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4H Box Breakout

  • #3,961
  • Sep 21, 2009 6:21pm Sep 21, 2009 6:21pm
Pharoah,

I`m not referring here to the original rules of having a stop loss of 100% of the box size.

I am referring to your alternative SL of 15-30% of the box size and yen`s 30-40% of the box size as the stop loss be it in ranging or trending conditions.

I believe that even Ace is trialling a considerably reduced stop loss size in the order of 45-50 pips.

From my own observations, a 100% box SL is completely unnecessary and wasteful.
  • #3,962
  • Sep 21, 2009 6:29pm Sep 21, 2009 6:29pm
Quoting yonnie
Pharoah,

I`m not referring here to the original rules of having a stop loss of 100% of the box size.

I am referring to your alternative SL of 15-30% of the box size and yen`s 30-40% of the box size as the stop loss be it in ranging or trending conditions.

I believe that even Ace is trialling a considerably reduced stop loss size in the order of 45-50 pips.

From my own observations, a 100% box SL is completely unnecessary and wasteful.
I think you're confused as to what my actual suggestion was for a different exit/stoploss strategy, mine has nothing to do with box size at all, Yens 30-40% is only in testing phase's thus far. No matter how you look at it right now, both of these exit/stoploss methods have saved both yen, myself, and those that follow our variations of the breakout system alot of pips over the past few weeks.

I for one know that Yen keeps detailed records, and I have ALOT of research into my system. My system has been modified to correspond with Ace's entry system, and can be modified to many other systems.
  • #3,963
  • Edited 6:59pm Sep 21, 2009 6:40pm | Edited 6:59pm
alright, alright, must admit I haven`t looked at your SL scenario at all, just that I saw some percentages thrown around from memory........

So my question is then aimed just for Yen, `cos he uses a percentage of the box as the stop loss.

for Yen ONLY: did you backtest for a considerable period before using 30-40% of the box size or it this a forward test like Pharoah says?

the only problem with forward testing with real money is that people will lose real money if they dont do their homework first through backtesting. SL of 40 pips is too small.

I for one am still in the trade.

thanks

btw: have not used 100% SL for a long time after a lot of research as well.
  • #3,964
  • Sep 21, 2009 6:43pm Sep 21, 2009 6:43pm
Quoting garfield75
Just to keep it simple in calculation using this method if I enter 3 full lots long on G/J @ 150.00 with TP1 at 150.25, TP2 at 150.50 and TP3 at 150.75 all three TP hits.

My reporting method is :-

Position 1 25 pips = $250
Position 2 50 pips = $500
Position 3 75 pips = $750
Total = 150 Pips = $1500.00

To keeping clean for tracking, analysis and reporting.

Using the above exmaple reporting only 75 pips = $750 profit using non-cumulative is not correct in my point of view, I am sure tax guys won't like it either ;-)

Cheers
Garfield

I tried it his week and it worked. I used a 50 pip stop loss with each lot.
Have any one else tried it.

I risked 150 pips total.

Using fxcm my high was 148.67 low was 148.07. That made the range 60.

Of course this is a micro account.

Still in the learning stages.
  • #3,965
  • Sep 21, 2009 8:32pm Sep 21, 2009 8:32pm
Hi,

In my side, I continue to apply Ace Rule, as it is a 4h hour classic break-out, that need a large stop loss. The market doesn't care about the number of pip's losses we'll desire.. it has to express himself

So regarding about Ace Rules, about this Treadwith some Statistic and a set up of a member here, I apply this : this set-up makes me win some pips last week instead of loss everything.

I take True Range 4h + buffer of 20 + spread of 3 in each side.

I enter in the market with two pos each time at the signal ,
each pos have the same size..
As soon as Tp1 is touch, I take the profit of one and let run the other for tp3.. and bring back its SL to BE + buffer
(we could imagine three same entries and 2 taking tp1 profit.).


so, this week, W39
- enter long at 148.910, SL 148.049 . TP1 149.541. for two same trade.
- Tp1 has been touched, so I take 63 pips profit on one trade
- I bring back the SL of the other to 147.849 ( 148.910 -buffer 20).
it is for the moment +5 pips..profit but going down.

And I'm still in demo mode for this set-up.


, and scuse me if I drowsy you with my bad english..
  • #3,966
  • Edited 9:09pm Sep 21, 2009 8:47pm | Edited 9:09pm
Quoting Scanner
Hi,

In my side, I continue to apply Ace Rule, as it is a 4h hour classic break-out, that need a large stop loss. The market doesn't care about the number of pip's losses we'll desire.. it has to express himself
Scanner,

From backtesting Aces` system I know that his system does NOT need a large stop loss.
It has nothing to do what I desire, but everything what the market is telling me.

