a waste of my time and yours.

cheers...Darren