4H Breakout With Custom Stop Loss

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How many pips do you average weekly?

332 pips last week
-21 pips 2 weeks ago
323 pips 3 weeks ago (tho I took a re-entry that week that netted me an additional 238 pips that this system would normally not have gained, re-entries with this system are at your OWN discretion)
127 pips 4 weeks ago (tho I took a re-entry that week that netted me an additional 355 pips that the system should have obtained should you have decided to trade on Friday or not)

So that's 1 month with a total gain (following my exact rules) of 761 pips last month

Including my re-entries I have netted a total of 1354 pips over the last 4 weeks

Hi Pharoah:

Please post an image of your setup or past trades...

Thanks,
JS

I sure can, and I will also tell the exact trade using those images.



In week 1, I placed my trade buy order at 159.156 and it got stopped out at 160.426, I then placed another trade this week on friday again at 159.156 and closed it out before the end of the weekend for a VERY nice profit.



In week 2, I placed my sell order at 161.837, and it got stopped out at 158.607, I then placed another sell order when the price moved back over the Red MA at 159.011, and closed it out before the end of the week at 156.631.



In week 3 I placed my sell order at 155.135, it got stopped out at Break Even, I then placed a buy order at 156.765 and hedged it (I always hedge opposite positions from the trade before it) and that trade got stopped out at no loss because of the Hedge, I then placed another buy order at 156.765 without hedging as the last break was a buy order, it got stopped out at 156.555. I stopped trading after that for that week.



In week 4, I placed my sell order at 155.696, and the trade stopped out at 152.376.

I must restate that re-entries are at your own risk, and hedging is only allowed if your broker allows it.

Thanks for sharing this. I can't wait to work with these set ups and guidlines.

No problem, but as with any system, I strongly recommend testing this strat on a demo account before trading live.

I'll follow this thread as well. Let's see the potential of this variation.

I will be following too. Great job being done on already great system.

I hope it's everything I've tried to make it be, I'm having an EA done based on this exact system, so I will be posting the long term backtest results just to see if it could have survived back when the beginning of almost every week always ranged for a couple days. But, we'll see, for now we might as well forward test while the market is in favor of the entry systems rules.

Thanks, I believe this custom stoploss system can actually be applied to a number of trending strategies.

I understand a very important point here that as price moves towards BE point, so trailing stop following and thus reducing possible loss in case of price reversing and moving towards stop loss point.

actually, taking partial profits has sense only with such adjustments.
Taking partial profits and letting full stop losses has no sense.
Right now my head is just not working. It is too late. I gotta think of this trailing stop adjustments tomorrow. i tis not as simple as original rules.
Anyway, great job.


another great point about this system, that we have a point of reference around which price moves and we have some kind of lever to trade. Not like a total chaos.

Yeah, my exit rules are a little more complicated because of the conditions, but when you master how to use the system based on those conditions you'll find it is rather effective in locking in profits.

I'm not exactly sure what makes this year sooo much more profitable for this system than previous years, but I do know since before 2002, this entry system would have eaten up anybody's account. However, it is still a very effective entry system, even in those ranging conditions, and I believe the method I have devised will profit in those years, might not be a fantastic WOW I'm rich profits, but it's better than getting eaten up and spit out right?

But I must note that this system should profit in those previous years WITH hedging involved to eliminate those breach and reverse entries that plague the first few days of those weeks in those years. I do not expect any system would profit in those years using this method without hedging to be a damper on loosing trades.

ok guys, I've taken a screenshot of my current position, I'm using the demo account from FXDD as this is the one you are all most familiar with for all my screenshots.



You'll see in this image, I have made a crosshair to mark my stoploss, and have setup a vertical line to mark my net stoploss point for the next bar, my order was triggered on the breakout of the breakout zone.

Hi Pharoah,

Thank you for sharing your system with us. I didn't see where you address the dealer spread. Do you not include it in your trading system?

Thanks.

no, because with my particular broker the spread is so low, and the system is so profitable that it doesn't matter to me. For others tho, I would recommend taking into consideration the dealer spread, I'm not exactly sure how that functions but Ace has referenced it perfectly in his 4H Box Breakout Thread found here.

Thank you for pointing that out tho for others to consider.

I've decided after reviewing other time frames that I am going to place a pending hedge order at the Break Even point (not sure if I can do this with FXDD but I'm doin it on my live) because we are approaching a support and resistance zone.

Here is the Support and Resistance Chart.

I note from one of your earlier posts on a different thread that results were not good on previous years, notably 2000. I have noticed the same.

Have you considered a filter such as only taking trades in the direction of the daily trend?

It seems to me that this is essentially a weekly strategy and is asking a bit much to base that strategy on the break out direction and range of one 4 hour bar.

The problem in the early years was the range at the beginning of the week, trades are executed, and stopped out immediately because

A: The particular EA that's available right now that uses my rules does not use my conditional rules.

B: The range at the beginning of nearly every week caused a order stop in a loss, order stop in a loss, order stop in a loss, order stop in a loss, order stop in a profit. Earlier years as mentioned multiple times by both Ace and other stoploss system developers for Ace's system is that is would have eaten up an account and spit it out.

This is LARGELY due to the ranging at the beginning of the weeks. I have resolved most of this by using hedging, and the 2nd conditional rule set (manual backtest of the year 2000-2001) as I don't have the EA yet, an EA is currently being developed based on my particular specifications, and I will be posting my exact results from the year 1990 to now (I think 19 years of backtesting should be enough to see if my system can handle long term ranged market conditions on a theoretical level)

This year this system would have cleaned house, here are my results from the EA that is currently available that does not apply my conditional rules nor does it consider money management, this was straight .1 lot sizes.

Strategy Tester Report

Symbol GBPJPY_fx (Great Britain Pound vs Japanese Yen)
Period 4 Hours (H4) 2009.01.26 00:00 - 2009.08.14 20:00 (2009.01.26 - 2009.08.15)
Model Every tick (the most precise method based on all available least timeframes)
Bars in test-------------------------------------1319
Ticks modelled----------------------------------8059796
Modelling quality--------------------------------41.39%
Mismatched charts errors------------------------2
Initial deposit-----------------------------------5000.00
Total net profit---------------------------------4215.81
Gross profit-------------------------------------5794.64
Gross loss---------------------------------------1578.83 (Negative Figure)
Profit factor------------------------------------3.67
Expected payoff--------------------------------54.75
Absolute drawdown-----------------------------2.03
Maximal drawdown------------------------------496.52 (8.53%)
Relative drawdown------------------------------8.53% (496.52)
Total trades------------------------------------77
Short positions (won %)------------------------40 (37.50%)
Long positions (won %)-------------------------37 (45.95%)
Profit trades (% of total)------------------------32 (41.56%)
Loss trades (% of total)-------------------------45 (58.44%)
Largest profit trade---------------------------861.95
loss trade------------------------------------- 141.64 (Negative Figure)
Average profit trade--------------------------181.08
loss trade-------------------------------------- 35.09 (Negative Figure)
Maximum consecutive wins (profit in money)----3 (436.09)
consecutive losses (loss in money)---------------8 (-184.24)
Maximal consecutive profit (count of wins)-----861.95 (1)
consecutive loss (count of losses)---------------242.17 (2) (Negative Figure)
Average consecutive wins---------------------2
consecutive losses------------------------------2

I don't get it.

In your chart, the buy occurred when the red ema was below the H of the first weekly bar and the black was above the H of the first weekly bar.
That does not meet either Condition 1 or 2.