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4H Box Breakout

  • #2,841
  • Aug 30, 2009 12:19pm Aug 30, 2009 12:19pm
No worries, as I get from the first post that ace is not testing other pairs as he says testing is required. I just looked at different than you did as when I read that he means for other people to test it as he is not. (The way I read it is probably the incorrect way to read it.)

Regards,
Jeff

Quoting Breadman
jeff
yes i did read the first post(and all the rest of them)

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 was asking if ace had done any testing on other pairs.
regards
breadman

ps i have looking gb/us
  • #2,842
  • Aug 30, 2009 12:38pm Aug 30, 2009 12:38pm
Quoting Pharoah
Ace's core system as it is in the original post would have destroyed anyone's account who would have been using this system in the years of 2000-2006. For those years, the first 4H bar sets the average of the weekly price, not the high or low. it wasn't until mid/end of week that the prices started moving in one direction or another.

Is Ace's system good? Definitely, no questions asked, Could it be improved? Definitely, No questions asked.

My revision on this system is expected to have an approximate 4% drawdown which it is currently 8% drawdown...
Pharoah,

You have my admiration for trying to improve Ace's great system. My admonition was for traders to question the source and relevancy of these "modifications" to Ace's rules.

Sorry, no disrespect, but basing one's opinion on old data from 3 to 10 years ago is only remotely relevant to the dynamics of the current market. How many trading systems from that era are actually proftable in today's environment?

My point is simply this. I only care about what is relevant in today's market. Using outdated data for current trading is a lot like using indicators to predict future market movenment...doomed to failure. I am not concerned with what happened 3-10 years ago. I will ride this horse until it stops performing.

And, I do take exception to your statement that "the bottom line is that the system is currently VERY flawed". It seems like a pretty silly statement given the high ROI produced this year. Ace must be crying all the way to the bank.

My apologies everyone... This difference of opinion is starting to clutter up Ace's thread; as such, this is the final posting I will make on this subject.

I stand by my earlier statement.
  • #2,843
  • Aug 30, 2009 12:44pm Aug 30, 2009 12:44pm
Quoting Pharoah
No, you most likely do understand my basic method (this was my first dev process of the system) and I had posted back before that I was going to be giving you all my findings as my particular system came from the knowledge of others here, like Ace for this fantastic breakout method, but it got removed.

I noticed this too when backtesting before jan this year basically, the whipsaws did the exact same thing to me, and as a result of my backtesting back before that point, I noticed that there were a few flaws in the "Basic" stoploss rules, I've...
Thanks. I look forward to the refined and "easy to read and understand" format of your system. I'm sure that you understand the skepticism regarding what could be seen as yet just another MA crossover system. As I said, "I am game" to backtest anything that works well during those time periods.

Tom
  • #2,844
  • Aug 30, 2009 1:04pm Aug 30, 2009 1:04pm
Quoting Bobcat2
Pharoah,

You have my admiration for trying to improve Ace's great system. My admonition was for traders to question the source and relevancy of these "modifications" to Ace's rules.

Sorry, no disrespect, but basing one's opinion on old data from 3 to 10 years ago is only remotely relevant to the dynamics of the current market. How many trading systems from that era are actually proftable in today's environment?

My point is simply this. I only care about what is relevant in today's market. Using [b]outdated...
I've heard that the MT4 backtesting is flawed so I look at results in that light. I prefer forward testing.

I did find great value in Danno's spreadsheet but my focus was on 2009 and the current market. Conditions can change in a heartbeat.

So I just looked back at his data and see that 2007, 2008 and now 2009 are very profitable with the modified version.

Pharoah i think you brought an interesting perspective to the trailing stop topic. What I'dlike to see is your EA on mtstats where we could see how that strategy improves results. But if the commercial issue prevents that then maybe an alternative is to put your refined startegy here with some sort of back testing. Again though for my purposes forward testing is obviously more telling.

Thanks!
Sandy
  • #2,845
  • Aug 30, 2009 2:16pm Aug 30, 2009 2:16pm
Quoting TYoung6608
One only need eyeball the charts prior to 07 to see that it would have been very rough to hang in there with certain versions of this system....


Taking partial profit + BE stop loss would be an answer for such conditions.
  • #2,846
  • Aug 30, 2009 2:23pm Aug 30, 2009 2:23pm
Quoting lugarejo
I´m also with OANDA and i have also any problem, because I follow the quotes in Metatrader demo Alpari and Oanda always hit my SL just in my pip and goes to the other way suddenly and in Alpari don´t touch my SL... so I haven´t add this week the spread and I have lost pips in the long...

