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4H Box Breakout

  • #3,341
  • Edited 11:26am Sep 6, 2009 11:21am | Edited 11:26am
Quoting yonnie
I`ll worry about next year when next year comes.

I believe in trading now with parameters that fit our trading now and adapt to a change in the dynamics of the market when they come.

That`s why I said earlier in a post that people who dont put in a lot of work (in other words keeping track of where the market is going) will not make it.

Oh, just see your post.....I`ll have a look, thanks.
I tend to agree although I think back testing can reveal some interesting patterns. But let's face it there aren't a lot of options- the market basically ranges or trends. When it's ranging and doesn't offer sustained breakouts then it's good to have a couple of other methods in your pocket for trading. Another option is to test this method with other pairs that have an opposite correlation to GJ. I haven't looked into this but it might offer some opportunities. But I basically trade what I see.

Sandy
  • #3,342
  • Edited 11:36am Sep 6, 2009 11:24am | Edited 11:36am
Quoting Pharoah
I know, but this is why I suggest backtesting long before jan 2009 til now, because it shows you the variety of market conditions, and gives you a very good idea of how to react to them in the future.
yeah, you`re right.......people have to realize it wont stay like this forever till the day they die.
  • #3,343
  • Sep 6, 2009 11:25am Sep 6, 2009 11:25am
Quoting yonnie
TP4:

after we find the best SL for the current trading, I feel we should then start to pay attention to the profit taking.

imo we leave far too much profit on the table if price goes up/down 1000 pips and we leave the battle field with 550 pips.

is there a better way?
Yes the exit is the problem. There are many pips left on the table. This week I'm going to use a jumping stop of 100 pips or the box size, whichever is smaller. This is way outside Ace's method. But when looking at Danno's data I saw some very nice max pip totals that I think a jumping stop could capture. And if stopped out I'll evaluate whether a re entry in the same direction is warranted.

Sandy
  • #3,344
  • Sep 6, 2009 11:34am Sep 6, 2009 11:34am
could you explain the jumping stop? thanks
  • #3,345
  • Sep 6, 2009 11:50am Sep 6, 2009 11:50am
Quoting yonnie
could you explain the jumping stop? thanks
if I'm not mistaken I think this is what he means.

if (box size >= 100 pips) then SL= 100 pips

otherwise if (box size < 100 pips) then SL = Box size.

nubchai, please confirm.
Don't look down when learning to fly.
  • #3,346
  • Sep 6, 2009 11:50am Sep 6, 2009 11:50am
Quoting yonnie
could you explain the jumping stop? thanks
I use the Hopwood trade manager but I'm sure there are others http://www.forexfactory.com/showthread.php?t=89371

My trade plan for this week is to enter pending trades according to Ace's rules. When the trade that triggers hits 100 pips (not TP1) I will close 1/2 the position. The remainder I will set to BE+20 and use a jumping stop of 100 or the box size, whichever is smaller.

The jumping stop will trigger first when the trade moves to 100 pips profit. It will close 1/2 the position and set the SL for the remainder to BE+20.

After that for every 100 pips the trade advances the EA moves the stop 100 pips higher (or lower). So I don't have to babysit the trade.

What ends the trade is being stopped out. Again whe that happens I'll look at whether reentry is warranted.

Sandy
  • #3,347
  • Sep 6, 2009 12:23pm Sep 6, 2009 12:23pm
Quoting yonnie
I got figures for the stop loss here for the period 22Feb till 14 June 2009, only on the first trade each week.

the highest retracement into the box was 58 pips in that period, but you have to add your spread if you add the spread to your box.
Quoting yonnie
yen, the maximum stop loss of 58 pips in that period is the initial stop loss for every first trade taken in that period, be it winner, BE or loser in the end.
Yonnie . . . it's probably just a lack of coffee, or tequila, or something, but I'm not following that explanation. Obviously, every loss during that time not only went 58 pips into the box, but went all the way to the other end of the box.

What am I missing (besides good looks, intelligence, etc.)?
Greetings from Guanajuato, Mexico
  • #3,348
  • Sep 6, 2009 1:13pm Sep 6, 2009 1:13pm
I mentioned earlier my trading plan for this week, which will consist of the following:

30% SL

2 Lots, 1 with a target of TP1 or 100 pips (still working on that), and the other will basically follow Danno96's suggestions of moving to TP1 if price reaches TP2 and moving to TP3 if price reaches TP4. However, I will not move the trade to BE at TP1.

Please remember that I said this will be an experiment on a demo account. I don't know if it will work, but that's the whole point of the experiment.

