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4H Box Breakout

  • #2,761
  • Aug 28, 2009 11:55am Aug 28, 2009 11:55am
Quoting Ace284
Yes, I do risk 8% per week. Thats on both trades. If anyone remembers my post way back in the thread, I used 8% max. I did use AUD/JPY but soon after stopped using it and added to risk onto GBP/JPY and EUR/JPY.

GBP/JPY - 2.5% each trade
EUR/JPY - 1.5% each trade

Now I only trade GBP/JPY. 3-4% on each trade. Would result in 6%-8% loss in a week, worst case scenario. When target hits its +12% - 16% in a week.

But i've been trading it live for 9 months now, as many know, so don't use that much until you're ready. For a few months when i started...

Hi Ace, father of all that is good.

Why do we trade GBP/JPY + EUR/JPY, aren't the actually very closed correlated?
Maybe it's a dumb question, but it just struck me.
  • #2,762
  • Aug 28, 2009 12:24pm Aug 28, 2009 12:24pm
Quoting Jesper
Hi Ace, father of all that is good.

Why do we trade GBP/JPY + EUR/JPY, aren't the actually very closed correlated?
Maybe it's a dumb question, but it just struck me.
lol, you don't have to call me father, unless you really want to

And yes, they're closely correlated. Exactly why both are profitable.

Keep in mind that correlation isn't completely measured in pips. As you probably know its measured in similar movement. GBP/JPY has the highest range in pips which is why it's the most profitable.
  • #2,763
  • Aug 28, 2009 12:28pm Aug 28, 2009 12:28pm
Quoting basomakm
hi guys
want to share this idea which is putting the EMA 200 on the chart
if the 1st 4H candle closed under the EMA 200 so we put only sell order and vise versa
i did a back test to September 2008 with applying this idea and the results was good (GBP/JPY)

but didnt decide how to put the stop loss

i need to know your opinion it's a bad or good idea .

Note: if someone shared the same idea be sure that i didn't read it !

Thanks >>>
Its funny how you skip the second week on your chart. Perfect example of looking for what you want to see. The first week was BE, second hit TP4, third two losses, and fourth BE.

Without the second week, you'd be in the drain. But I welcome you to backtest all weeks, not just the ones that would have worked with the moving average.
  • #2,764
  • Aug 28, 2009 12:33pm Aug 28, 2009 12:33pm
Attached is the equity chart for 2006, assuming the parameters mentioned in my previous post, ie:

1) 4x TP, according to Ace's indicator
2) Move SL to BE at TP1
3) Keep both trades open regardless of ATR
4) Take every trade
5) Close trade at the last 4 hr candle of the week, if not already TP'd or SL'd.

A rough drawdown to early June, clawed it’s way back up, and then hit a nasty flat market in the fall. Ended the year on an up note, but still below the high of the year.


Tom
Attached Image (click to enlarge)
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  • #2,765
  • Aug 28, 2009 12:39pm Aug 28, 2009 12:39pm
Quoting Ace284
lol, you don't have to call me father, unless you really want to

And yes, they're closely correlated. Exactly why both are profitable.

Keep in mind that correlation isn't completely measured in pips. As you probably know its measured in similar movement. GBP/JPY has the highest range in pips which is why it's the most profitable.

lol ok.

Maybe another dumb question, but why don't we just skip EUR/JPY and trade doubled lots with GBP/JPY instead?
Or are we kind of using the EUR/JPY as a safety pair incase GBP/JPY goes against us since it's less volatile and, in a way, works like an SMA in regard to the GBP/JPY?
It feels like i just entered Long in a strong bearish market by asking this question, lol.
  • #2,766
  • Aug 28, 2009 12:58pm Aug 28, 2009 12:58pm
Attached is the equity chart for 2007, assuming the parameters mentioned in my previous post, ie:

1) 4x TP, according to Ace's indicator
2) Move SL to BE at TP1
3) Keep both trades open regardless of ATR
4) Take every trade
5) Close trade at the last 4 hr candle of the week, if not already TP'd or SL'd.

Here is where things start perking up, to say the least. A huge run through late July, followed by a very choppy and volatile market, which stopped out the 1x BE repeatedly (17 times, by my count, from July forward). Nonetheless, a hugely successful year.
Attached Image (click to enlarge)
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  • #2,767
  • Aug 28, 2009 12:59pm Aug 28, 2009 12:59pm
Quoting Jesper
Maybe another dumb question, but why don't we just skip EUR/JPY and trade doubled lots with GBP/JPY instead?
That's exactly what I do now as stated on my post below.

