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4H Box Breakout

  • #2,621
  • Aug 27, 2009 12:55am Aug 27, 2009 12:55am
Quoting Bobcat2

I'm wondering how much consideration you paid to setting the initial SL to the opposite side of the box? I need to do some backtesting on this, but many box traders place the initial SL at the midpoint (50%) of the box. With the initial SL set at 50% of the box, the opening risk is reduced by 1/2.

I've also seen some fib box studies where 68.2% retracement is hit, price is likely to continue to the opposite side of the box. This may be a good compromise. What do you think?
Bobcat2 . . . I like your idea and will give it a try on a demo account. One question: In referring to the fib box studies, did you actually mean to say 61.8% instead of 68.2, or was 68.2 correct?

Thanks!
Greetings from Guanajuato, Mexico
  • #2,622
  • Aug 27, 2009 12:58am Aug 27, 2009 12:58am
Quoting yen44x
Bobcat2 . . . I like your idea and will give it a try on a demo account. One question: In referring to the fib box studies, did you actually mean to say 61.8% instead of 68.2, or was 68.2 correct?

Thanks!
I'm sure he meant 61.8 because its standard.

38.2 .....68.2 (see where the error might have occurred)
  • #2,623
  • Aug 27, 2009 1:01am Aug 27, 2009 1:01am
Quoting Ace284
I'm sure he meant 61.8 because its standard.

38.2 .....68.2 (see where the error might have occurred)
That makes sense . . . in fact, I think there's a greater than 61.8% chance you're right.
Greetings from Guanajuato, Mexico
  • #2,624
  • Aug 27, 2009 1:03am Aug 27, 2009 1:03am
I closed at tp3. I use the ibfx 0:00 gmt candle though. That candle has been a little more profitable the last 8 weeks or so. I did all my original backtesting with the ibfx candle so I am comfortable using it.
  • #2,625
  • Aug 27, 2009 1:06am Aug 27, 2009 1:06am
Quoting 11andy11
I closed at tp3. I use the ibfx 0:00 gmt candle though. That candle has been a little more profitable the last 8 weeks or so. I did all my original backtesting with the ibfx candle so I am comfortable using it.
Very nice trade, and a lot better than I did this week

It's good to see you've come out of retirement.
Greetings from Guanajuato, Mexico
  • #2,626
  • Aug 27, 2009 1:14am Aug 27, 2009 1:14am
I've seen breakout strategies for daily and weekly. I've never seen one like the one i'm about to present.

DRAW a box connecting the high of the first 4hr candle(00:00) of the week with the low along with a buffer of 20 pips on each side.
The week starts at the open of the Australian session.
If I had a penny for every time someone has asked which candle it is..i wouldn't need to trade forex to make money. For the next person who is going to ask, follow these instructions.
Download an FXDD platform. Press Ctrl+y on a 4hr chart. Lines will magically pop up and at the start of every week the first 4hr candle should form on the line. This is the candle you use for the High and Low.

Box Forming Times:
GMT- 21:00 to 01:00
EDT - 17:00 to 21:00
FXDD time - 00:00 to 04:00

Use Time zone conversion to find out your specific time.

DO NOT ask when the bar forms and when it closes as its been answered MULTIPLE times. I post every week when the bar closes. If you're not willing to go through the thread or wait one week for my post on when the bar closes than this system isn't for you.
I'm sorry, but it's just gotten to a point where people ask every time.

Some brokers begin operating an hour earlier then FXDD or later. If you first 4Hr bar closes at 00:00 GMT, then that's not the right candle. The best thing to do is to download an FXDD demo platform and use that as reference.
Rules:
- Add a buffer of 10-20 pips on each end of candle
- Buy on upper break of weekly box (including buffer+spread)
- Sell on lower break of weekly box (including buffer)

SL - other side of Box
TP1 - 1x box size
TP2 - 2x box size
TP3 - 3x box size
TP4 - 4x box size

This system works on many JPY pairs.
GBP/JPY
EUR/JPY
AUD/JPY
CHF/JPY
CAD/JPY
**GBP/JPY is the best pair.
May work on other pairs, testing is required however.


I like to use 3x-4x box size as TP.
I take don't profits at 1x size of box because larger reward is key.

I move stop to BE after 1x has been hit.

Advantages
- 30 mins a week
- no worrying about charts filled with indicators
- higher reward than risk on EACH trade
- easy to back test

Important:
Probability
Results
Q&A (thanks to fxann)

Indicators below, thanks to fx2248 for your help.

Feedback would be great from all you FX experts and GOOD LUCK!



Im posting ACE system to remind me this is the original system..
  • #2,627
  • Aug 27, 2009 1:18am Aug 27, 2009 1:18am
Quoting 11andy11
I closed at tp3. I use the ibfx 0:00 gmt candle though. That candle has been a little more profitable the last 8 weeks or so. I did all my original backtesting with the ibfx candle so I am comfortable using it.
My Fxcm micro start at 1715hrs end at 2115.. so i have to look into 15mins chart to get exact price..
  • #2,628
  • Aug 27, 2009 1:30am Aug 27, 2009 1:30am
ace after reading ur first post again,i just wana check with u.. fxdd first 4hr candle issit same as aussie open or before any market open?
just need confirmation..
  • #2,629
  • Aug 27, 2009 2:00am Aug 27, 2009 2:00am
Quoting yen44x
Very nice trade, and a lot better than I did this week