I`m always willing to learn, so perhaps you can tell me where you get your figures from that tells you this system needs a 100-200 pips stop loss.

In your demo test you take 1 trade off at 63 pips = TP1.
If you are trading Aces` system, TP1 is around 100 pips.

Please dont get us all confused!?!
  • #3,967
  • Sep 21, 2009 9:08pm Sep 21, 2009 9:08pm
Quoting yonnie
So my question is then aimed just for Yen, `cos he uses a percentage of the box as the stop loss. for Yen ONLY: did you backtest for a considerable period before using 30-40% of the box size or it this a forward test like Pharoah says? SL of 40 pips is too small
I think maybe you didn't keep up with the thread, Yonnie, because these questions were addressed in some of my previous posts.

In short, yes, I did back testing for all of 2009, and did it on M30 charts to get a better idea of what was really happening during the H4 candle. Admittedly, that's not much time but it was enough to convince me to try forward testing.

I mentioned in past posts as well that a percentage basis could easily be replaced by a SL in the neighborhood of 50-70 pips for those interested in handling it that way. As time goes on, that's probably what I will lean toward.

Regarding your statement that a SL of 40 pips is too small . . . did you do back testing to verify that before making the statement? If you have, by all means feel free to share what you feel would be a better idea. I've stated all along that this is an experiment, it might not work, it might not be a good idea, but I felt it was worth further testing and that I would share the results here on the thread, good or bad. With rare exception, I've posted my results each week since I started on the thread.

Here's what I know for sure, and I don't mean this to sound adversarial, but simply a statement of fact . . . if we traded the same amount of lots during this several week losing streak, you've lost more than me simply because your SL is higher. However, when there's a winning week, our profit will be exactly the same if (and this is a big IF) we've each set a SL that allows us to stay in the trade. I think that's the "secret formula" we're all seeking . . . what's the ideal SL that will allow us to minimize our losses during ranging weeks while still allowing us to stay in the trade during winning weeks.
Greetings from Guanajuato, Mexico
  • #3,968
  • Sep 21, 2009 9:10pm Sep 21, 2009 9:10pm
Quoting yonnie
From backtesting Aces` system I know that his system does NOT need a large stop loss. It has nothing to do what I desire, but everything what the market is telling me.
Bingo . . . I couldn't agree more. Any basic back testing should be enough to convince a trader of that.
Greetings from Guanajuato, Mexico
  • #3,969
  • Sep 21, 2009 9:19pm Sep 21, 2009 9:19pm
Quoting yen44x
Bingo . . . I couldn't agree more. Any basic back testing should be enough to convince a trader of that.
Exactly, my system generally opens a trade with an approx 50% box stoploss, from there it closes in on BE, in the semi rare case, a trade will open with a stoploss of 100+% of the box size, however, on the next bar open, that stoploss has been tugged all the way to 50% or less.. There is no need, even for more than 4 hours, to have a stoploss of any larger than 50% IMO. But that's just my 2 and a half pips.
  • #3,970
  • Sep 21, 2009 10:02pm Sep 21, 2009 10:02pm
Yen,

I was actually asking if in your backtesting you found a correlation between box size and stop loss, seeing that for the moment you use a percentage of the box size?
  • #3,971
  • Sep 21, 2009 10:05pm Sep 21, 2009 10:05pm
Where's Ace...
  • #3,972
  • Sep 21, 2009 10:11pm Sep 21, 2009 10:11pm
Quoting Pharoah
10/10 the price breaks out of the box
4/10 stays out of the box
2/10 retrace all the way to other side of the box
4/10 don't retrace the full box size (but rarely goes 50%+ box size)
This is just a rough estimate, but I believe it is fairly accurate.
From your extensive research Pharoah, does this mean on average 40% wins, 40% BE and 20% losses?
  • #3,973
  • Sep 21, 2009 10:17pm Sep 21, 2009 10:17pm
Quoting yonnie
Scanner,
In your demo test you take 1 trade off at 63 pips = TP1.
If you are trading Aces` system, TP1 is around 100 pips.

Please dont get us all confused!?!
Sorry about That Yonnie, you're right about the box.