What kind of problems have you had?

Thank you?
I have the same issue with oanda and i am in the process of looking for a new reliable broker. To completely get rid of that kind of problem ECN or No Dealing Desk brokers are the only way to go. In a illiquid market such as right now DD brokers can manipulate price to take out SL's and last week i experienced it a couple times with oanda.

I love oanda when the market is moving with full liquidity because they cant move it as much, but im still going to switch away. I just wish there were more .01/pip brokers out there that were dependable I am currently looking at AVAFX and FXDD right now both allow .10 pip which aint bad at all.
  • #2,847
  • Aug 30, 2009 2:38pm Aug 30, 2009 2:38pm
I remember someone mentioning that there is a bank holiday tomorrow which may effect the GBP through reduced volume.

I am going to trade but i'll reduce my risk from 3%-4% to 2%-3%.
  • #2,848
  • Aug 30, 2009 2:46pm Aug 30, 2009 2:46pm
Yes, summer bank holiday in UK
  • #2,849
  • Aug 30, 2009 2:46pm Aug 30, 2009 2:46pm
Quoting shiko
Taking partial profit + BE stop loss would be an answer for such conditions.
Thanks, that strategy is on my list of options...

The "to backtest or not to backtest" argument has arisen. The comments re the flaws of backtesting are true. The data can be crappy, the results are optimized without any consideration of the trader’s psychology in a real market, etc. There is a long list of valid reasons why results should not be trusted as any kind of gospel.


The concern is whether this system will work if/when the market type changes.


If I may, I cut and pasted Ronald Raygun's response (he said it very well) regarding the use of different trading systems when market types change, as this one inevitably will:

"This is one reason why I use so many different trading systems. Markets can change, but no one change can completely wipe out my trading. When it comes to determining whether or not a trading system works anymore, you first need to figure out what edge the system has. For example,

 

  1. BigDog Strategy: Breakout of the hours before and after the New York open.
  2. 4H Box: Direction of the week can be determined by the first 4H bar.
  3. Most Commercial EAs: Euro-Pairs move in a predictable range during the asian session, so when the price reaches the upper range, go short, and go long when the price reaches the lower range.
  4. AshFx: Trend Reversals and continuation using Bill Williams theories.
  5. TKimble Daily Scalping: Most of a day's movement happens in one large and defined burst. Any whipsawing will destroy that system.
  6. Scalping Systems in General: Look for a very specific pattern in the market to take advantage of.

Basically, you need to find the pros and cons for every system you trade. Once you have those pros and cons, you then figure out whether or not the current market is using that. If you have trouble remembering or analyzing this on the fly, write up a fact sheet for the system you are analyzing. State the edge the system has, what advantage the system has on the market, what kind of market the system works in, and what kind of market kills the system."

There is room for a lot of different points of view, I hope, in this thread. RR's makes tons of sense. There are also other points of view which make sense, and appeal to people differently, for different reasons.

I am interested as to whether Ace is backtesting, and what strategies he is considering. If Ace has a point of view as to whether different market types should be considered as part of this system's development, I am interested in his opinion.

Ace?

  • #2,850
  • Aug 30, 2009 2:53pm Aug 30, 2009 2:53pm
Quoting Ace284
I remember someone mentioning that there is a bank holiday tomorrow which may effect the GBP through reduced volume.

I am going to trade but i'll reduce my risk from 3%-4% to 2%-3%.
AndLabor Day in US next Monday too
  • #2,851
  • Aug 30, 2009 3:27pm Aug 30, 2009 3:27pm
I just placed the 10+ vouch hurdle. I'm going to leave it there until the first 4H bar has finished forming (It will begin forming in about 35 mins minutes). You guys know how it is, the confusing and repeated questions asked before the bar has formed. I just got a few messages asking whether I put people on my ignore list (blocked them), and I haven't.

So don't take it personally, again I just want to avoid some clutter and the restriction will be lifted when the bar has finished forming
  • #2,852
  • Aug 30, 2009 3:31pm Aug 30, 2009 3:31pm
I have a couple of questions regarding the 4H Box System, and I'm hoping to get some help from some of the experts out there. Admittedly, I haven't had time to read the thread, but I'm heavily into time management, and I figure if you've already read it, it would save me a lot of time to just ask questions. I did scan post #1, so please no criticism.