Quoting Ace284
Yes, I do risk 8% per week. Thats on both trades. If anyone remembers my post way back in the thread, I used 8% max. I did use AUD/JPY but soon after stopped using it and added to risk onto GBP/JPY and EUR/JPY.

GBP/JPY - 2.5% each trade
EUR/JPY - 1.5% each trade

Now I only trade GBP/JPY. 3-4% on each trade. Would result in 6%-8% loss in a week, worst case scenario. When target hits its +12% - 16% in a week.
  • #2,768
  • Edited 1:25pm Aug 28, 2009 1:15pm | Edited 1:25pm
Quoting Freako
after all ideas n suggestion,what is the current system?
Quoting yen44x
99% of the original system is still valid. The only change I can remember Ace making is going to BE when TP1 is reached, which has now been added to the first post on this thread.

Other than that, it's up to you to sift through the suggested modifications and give them a try if you choose to. If you choose not to, it's still a great system.

I will trade the variation below on monday, i think it's done by Danno, could be someone else or the combined force of this thread.
Don't mean to rob anyone of their ideas/work so just let me know.

Inserted Code
Danno96 wrote:

[b]Based on ACE's 4Hrs Breakout Strategy with Variation[/b]

[b]1)[/b] Define box range based on 1st 4Hr candle of the week
[b]2)[/b] Place bracket stop order 20 pips above and below high and low
   of the candle range with SL set at the oppose of the range.
[b]3)[/b] Profit Targets are set at multiple of range in (1) for GBPJPY 
   aim for 4X and for EURJPY aim for 3X
[b]4)[/b] Move SL to BE once 1X TP is reach
[b]5)[/b] Close trade @end of the week if target TP / SL not reach
[b]6)[/b] Only 2 trade per week one S and one L

[b]Variations:[/b]

[b]1)[/b] Move SL to BE + 20 pips once 1X TP is reach
[b]2)[/b] Move SL to 3X when price reach 4X and let profit run to WE
[b]3)[/b] Move SL to 1X when price reach 2X
[b]4)[/b] Do not trade when range is > than 200, SL will be > than 2%
[b]5)[/b] 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
These new rules made Ace's original system 25% more profitable since January 2009.
Of course it comes with bit more screen time.
So it's up to everyone to decide how they feel about it.
75% is still a REALLY good turnover for the amount of work you put in a monday morning.

Backtested from January 5th 2009 to August 10th 2009.

Ace system: +5028 pips
Ace 2G system: +6729 pips

You can find the complete back test all the way back to january 2002 here with Big thanks to Danno:
http://www.forexfactory.com/showpost...postcount=2654

Worth noting is that Ace now only trades GBP/JPY with doubled lots.
This is up to you, but Danno96's backtesting only refered to GBP/JPY + EUR/JPY.
So chances are that his backtest doesn't apply anymore if you change your pairs,
probably isn't such a big difference since these pair are correlated,
but for the sake of honesty i feel i had to say it.

Also worth noting is that i think we're still waiting for a backtest of candles larger than 200 pips.
To enter or NOT..... to enter, that is the question.



Best wishes
Jesper
  • #2,769
  • Aug 28, 2009 1:27pm Aug 28, 2009 1:27pm
Quoting Ace284
That's exactly what I do now as stated on my post below.
Aha, thanks, then i'm Not crazy after all!
  • #2,770
  • Aug 28, 2009 1:42pm Aug 28, 2009 1:42pm
Quoting yen44x
I know exactly what you mean, Shiko. In this example, the turtles were instructed to line up single-file, but did they follow the rules? No way.

Sorry about that . . . I've been done trading since Tuesday and I needed something to keep the mind occupied.

Good for you
I am busy thinking of another strategy to trade. Intra day. Need some strategy to trade outside of 4H box.
  • #2,771
  • Aug 28, 2009 1:46pm Aug 28, 2009 1:46pm
Quoting yen44x
I know exactly what you mean, Shiko. In this example, the turtles were instructed to line up single-file, but did they follow the rules? No way.

Sorry about that . . . I've been done trading since Tuesday and I needed something to keep the mind occupied.

The strategy they were given was complete strategy. detailed with position sizing, additions to profitable positions everything. But most of them did not follow. Those who did prospered beyond wildest dreams
  • #2,772
  • Aug 28, 2009 1:47pm Aug 28, 2009 1:47pm
Quoting Ace284
Its funny how you skip the second week on your chart. Perfect example of looking for what you want to see. The first week was BE, second hit TP4, third two losses, and fourth BE.

