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4H Breakout With Custom Stop Loss

  • #121
  • Sep 21, 2009 11:51am Sep 21, 2009 11:51am
Quoting Limstylz
You are either avoiding my question, or you don't understand what I am trying to say here.

I do not doubt your back test results. What I want you to explain is why you are using the periods and shift? Did you wake up one morning having had a dream about 2SMMA and shift 3 (or whatever)?

Did someone tell you 'use period 2 SMA on H4... it's really profitable!'

OR...

Do your MA's and shift settings have some hard mathematical or statistical background?
I don't think I understand what you are asking, I understand your asking how I came up with these settings, and in every post, I've stated how I came up with these settings.

My stoploss system was not designed with this particular entry system in mind. My stoploss system was devised from months of testing it with various entry system both breakout and trending. I assigned 2 MA's with the settings I have put forth because of the actual results I have seen, as stated in one of my previous post's on the first page of the thread. This was after using various settings in realtime in conjunction with this particular entry system, these settings produced the most impressive results.

I'm not sure if this answers your question, or if you want every piece of documentation and research as to why I chose these settings.

IMO how I came up with these settings are unimportant. How the system is used is the only important part.

In short, they produce better results than Ace's original 4H breakout system, less drawdown. And out of all the settings I have tested these produce the best out of them. Hope that answers the question, otherwise your SOL because this is the only way I can answer your question without forking over months worth of research and data.
  • #122
  • Sep 21, 2009 11:58am Sep 21, 2009 11:58am
or is the "Months of research and data" the answer you were looking for lol.
  • #123
  • Sep 21, 2009 12:01pm Sep 21, 2009 12:01pm
Yes, I see. Your settings are based on a period (you mention months) of testing and there is no mathematical or statistical reason for the settings you chose.

Out of interest, what was your sample period and how many settings did you actually test? Did you test the other MA settings for the same sample period? Did you also do an out-of-sample test for the various settings you tested?

I am just trying to get a measure of your testing methods and how you actually 'design' your systems. There is no malice intended.
  • #124
  • Sep 21, 2009 12:10pm Sep 21, 2009 12:10pm
Quoting Limstylz
How does this explain why the op is using a Period 2 SMMA (or if you like... 3 EMA) and the shift settings? How is your comment helpful?
1. it's not about shift
2. it's not about being helpful to you or not, not about your issue and not addressed to you
3. this is about smma and ema
  • #125
  • Sep 21, 2009 12:15pm Sep 21, 2009 12:15pm
Quoting Limstylz
Yes, I see. Your settings are based on a period (you mention months) of testing and there is no mathematical or statistical reason for the settings you chose.

Out of interest, what was your sample period and how many settings did you actually test? Did you test the other MA settings for the same sample period? Did you also do an out-of-sample test for the various settings you tested?

I am just trying to get a measure of your testing methods and how you actually 'design' your systems. There is no malice intended.
No no, completely understandable, you just want to know how I devised this system, that's fine.

What I do to test a system and settings is I choose an amount of time to work (in most cases, backtesting, because you can't redo live weeks with different settings, my live tests week to week just help assert my belief in the backtesting results).

In this systems case, I used a 8 month timeframe, from jan 01/09 until Aug 21/09 and I ran backtesting for various settings. I ALWAYS use the EXACT same timeframe to backtest in, and I ALWAYS use the same broker to compare settings results.

I'm not a spuratic system maker, I don't look at something and create a system that "looks" good, I do the math, I work out the statistcal information, drawdown, average winning trade in pip and $$ value. I have my own reasons as to why I am not releasing all of this backtest information. But from all of my testings, these settings have produced the largest gains with the least drawdown. And when in conjunction with my conditional rules 2 (when applied) and hedging (when allowed) the drawdown would be reduced even more (which automatically increases the net profit by reducing the Gross loss)

I hope that helps you understand my methods.