Two weeks ago, as I've seen that we were in horizontal range , I'vd modified my excel tables like that : TP 1 = (long+ 1 range) instead of (long+1 Box), and so on TP2,TP,TP4

So my tp are x range and not x Box for the moment. My idea was to coming back to the Box size as soon as a trend would come back.


About the SL, my personnal look on the forex is, since long time, that Instead reduce my SL by two in hight volatility period, I prefer multiplied it x 2 , reduce my position by four, and making trade for my three others quaters pos on three others pairs.

I'm going to thinking about that as Pharoah, Yenx and some others are thinking like you.
Again apologies for my size box witch at the moment is not the original size.

Attached File(s)
File Type: xls W39 - ACE284-V03.xls   58 KB | 739 downloads
  • #3,974
  • Sep 21, 2009 10:27pm Sep 21, 2009 10:27pm
Yen,

I wouldn`t want to be stopped out for a lousy 10-30 pips extra.

Think about it: how many times can you afford an extra 10-30 pips if one week you take away 500 pips because of your slightly larger SL?

I would make damn sure that almost all those weeks where the price goes back into the box and break out again in the same direction will be covered by my SL.

What do you say
  • #3,975
  • Sep 21, 2009 10:28pm Sep 21, 2009 10:28pm
Quoting yonnie
Yen, I was actually asking if in your backtesting you found a correlation between box size and stop loss, seeing that for the moment you use a percentage of the box size?
Darn, I hate when I give a long-winded reply and then find out I didn't understand the question.

In short, the answer is No. This all started as a response to others who suggested a 50% SL, a 15% SL, and so on. I simply came up with another percentage and then back tested to see how it would perform.

I personally don't see where the box size has much correlation with what the SL would be. That's why I mentioned I will probably gravitate toward a fixed SL (50-70 pips) rather than a percentage.

What SL range have you found that you feel comfortable with?
Greetings from Guanajuato, Mexico
  • #3,976
  • Sep 21, 2009 10:50pm Sep 21, 2009 10:50pm
We need yours words.
Do you trade this week ?

Thanks
  • #3,977
  • Sep 21, 2009 10:57pm Sep 21, 2009 10:57pm
Quoting yonnie
Yen, I wouldn`t want to be stopped out for a lousy 10-30 pips extra. Think about it: how many times can you afford an extra 10-30 pips if one week you take away 500 pips because of your slightly larger SL? I would make damn sure that almost all those weeks where the price goes back into the box and break out again in the same direction will be covered by my SL. What do you say
Sorry, I missed this post, but think the answers were included in the previous two posts.
Greetings from Guanajuato, Mexico
  • #3,978
  • Sep 21, 2009 10:59pm Sep 21, 2009 10:59pm
Quoting yonnie
From your extensive research Pharoah, does this mean on average 40% wins, 40% BE and 20% losses?
Approximately, it's known the system has an approx 40% win rate, and my personal tests using my own system (which uses less than a 100% stoploss) with a total % loss of 68, a good 70% of that 68% was a $2 loss or less because of the lack of my conditional rules 2 of my system in the EA I was backtesting with.

With my additional rules, I expect somewhere around a 55%+ win rate (because trades won't be opened than immediately closed thereafter because the Red MA is past BE on trade open (read conditional rules 2 of my system, and you'll see why this is a VERY important function.

Like I stated in my post in which you replied, what I stated was an approximate, not an exact.
  • #3,979
  • Sep 21, 2009 11:00pm Sep 21, 2009 11:00pm
Yen,

according to my back test no correlation existed, but I still valued your opinion because you might not believe this, but I`m human and I do make mistakes........

for the moment I`m using a 70 pip initial SL and I believe that is the most dangerous period in the trade.
once the trade is 50 pips in profit, I raise my SL to 20 pips and to BE at 100 pips.

this weeks trade should have been stopped out at -20 pips, but I did not feel good about it and sold at my entry price.

might be the wrong move; only time will tell.
  • #3,980
  • Sep 21, 2009 11:08pm Sep 21, 2009 11:08pm
Quoting yonnie
Yen, according to my back test no correlation existed, but I still valued your opinion because you might not believe this, but I`m human and I do make mistakes........ for the moment I`m using a 70 pip initial SL and I believe that is the most dangerous period in the trade. once the trade is 50 pips in profit, I raise my SL to 20 pips and to BE at 100 pips.
I heard rumors you were human, my friend, but I didn't want to repeat them until you personally confirmed it.

I think your trading plan is excellent . . . that SL will keep you in virtually any winning trade while minimizing risk.
Greetings from Guanajuato, Mexico
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