I did do some back testing over the weekend that covered the 35 weeks so far this year. Here's some general observations . . .

The bad news first . . .

The 30% SL would have knocked me out of 4 huge winning trades so far this year. Here's a summary:

Week of Jan 26-This week had a 254-pip box. By current rules, it would be a non-trading week. However, I included it in the back test. As far I can see, the Long trade would have been triggered by 1 pip before heading to -189 pips. Finally, it turned around and ended up at 700+ pips. Anyone with a stop loss less than 80% would have been knocked out of this trade.

Week of Feb 9-This week there was a 260-pip box, again a non-trading week by official rules. This trade went to -240 before turning around and ending up at 500+ pips. Obviously, a 100% SL would be required to survive that retrace, but honestly, how many would have stuck to the trade when you're down by 200 pips? If you would, you deserve the steel cajones award!

Week of March 30-This trade went to -123 (with a 139 pip box), so a 100% SL would have been needed to stay in the trade. This TP4 trade would have netted you over 500 pips.

Week of June 15-This trade also went to TP4 if you were trading a 100% SL. The trade only went to -51, which would have knocked me out at 30% SL but anyone with a SL of 50% or more would have won this trade.

Sounds pretty gloom so far for a reduced SL %, eh?

Here's the good news . . .

The average loss for a 100% SL trade was 144.6 pips. On the other hand, the average loss at 30% SL was only 45.7 pips, a huge difference. My observation is a trader will lose more often with a 30% SL, but a lot of ground will be made up on losing trades, which comprise the majority of our trades on this system.

Some additional observations . . .

I counted 48 trades in the 35-week period. So, 13 weeks had two trades and 22 weeks had a single trade. I counted only 1 winning trade among those 13 second trades. For me, that's a huge turnaround, because I was confident before doing any testing that second trades must be reasonably successful.

So, if you don't want to experiment with a reduced SL, you might do well just to trade once a week, as others have suggested.

Secondly, another tweak you may want to try is trading 2 lots and closing one at TP1 or 100 pips. I've been doing this for several weeks already in real-time and it has worked out well, and the back testing only made me more confident that it's a good strategy.

The combination of the 30% SL and closing 1 lot at TP1 (or 100 pips if you prefer) allowed this strategy to compare very favorably with the traditional method. Of course, 35 weeks of back testing is hardly conclusive, but it at least gives me some confidence to move forward with the experiment.
Greetings from Guanajuato, Mexico
  • #3,349
  • Sep 6, 2009 1:21pm Sep 6, 2009 1:21pm
btw where is ace? i have been eagerly awaiting his new variation all weekend
  • #3,350
  • Sep 6, 2009 1:25pm Sep 6, 2009 1:25pm
Quoting ledobedo
btw where is ace? i have been eagerly awaiting his new variation all weekend
I think he's just layin low for the weekend, taking it easy, last week was a painful week.
  • #3,351
  • Sep 6, 2009 1:26pm Sep 6, 2009 1:26pm
Quoting Bobcat2
It's a holiday weekend...the beginning of the college football season...the forex market has been closed for a day and won't reopen for another day...and yet, there are currently 43 traders anxiously awaiting the arrival of Ace's new trading system!

I hear you bobcat . . . I'm perfectly happy here in Mexico, but finding a football game here on TV is pretty much out.

The Super Bowl was broadcast here, which is great news. The bad news, considering I'm a native English speaker was that the game was broadcast entirely in Spanish.

Imagine my excitement when I heard “Que clasico de Heinz Ward . . . touchdown para ‘Los Acereros’ (Spanish for the Steelers) . . . que control de su cuerpo . . . maravilloso . . . todos se celebran en el end zone!!!” or something to that effect.
Greetings from Guanajuato, Mexico
  • #3,352
  • Sep 6, 2009 1:34pm Sep 6, 2009 1:34pm
Quoting yen44x
The average loss for a 100% SL trade was 144.6 pips. On the other hand, the average loss at 30% SL was only 45.7 pips, a huge difference.
There is no system looking at the chart.. Just shoot buy or sell with

200 SL and 200 TP and you might get more profit than loses..

Why wait 1 week for that particular candle? This is just nuts..

