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4H Box Breakout

  • #3,981
  • Sep 22, 2009 12:25am Sep 22, 2009 12:25am
To carry the thought regarding correlation a step further, I'm also not convinced that the box size has any correlation whatsoever to the potential TP's for the week.

As I see it, the 4H box serves one primary purpose, and that is just to establish a level to set your entries for the weeks. At times, it may also serve as an indication of trader sentiment for the week, but that's far from a sure thing.

Just to illustrate, as I remember it from back testing, all four trading weeks in January were winners, but check out the disparity in box size for the week as well as the maximum pip gain during each week . . .

Jan 5 Box Size: 154 Max Pips: 708

Jan 12 Box Size: 142 Max Pips: 647

Jan 19 Box Size: 209 Max Pips: 1517

Jan 26 Box Size: 254 Max Pips: 843

In other words, did the box size for those weeks have anything to do with figuring out your potential gain for those weeks? It doesn't appear so.

Is there a better way to figure targets? Maybe not, since nothing in trading is guaranteed. I'm considering experimenting with ATR based on a Weekly chart. Just for the sake of comparison, consider this . . . the Weekly ATR in January ran from a low of 1100 pips to a high of 1372 pips. Contrast that with September, which has run from a low of 502 pips to a high of 596 pips.

What does that tell you? Well, we already know the answer . . . the market was a LOT more volatile in January than it is right now. Wouldn't it seem reasonable that targets right now should be lower than they were in January?

I don't have a concrete answer to what the best solution is, but I thought I'd throw the subject out there so greater minds than mine could offer some suggestions.
Greetings from Guanajuato, Mexico
  • #3,982
  • Sep 22, 2009 12:34am Sep 22, 2009 12:34am
Quoting yen44x
Since I'm one of the main culprits, let me give you my 2 pips worth . . .

This thread has two weaknesses (3 if you count me). I'm referring to the thread, not the 4H Box Strategy itself.[indent]1. It's a weekly system. That, it and of itself, is going to limit true trade discussion. One enters on Monday and either wins or loses sometime during the week. Not much to discuss in the meantime. If anyone remembers the OzFX thread, there was a buzz every day when the new trade possibilities surfaced. There were options as to which trades...

Here Here yen you probably know my current situation, but could not leave this alone.
This is a “Set and Forget” system and if you have as much free time as YEN then it's bound to lead to mischief,

And might I add Yen's in put between the witty reportage and great google photo's is actually worth reading, so dig in and bear it folks


And no real trade talk required.

But the most amazing thing for me is where do you get blackberries this time of year

Must be a northern hemisphere thing
I do Good I feel GoodI do Bad I feel Bad
  • #3,983
  • Sep 22, 2009 1:02am Sep 22, 2009 1:02am
Quoting Success701
We need yours words.
Do you trade this week ? Thanks

 No estoy de acuerdo, mi amigo. Cuando somos niños, nuestros papas nos ensenó lo que necesitamos para tener exito en la vida. Si ellos nos ensenaron bien, como adultos no necesitamos pedir ayuda con cada decisión.

 En mi opinión, es iqual con que pasó con Ace. El estaba bien amable para enseñarnos está sistema. Pero, es una sistema muy básica. Podemos aprender rápidamente el método, y entonces no hay necesitad be recibir mas instrucciones de Ace.

 Es cierto que yo agradezco y respeto mucho la opinion de Ace, pero no es necesario cada semana. ¿Cómo ve?

 Disculpe mi falta de habilidad con Español. . . sigo aprendiendo poco a poco. ¡Buena suerte!
Greetings from Guanajuato, Mexico
  • #3,984
  • Sep 22, 2009 1:13am Sep 22, 2009 1:13am
Quoting Offshore
Here Here yen you probably know my current situation. And might I add Yen's in put between the witty reportage and great google photo's is actually worth reading, so dig in and bear it folks
Offshore . . . I do know your current situation because you sent me that pitiful photo, and although I appreciate the kind words, I have to say again . . . No, I'm not sending you money to get you out of the drunk tank.
Attached Image
Greetings from Guanajuato, Mexico
  • #3,985
  • Sep 22, 2009 1:27am Sep 22, 2009 1:27am
Quoting Offshore
Here Here yen you probably know my current situation, but could not leave this alone.This is a “Set and Forget” system and if you have as much free time as YEN then it's bound to lead to mischief,
Truer words were never uttered, old friend . . . mischief and me run in the same circles.

Quoting Offshore
But the most amazing thing for me is where do you get blackberries this time of year
Mexico is a fantastic place to live if you enjoy a huge variety of fruits and vegetables at dirt-cheap prices, but blackberries are nowhere to be found.

If anyone's coming down to visit the burros, I'd gladly throw in some extra time with Bonita for a kilo of blackberries.
Greetings from Guanajuato, Mexico
  • #3,986
  • Sep 22, 2009 2:00am Sep 22, 2009 2:00am
yep yen, box size has no correlation to stop loss nor take profit level.
nor not taking a 200 pip box.

that should have been obvious to anybody who puts a little bit of effort in this system, but sadly I dont think there are many who do.

ATR yen, definitely ATR
  • #3,987
  • Sep 22, 2009 2:07am Sep 22, 2009 2:07am
Quoting yonnie
yep yen, box size has no correlation to stop loss nor take profit level. nor not taking a 200 pip box. that should have been obvious to anybody who puts a little bit of effort in this system, but sadly I dont think there are many who do. ATR yen, definitely ATR
Yeah, I may be slow, but I eventually come around.