As for the other question about how many different settings I have testing, I've tested many many settings, most certainly not all of them, FAR too many combo's as there are 8 options to change in total, but I have run through 20 or so various settings, ranging from 1 period to 3 period for the BE MA(Red) and 1-3 Shift, and from 1-3 period for the TP MA (Black) shift 4-6 with a various methods and apply to functions, this is also where I came up with the Smooth MA vs the others.
  • #126
  • Sep 21, 2009 12:35pm Sep 21, 2009 12:35pm
Thanks for taking the time to respond. It is much appreciated.
  • #127
  • Sep 21, 2009 12:40pm Sep 21, 2009 12:40pm
Quoting Limstylz
Thanks for taking the time to respond. It is much appreciated.
No problem, sorry it took so long for me to get what you were asking lol
  • #128
  • Sep 25, 2009 6:06pm Sep 25, 2009 6:06pm
Hi,

Just subscribing to follow up later

  • #129
  • Sep 25, 2009 6:11pm Sep 25, 2009 6:11pm
Quoting andante9
Hi,

Just subscribing to follow up later

I'm going to be continuing with this thread again shortly, have been very busy devising a loss prevention system for ranging weeks. And I've done it, re-read original post, it now includes to close half position at TP1. This when combined with my Smart Stop system is deadly (TO THE BANKERS!!!!!)

This system is a very stress free system. Prone to heart attacks caused by stress? No problem, this system is for you!

From my studies, I have gathered this information.

Market Condition that WILL hurt my system (the list in much longer with what won't hurt my system)

1. Flat Line --------------------------------------------------------------------------------------------
  • #130
  • Sep 25, 2009 7:40pm Sep 25, 2009 7:40pm
Quoting Pharoah
I'm going to be continuing with this thread again shortly, have been very busy devising a loss prevention system for ranging weeks. And I've done it, re-read original post, it now includes to close half position at TP1. This when combined with my Smart Stop system is deadly (TO THE BANKERS!!!!!)
Hey Pharaoh . . . I'll be doing like Andante and checking the thread over the weekend. No doubt I'll be compiling some questions to ask you, so get prepared . . . your thread's about to be invaded by Google photos.
Greetings from Guanajuato, Mexico
  • #131
  • Sep 25, 2009 7:41pm Sep 25, 2009 7:41pm
Quoting yen44x
Hey Pharaoh . . . I'll be doing like Andante and checking the thread over the weekend. No doubt I'll be compiling some questions to ask you, so get prepared . . . your thread's about to be invaded by Google photos.
That's ok yen, I dun mind, I keep the first post updated with the latest improvements anyway.
  • #132
  • Sep 25, 2009 7:42pm Sep 25, 2009 7:42pm
One question comes to mind right off the bat . . . why the need for two conditions? In other words, how does a trader benefit from each? Thanks.
Greetings from Guanajuato, Mexico
  • #133
  • Sep 25, 2009 7:46pm Sep 25, 2009 7:46pm
Quoting yen44x
One question comes to mind right off the bat . . . why the need for two conditions? In other words, how does a trader benefit from each? Thanks.
Because, in one condition, the MA's are in the right places to be stoplosses, in the other they are in the profit zone, and cannot be stoplosses, this can leave a trade open to no stoploss at all.
  • #134
  • Sep 25, 2009 7:50pm Sep 25, 2009 7:50pm
thanks Pharoah i like this tweeking you've done here wathcing with interest.
I do Good I feel GoodI do Bad I feel Bad
  • #135
  • Sep 25, 2009 7:53pm Sep 25, 2009 7:53pm
And one suggestion also comes to mind right off the bat . . . Why don't you can this thread and start it again under another name? You're calling it the SmartStop System now, which is catchy and would cause the average trader to at least take a look. Rather than marrying it completely to the 4H Box System, you could "market" it as a great tool for any trader who doesn't know when to close a trade at the optimal point (that would include about 99% of traders).

The reason I'm suggesting is your thread already has two strikes against it . . . it starts with a discussion about your violation warning, which is boring, and then you had the additional misfortune of starting it when the 4H Box System was going through an extremely rough patch.