Nothing special about that.. Scroll your chart to left.. I don' see

anything special.. You can choose any other candle as well

and play the same way.. Take H4 TF 4:00 GTM candle for example,

(Daily), don't have to wait several days at least.. Check 4:00 GTM

looks even better on my chart with the smaller TP

Check those Blue vertical lines:
Attached Image (click to enlarge)
Click to Enlarge Name: 4h-box02.gif Size: 23 KB
Viewer Discretion Advised: Shall we shag now or should we shag later? :-)
  • #3,353
  • Sep 6, 2009 1:38pm Sep 6, 2009 1:38pm
Quoting Pharoah
I think he's just layin low for the weekend, taking it easy, last week was a painful week.
hopefully this week is gonna be joyfull as it is my first week going with this system live..guess i ll use the original method with few tweaks i picked up on this thread
  • #3,354
  • Sep 6, 2009 1:39pm Sep 6, 2009 1:39pm
Quoting SkyzerFX
So, you actually have to wait a week to get look:

Am I missing something? How this could be called "System" I just scrolled to the left probability is about 50/50, might as well just flip the coin.. Wait a week for 1 trade which is going wrong way?
Quoting SkyzerFX
There is no system looking at the chart..

Why wait 1 week for that particular candle? This is just nuts..
Your second post is basically a repeat of the first. If you don't like the system, why make yourself miserable by being here? There are hundreds of systems listed on FF . . . go play with one you like. I happen to like this one.
Greetings from Guanajuato, Mexico
  • #3,355
  • Sep 6, 2009 1:42pm Sep 6, 2009 1:42pm
Quoting yen44x
Your second post is basically a repeat of the first. If you don't like the system, why make yourself miserable by being here? There are hundreds of systems listed on FF . . . go play with one you like. I happen to like this one.
Exactly, the whole point of this system is to remove the glue from your face.

This exact system can be done on 1H breakout, 4H breakout, 1D Breakout, 1W Breakout, 1M breakout, but seriously, who wants to sit there watching the screen for the 1H breakout, and who wants to wait longer than a week, this is the perfect balance between good profits, and time spent in front of the screen.
  • #3,356
  • Sep 6, 2009 2:12pm Sep 6, 2009 2:12pm
Quoting Pharoah
Exactly, the whole point of this system is to remove the glue from your face.

This exact system can be done on 1H breakout, 4H breakout, 1D Breakout, 1W Breakout, 1M breakout, but seriously, who wants to sit there watching the screen for the 1H breakout, and who wants to wait longer than a week, this is the perfect balance between good profits, and time spent in front of the screen.
Careful what you say, Pharoah. You know now it's just a matter of time before someone asks how to trade this system on the 1M chart.
Greetings from Guanajuato, Mexico
  • #3,357
  • Sep 6, 2009 2:15pm Sep 6, 2009 2:15pm
Quoting yen44x
Careful what you say, Pharoah. You know now it's just a matter of time before someone asks how to trade this system on the 1M chart.
lol no kidding, unfortunately, anything less than the 1H chart is too random, can't really rely on a breakout of a 1M bar, or a 5M bar lol
  • #3,358
  • Sep 6, 2009 3:00pm Sep 6, 2009 3:00pm
Quoting bar
they' e fu kin everywhere, like a plague. They think they have the aces
You're definitely right, they are everywhere like the plague. They even create new profiles on FF with a turtle as their display picture and decide to post on this thread.

Guys meet bar/Jahual, he's one of the ebay sellers I was taking about. He's already been banned off FF before, and will be banned again in a while.

These guys are floating around everywhere...
  • #3,359
  • Sep 6, 2009 3:02pm Sep 6, 2009 3:02pm
Quoting Ace284
You're definitely right, they are everywhere like the plague. They even create new profiles on FF with a turtle as their display picture and decide to post on this thread.

Guys meet bar/Jahual, he's one of the ebay sellers I was taking about. He's already been banned off FF before, and will be banned again in a while.

These guys are floating around everywhere...
ROFL nice Ace
  • #3,360
  • Sep 6, 2009 3:04pm Sep 6, 2009 3:04pm
Although there are unscrupulous individuals trying to sell this system or promote this system as their own on other websites, they are still missing a key component inherent to this thread. There are several individuals who've taken the time to engage in very maticulous backtesting scenarios. This in-turn often sparks a new idea for potential improvement. This new idea is then backtested in detail and shared. The shared results will then spark another new twist that is then backtested and shared.

The continuous collegial "think tank" emperical studies shared and built upon simply cannot be replicated anywhere else.

In essence, a BIG KUDOS TO EVERYONE WHO HAVE DILIGENTLY GONE THRU VARIOUS BACKTESTING AND SHARED THAT; AND A BIG KUDOS TO EVERYONE WHO'S TAKEN BACKTESTED INFORMTION AND BUILT UPON IT WITH YOUR BACKTESTED VARIATION AND SHARED...

THIS IS WHAT MAKES THIS THREAD SO SPECIAL & UNIQUE...

Walt
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