That's what happens when your mode of transportation is a burro.
Greetings from Guanajuato, Mexico
  • #3,988
  • Sep 22, 2009 2:14am Sep 22, 2009 2:14am
slow and steady yen, thats the word on the street.

better to have a bite out of something possible than go for something impossible........
  • #3,989
  • Sep 22, 2009 2:16am Sep 22, 2009 2:16am
Quoting yonnie
slow and steady yen, thats the word on the street.

better to have a bite out of something possible than go for something impossible........
Right you are . . . since I have another few days off this week due to the early exit, I'm going to be experimenting with some ATR ideas.

Are you already using it to help you establish targets?
Greetings from Guanajuato, Mexico
  • #3,990
  • Sep 22, 2009 2:57am Sep 22, 2009 2:57am
There is an interesting statistic on Wall Street.
• During the five years up to 31 December 1997 the NYSE gained 24.6%. this entire
profit was produced in just 40 days. Would you be able to predict which days they
were?
• In the 864 months between 1926 and 1997, where stocks averaged 10.4% per year,
61% of those months were profitable. Yet, if you took away the top 72 months – just 8%
of the total – your total return would have been zero. Removing 8% of the time
eliminates 100% of the profits.
• Even at the US Trading and Investing Championships, where top professionals trade
real money (their own), few succeed. Of 3,500 entries in one series of contestants, only
22% of entrants made any money at all. Only a handful managed to keep pace with or
exceed the S&P 500
Ordinary people Extraordinary Wealth – Ric Edelman
  • #3,991
  • Sep 22, 2009 2:59am Sep 22, 2009 2:59am
hence, it is completely reasonable to keep stop loss tight when trading break outs. probability of break out is smaller than that of contra move.
  • #3,992
  • Sep 22, 2009 3:37am Sep 22, 2009 3:37am
Quoting yen44x
I'm going to be experimenting with some ATR ideas. Are you already using it to help you establish targets?
no, I`m right where you are.

am thinking of aiming for 80-90% of 10-WATR, but have to backtest.
will also have a look at locking in first 100 or ? pips, as long as it doesn`t affect long-term performance.

come on guys, somebody out there must have most or all of the answers!
they probably dont want to spoil the fun
  • #3,993
  • Sep 22, 2009 3:46am Sep 22, 2009 3:46am
Quoting yen44x
Just to illustrate, as I remember it from back testing, all four trading weeks in January were winners, but check out the disparity in box size for the week as well as the maximum pip gain during each week . . .

Jan 5 Box Size: 154 Max Pips: 708

Jan 12 Box Size: 142 Max Pips: 647

Jan 19 Box Size: 209 Max Pips: 1517

Jan 26 Box Size: 254 Max Pips: 843

Yonnie, Yen, thanks for raising this subject and making things clearer. As a simplistic individual I'd always been concerned as to the degree of correlation between box size and SL/TP, and was not sure whether I'd missed it having been proved or misunderstood it. That is why I was more comfortable with fixed numbers or mean averages for SL and TP, together with a 1:2 R/R ratio, so it's interesting to see the development of SL to 30-40% of box now being taken a step further with Yonnie's 70 pip SL being moved to 20 after +50 progress to the trade. I also feel more comfortable with moving SL to BE when the trade has made 50% of the TP target, so am pleased at seeing this suggested.

Bal

Hail Kirkton
The dream will never die
  • #3,994
  • Sep 22, 2009 3:53am Sep 22, 2009 3:53am
brotyboy,

I do anything to please and I`m pretty sure Yen is not far behind, although as you know he IS slower
  • #3,995
  • Sep 22, 2009 4:00am Sep 22, 2009 4:00am
Quoting yonnie
brotyboy,

I do anything to please and I`m pretty sure Yen is not far behind, although as you know he IS slower

Yonnie. I thought it was the burros who do anything to please. And did you misstype Yen has a fat behind?

Bal
The dream will never die
  • #3,996
  • Sep 22, 2009 4:18am Sep 22, 2009 4:18am
Quoting yonnie
brotyboy,

I do anything to please and I`m pretty sure Yen is not far behind, although as you know he IS slower
Hey, I resemble that remark.
Greetings from Guanajuato, Mexico
  • #3,997
  • Sep 22, 2009 4:25am Sep 22, 2009 4:25am
Quoting Brotyboy
Yonnie. I thought it was the burros who do anything to please. Bal
Oh-oh, the secret's out.

Quoting Brotyboy
And did you misstype Yen has a fat behind?

Bal
Great line, Bal. My cheeks (front and rear) are quivering.

However, there's absolutely no truth to that rumor . . . BTW, did I show you the photos from my fishing trip?
Attached Image
Greetings from Guanajuato, Mexico
  • #3,998
  • Sep 22, 2009 4:55am Sep 22, 2009 4:55am
Quoting Ace284
Hope this helps
i don't understand what's the +/-20 what does it mean??????
  • #3,999
  • Sep 22, 2009 5:17am Sep 22, 2009 5:17am
Ace has a new system that is 3x as profitable as the one outlined in this thread.

Let`s just say that I wont give up until I find a similar system that is at least as good as Aces` new system and I will put all my energy into this goal.

Has anybody been keeping track of the profits so far in 2009 with the rule change of stop loss to BE after TP1 and exit at TP4 or end of week?

I would appreciate any help on my journey
  • #4,000
  • Sep 22, 2009 5:20am Sep 22, 2009 5:20am
Quoting MR.Yooo
i don't understand what's the +/-20 what does it mean??????
you can at least read post 1 loudmouth
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