I guess my marketing background is re-surfacing, but anyway I thought I'd mention it to you. There's nothing worse than a potentially good thread that never gets off the ground.
Greetings from Guanajuato, Mexico
  • #136
  • Sep 25, 2009 7:56pm Sep 25, 2009 7:56pm
Quoting Offshore
thanks Pharoah i like this tweeking you've done here wathcing with interest.
No worries , I gained a large amount of my knowledge from you fine folks, so why not share
  • #137
  • Sep 25, 2009 7:59pm Sep 25, 2009 7:59pm
Quoting Pharoah
Because, in one condition, the MA's are in the right places to be stoplosses, in the other they are in the profit zone, and cannot be stoplosses, this can leave a trade open to no stoploss at all.
This is what caused me to delay getting into this thread previously . . . I just don't fully understand your instructions that define the system.

For example, here's the rules for a Sell on Condition 1:

Sell: If a sell occurs and both the RED MA and the BLACK MA are above the Low (not including buffer) of the first 4H bar of the week.

And, here's the rules for a Sell on Condition 2:

Sell: If a sell occurs and both the RED MA and the BLACK MA are below the Low (not including buffer) of the first 4H bar of the week.

I understand that part, but then Condition 1 call for a set stop loss, Condition 2 calls for a trailing stop loss.

If these rules are for opening a trade, how can one be in the "profit zone"? Maybe I'm just not following the explanation.
Greetings from Guanajuato, Mexico
  • #138
  • Sep 25, 2009 8:05pm Sep 25, 2009 8:05pm
Quoting yen44x
And one suggestion also comes to mind right off the bat . . . Why don't you can this thread and start it again under another name? You're calling it the SmartStop System now, which is catchy and would cause the average trader to at least take a look. Rather than marrying it completely to the 4H Box System, you could "market" it as a great tool for any trader who doesn't know when to close a trade at the optimal point (that would include about 99% of traders).

The reason I'm suggesting is your thread already has two strikes against it . . ....
Yeah, I was more or less thinking the exact same thing. kinda wanted to let it fall to the pages of history, and start a newer one after that with at least some backtests and what not, this system is definitely dynomite, but got off to a crappy start, due to me not including the partial take profit at TP1, if I had included that in the original outline the system would have survived that string of losses with profit in the bank to show for it.

I will be creating a new thread tho, and as a result, I will be closing this thread from new posts to let if fall away in the pages. So everyone, test out this method if you wish, if it works for you (which I'm sure it will) fantastic.

This thread will NOT be closed until after the new thread has been opened, so fire away with the questions and/or comments (only constructive crit welcome)
  • #139
  • Sep 25, 2009 8:08pm Sep 25, 2009 8:08pm
Quoting yen44x
This is what caused me to delay getting into this thread previously . . . I just don't fully understand your instructions that define the system.

For example, here's the rules for a Sell on Condition 1:

Sell: If a sell occurs and both the RED MA and the BLACK MA are above the Low (not including buffer) of the first 4H bar of the week.

And, here's the rules for a Sell on Condition 2:

Sell: If a sell occurs and both the RED MA and the BLACK MA are below the Low (not including buffer) of the first 4H bar of the week.

I understand that part,...
Because, say the price is 134.00 right now, the sell order is placed at 133.80, and the Red MA (Break Even MA) is currently at 133.65, then according to conditional rules 1, the stoploss for this order would be in the profit zone by 15 pips, as a result, there IS no stoploss applied, so I state to trail it with a trailing stop of 50% box size.
  • #140
  • Sep 25, 2009 8:25pm Sep 25, 2009 8:25pm
Quoting Pharoah
Because, say the price is 134.00 right now, the sell order is placed at 133.80, and the Red MA (Break Even MA) is currently at 133.65, then according to conditional rules 1, the stoploss for this order would be in the profit zone by 15 pips, as a result, there IS no stoploss applied, so I state to trail it with a trailing stop of 50% box size.
Got it . . . thanks Pharoah.
Greetings from Guanajuato, Mexico
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