OK, here's the questions:

1. Regarding the 4-hour candle, I was really confused at first. However, I'm not a complete idiot. I live in Guanajuato, Mexico, and figured out on my own that GMT must refer to Guanajuato Mexico Time. I hate to pat myself on the back, but I had that one figured out within a couple of hours.

OK, I'm rambling . . . here's the question: I looked on the computer and it said I'm at GMT -5:00. Does that mean my computer clock is 5 minutes slow or what? The first post doesn't address this important question at all.

2. Second, regarding the 4H box. This has really got me mystified. I checked with several packing stores. Can you believe that none of them sells 4H boxes? One guy had a 8H box, and offered to cut it in half for me, but I wanted to check with the experts first. Will that work? If not, maybe one of you have an extra 4H Box that I could borrow. Again, not to criticize Ace, but this is another really important question that's not answered in post #1.

Anyway, I'm not the ungrateful type, so thanks for your help in advance.

I remain, with tongue firmly in cheek,

Yen
Greetings from Guanajuato, Mexico
  • #2,853
  • Aug 30, 2009 4:05pm Aug 30, 2009 4:05pm
Quoting yen44x
I have a couple of questions regarding the 4H Box System, and I'm hoping to get some help from some of the experts out there. Admittedly, I haven't had time to read the thread, but I'm heavily into time management, and I figure if you've already read it, it would save me a lot of time to just ask questions. I did scan post #1, so please no criticism.

OK, here's the questions:

1. Regarding the 4-hour candle, I was really confused at first. However, I'm not a complete idiot. I live in Guanajuato, Mexico, and figured out on my own that GMT...
LoL, thanks yen for the weekly dose.
If anyone is wondering how he was able to bypass the vouch hurdle, its because he's on my buddy list.

Alright, the bar has just started forming...4 more hours to go and then we can set our orders.

If you do have an urgent question, send me a pm
  • #2,854
  • Aug 30, 2009 7:04pm Aug 30, 2009 7:04pm
LoL, guys I haven't blocked anyone specifically. It's funny cause some of you have sent pm's stating that i'm not being fair towards newbs and have blocked them all because I have no patience. Also asking and demanding back in...

I've essentially restricted posts from everyone until the first 4 hour bar has finished forming. The only ones who can post are the people on my buddy list and people with 10+ vouches. The message you got if you tried to post was...

Sorry, you don't have the credentials required to access this page. If you can't post to a certain thread, you might be blocked by the thread-starter (learn more). If you believe you have reached this message in error, please contact us.

Its the 10+ vouch credential. I understand there are quite a few new members who are confused but just read that part, I haven't personally blocked anyone. I know ForexFactory's default message sounds kind of personal but...It'll be lifted when the bar has finished forming. Again, its to avoid some clutter at the start of the week.
  • #2,855
  • Aug 30, 2009 8:10pm Aug 30, 2009 8:10pm
Ice Broken.
Okay the official bar has finished forming (10 mins ago). Chart Below.
The box size is pretty big, 166 pips to be exact. According to Average True Range, TP4 will not be hit. I traditionally would not take this trade, but this week I will, moving SL to BE after TP1 has been hit. As members mentioned earlier, there is no point is not taking the trade even if TP4 shouldn't be hit. I feel more comfortable taking this trade with this because of the BE stop we have been using for a while now. Risk reduced because of bank holiday in U.K.

Good Luck and the vouch limit has been removed so anyone and everyone can post.
Attached Image (click to enlarge)
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  • #2,856
  • Aug 30, 2009 8:13pm Aug 30, 2009 8:13pm
Quoting Ace284

Good Luck and the vouch limit has been removed so anyone and everyone can post.

Thanks Ace, my numbers are closed to yours.

Happy Trading!
  • #2,857
  • Aug 30, 2009 8:14pm Aug 30, 2009 8:14pm
Agree on reduce risk. Only risking 2% this week. GBP/JPY pair only.

Cheers
Garfield.
Trading is SIMPLE not EASY.
  • #2,858
  • Aug 30, 2009 8:14pm Aug 30, 2009 8:14pm
Hi Ace

Are you just trading GJ and not EJ now?

DJ
  • #2,859
  • Aug 30, 2009 8:17pm Aug 30, 2009 8:17pm
wow fast moving market...already in trades for today looks like
  • #2,860
  • Aug 30, 2009 8:18pm Aug 30, 2009 8:18pm
Quoting davidjay
Hi Ace

Are you just trading GJ and not EJ now?

DJ
Yeah, GBP/JPY is the most profitable, so I don't trade EUR/JPY anymore.
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