It's good to see you've come out of retirement.
yeah, glad to be back. Sundays on this thread are a killer. I'm better, got some fresh air
  • #2,630
  • Aug 27, 2009 2:02am Aug 27, 2009 2:02am
Quoting 11andy11
yeah, glad to be back. Sundays on this thread are a killer. I'm better, got some fresh air
Well, whatever you do, don't look at the post just before yours . . . you'll retire again.
Greetings from Guanajuato, Mexico
  • #2,631
  • Aug 27, 2009 2:13am Aug 27, 2009 2:13am
Quoting Freako
ace after reading ur first post again,i just wana check with u.. fxdd first 4hr candle issit same as aussie open or before any market open?
just need confirmation..
In your previous post, you quoted post #1 that the candle begins forming on Sunday at 5 p.m. EST. That corresponds to 8 a.m. on Monday in Australia (www.timeanddate.com), which is when I assume the market opens there.
Greetings from Guanajuato, Mexico
  • #2,632
  • Aug 27, 2009 2:14am Aug 27, 2009 2:14am
Quoting yen44x
Well, whatever you do, don't look at the post just before yours . . . you'll retire again.
Funny!!
  • #2,633
  • Aug 27, 2009 2:15am Aug 27, 2009 2:15am
Quoting yen44x
Well, whatever you do, don't look at the post just before yours . . . you'll retire again.
ah, no sweat, as long the pips are positive
  • #2,634
  • Aug 27, 2009 2:16am Aug 27, 2009 2:16am
Quoting yen44x
In your previous post, you quoted post #1 that the candle begins forming on Sunday at 5 p.m. EST. That corresponds to 8 a.m. on Monday in Australia (www.timeanddate.com), which is when I assume the market opens there.
yen,im sorry but i guess i need ur help or anyone.. i dont really understand time diff.. im singapore with gmt+8.. my platform is utc-0500.. so what time does candle actually start? i ask the cust service n they told me market open 0515 on sunday.. so im confused now.. i thought it was suppose to be 1715 sunday on my platform.. that is 0515 monday my time..
  • #2,635
  • Aug 27, 2009 2:19am Aug 27, 2009 2:19am
I have attached my chart...........My first weekend candle is only for 2 hours as my 00:00 candle closes at 11pm EST which is the one you see within the boxes..............

As you can see when price did retrace, it just missed my stop loss at BE by just a few pips..........

Ace, if i go with the bar where the horizontal line is, when it is just for 2 hours it is not a very good interpretation of price action on my charts and even when I put the indicators on, it automatically boxed the 00:00 candle as you can see.......... The box range is not that much different from yours but just a few pips I would say.
Attached Image (click to enlarge)
Click to Enlarge Name: 4hr box.gif Size: 27 KB
Keeping Life Simple
  • #2,636
  • Aug 27, 2009 2:20am Aug 27, 2009 2:20am
Quoting 11andy11
ah, no sweat, as long the pips are positive
That's what I always say . . . "Take Pips, for fast, temporary relief of pain" and "If you're suffering from painful posts, take TP3 once a week".

Ah, it's late and I'm getting giddy . . . g'nite all.
Greetings from Guanajuato, Mexico
  • #2,637
  • Aug 27, 2009 2:25am Aug 27, 2009 2:25am
Quoting Freako
yen,im sorry but i guess i need ur help or anyone.. i dont really understand time diff.. im singapore with gmt+8.. my platform is utc-0500.. so what time does candle actually start? i ask the cust service n they told me market open 0515 on sunday.. so im confused now.. i thought it was suppose to be 1715 sunday on my platform.. that is 0515 monday my time..

ok the easiest way to figure it out is to get the fxdd demo and then plot the box on your charts once it sets up http://www.fxdd.com/en/trading-softw...omparison.html. The second easiest way is to figure out your broker's gmt offset. I believe that the fxdd candle is 21:00 gmt till 1:00 gmt. Someone correct me if I am wrong. You will have to go in and manually place the box on the correct gmt timeframe that correlates to the fxdd candle. Go down to the one hour charts to figure it out. I don't understand why your broker does not price candles on the hour. That could make things very confusing for you. You need to ask your broker what their gmt offset is not your personal gmt offset is. Alot of broker use completely arbitrary times for their charting.
  • #2,638
  • Aug 27, 2009 2:29am Aug 27, 2009 2:29am
Quoting Freako
yen,im sorry but i guess i need ur help or anyone.. i dont really understand time diff.. im singapore with gmt+8.. my platform is utc-0500.. so what time does candle actually start? i ask the cust service n they told me market open 0515 on sunday.. so im confused now.. i thought it was suppose to be 1715 sunday on my platform.. that is 0515 monday my time..
As far as I can figure, Freako (and that's not very far), if the candle begins at 2100 GMT time, and you're gmt+8, that means the candle (for you) opens on Monday at 5 a.m. your time and closes at 9 a.m.

Check the candle on FXDD. Once you see a new candle forming, you'll know the first 4-hour candle has ended and you can set your TP's.
Greetings from Guanajuato, Mexico
  • #2,639
  • Aug 27, 2009 2:51am Aug 27, 2009 2:51am
Quoting yen44x
That makes sense . . . in fact, I think there's a greater than 61.8% chance you're right.
Actually Ace is 100% correct...as always!

Sorry about the typo, guys...
  • #2,640
  • Aug 27, 2009 4:12am Aug 27, 2009 4:12am
Hi all,

this is my second week on this system... with about 300 pips on my pocket already. It because some noise of reversal fear, and not follow 100% the rules (moving SL).

I hope someone can modify the indicator adding spread field, and option to have SL at 50% of the Box.

Happy trading to all, thanks!
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