Without the second week, you'd be in the drain. But I welcome you to backtest all weeks, not just the ones that would have worked with the moving average.
Yes with this strategy we cannot be choosy. Who knows what week turns a big winner.
  • #2,773
  • Aug 28, 2009 1:50pm Aug 28, 2009 1:50pm
I noticed that spread for long position is missing from these rules. No wonder so many of us forgot to put spread in calculations and lost money. for long position 20 pips + spread.
  • #2,774
  • Aug 28, 2009 1:56pm Aug 28, 2009 1:56pm
Attached is the equity chart for 2008, assuming the parameters mentioned in my previous post, ie:


1) 4x TP, according to Ace's indicator
2) Move SL to BE at TP1
3) Keep both trades open regardless of ATR
4) Take every trade
5) Close trade at the last 4 hr candle of the week, if not already TP'd or SL'd.


Account was essentially flat until the fall, when all the markets went crazy. This type of volatility doesn’t happen very often, but this system sure loves it when it does.

Tom
Attached Image (click to enlarge)
Click to Enlarge Name: 08 chart.gif Size: 21 KB
Attached Image
  • #2,775
  • Aug 28, 2009 2:00pm Aug 28, 2009 2:00pm
Quoting shiko
I noticed that spread for long position is missing from these rules. No wonder so many of us forgot to put spread in calculations and lost money. for long position 20 pips + spread.
Hi Shiko

true, but shouldn't we add spread for the Short positions too?
  • #2,776
  • Aug 28, 2009 2:12pm Aug 28, 2009 2:12pm
Also, is there no way to automate the SL when certain TP's are reached?
That would an optimal solution, then we would have had a fully automated system.
That sure would be nice.
  • #2,777
  • Aug 28, 2009 2:27pm Aug 28, 2009 2:27pm
Same Strategy as posted in Post# 1607:

GBPJPY (1 trade) SHORT:

1st lot: +133 pips
2nd lot: +323 pips (BE stop missed by 1 pip, Closed at EOW)


EURJPY (1 trade) SHORT:

1st lot: +105 pips
2nd lot: 0 pips


AUDJPY (2 trades):

1st lot SHORT: +116 pips
2nd lot SHORT: 0 pips

1st lot LONG: -115 pips
2nd lot LONG: - 115 pips

CHFJPY (1 trade) SHORT:

1st lot: +73 pips
2nd lot: 0 pips
  • #2,778
  • Aug 28, 2009 2:50pm Aug 28, 2009 2:50pm
Quoting Jesper
Hi Shiko

true, but shouldn't we add spread for the Short positions too?
Nope. I remember when I first learned this, and I think it is quite useful.

*IMPORTANT*

Okay, say you wanted to go long at 150.00 and the spread was 5 pips. You would have to place your long order at 150.05. If you do that, then on your chart, when price hits 150.00, the order will be activated.

If you had placed your actual long order at 150.00, then it would be activated when your chart reads 149.95. That would be too early.

For short orders, say you want to sell at 120.00. Then you would place you're sell order at 120.00 which is the same. The spread is actually deducted when you buy your short (close the order). It might be confusing but remember that for each deal you buy and sell. One of the actions initiates the order and the other closes it.

So say the target for the short order is 115.00. You would have to place the close (buy back) order at 115.00 +spread which would be 115.05.

Just a general message:
If your a beginner and don't understand that, google it or ask again. Its the common bid/ask rules but I can't tell you how many times i've seen a trade mess up because of this (mainly scalpers but happens on 4H strategies sometimes as well). People wonder why their orders were not filled on the price they wanted, and then comes the whole story with my brokers changed my orders and so on..

Another example with spread 5 pips

You wan't to Buy/Long:

Long: 100.00
SL : 90.00
Target : 110.00

If that's what you want to do then you're orders would have to read..

Long order : 100.00 + spread = 100.05
SL : 90.00 (no spread)
Target : 110.00 (no spread)

If you want to sell/short:

Short : 120.00
SL : 130.00
Target : 100.00

If thats what you want to do then you're orders would have to read..

Short order : 120.00 (no spread)
SL : 130.00 + (spread) = 130.05
Target : 100.00 + (spread) = 100.05
  • #2,779
  • Aug 28, 2009 3:06pm Aug 28, 2009 3:06pm
Where can I find droland's rules for the system?
  • #2,780
  • Aug 28, 2009 3:27pm Aug 28, 2009 3:27pm
Quoting bar
Where can I find droland's rules for the system?
click on his name and you can search all of his posts to find the one you want.
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