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4H Box Breakout

  • #4,541
  • Edited 2:08pm Oct 3, 2009 1:49pm | Edited 2:08pm
Quoting Pharoah
Yonnie has suggested to make the box size approximately 100 pips big every week, by adding 50 pips the the close of the 1st 4H bar to make the box high, and subtract 50 pips from the close of the 1st 4H bar to make the box low. This system when used with my smartstop system has turned this week into a 365 pip profit week (before my box adjustment method)
Hi Pharoah

Appreciate the response..thanks, Ill maybe give it a go next week and run it along side what I've been doing....which may or may not help. But I think I might be able to save you a few unnesscary losses.

Another thing to consider adding to your system is maybe "Ichimoku" one of the main features of this system is the "Kumo" (cloud). The Kumo is very special as it gives you a glimpse into the future where support & resistance has previously been. Therefore it is an area where you may consider wanting to avoid trading when price action is within it. Below is the same periods that I showed on my previous entry to this thread, but this time there are no losses and only profit.

w/e 10/09 = profit 65 pips (would not have traded until the close below the Kumo Cloud, ie: price emerged out of a resistance area)
w/e 18/09 = profit 94 pips
w/e 18/09 = profit 188 pips
w/e 25/10 = profit 700 pips

total gains = 1047 on one pair the GBPJPY

I would not have entered w/e 02/10 for reasons previously explained and therefore would not be sitting on a current loss of -250 pips, which in my opinion will not recover and will only go further south, unless there is a trend direction change prior to the stop being hit, which looking at the current trend strength on the Daily is unlikely to happen.

I'll let you draw your own conculsions as to whether you think it might aid your system. But when you study the picture below I have shown the entry points with grey circles. What the Ichimuko Kumo cloud does is clearly show two things. It shows us that the main trend on the H4 is bearish because price action is below the Kumo and the Kumo is angled downwards. See how the price when it goes into pull back bounces off the underside of the Kumo (previous resistance). Therefore you would only consider opening short positions, (well I would !) This pair is in a down trend, so I would not enter a trade against that.

You would only increase your chances of being successful in both directions if the Kumo was flat (horizontal) which would indicate a ranging market. And if you were lucky enough for the price to bounce between your take profits zones.

There only my opinions, but to me it looked like it may help eliminate some losses by not trading against the trend. I would also check the Kumo on the Daily chart and make sure that matched the direction of the H4 for confirmation of the bigger picture. Also when I use Ichimoku there are many other factors I would consider before entering a trade, but looking at your system it just seemed to fit with it.

Attached Image (click to enlarge)
Click to Enlarge Name: h4.gif Size: 35 KB

Attached Image (click to enlarge)
Click to Enlarge Name: daily.gif Size: 37 KB




Cheers


ab1
  • #4,542
  • Oct 3, 2009 2:10pm Oct 3, 2009 2:10pm
Quoting ab1
Hi Pharoah

Appreciate the response..thanks, Ill maybe give it a go next week and run it along side what I've been doing....which may or may not help and save you a few unnesscary losses.

Another thing to consider adding to your system is maybe "Ichimoku" one of the main features of this system is the "Kumo" (cloud). The Kumo is very special as it gives you a glimpse into the future where support & resistance has previously been. Therefore it is an area where you may consider wanting to avoid trading when price action is within it....
I've always been interested in the Ichimoku, however, am unable to fully understand it's actual use. I'm a big fan of Asian techniques in general (not just trading wise, stuff like Anime and the like as well). The tend to have an innate ability to analyze just about anything and come out victorious.

I believe I read somewhere that Ichimoku is an Asian made trading technique. Could be wrong and would appriciate if anyone could verify this for me.

Also ab1, I do believe that Ichimoku could be very benificial to any breakout system because of it's unique characteristics. And I would be willingto learn more about Ichimoku. You seem to have a good grasp on it. Maybe we should talk more about it to see if we can draw a more profitable sollution for entering trades.
  • #4,543
  • Oct 3, 2009 2:27pm Oct 3, 2009 2:27pm
Quoting Pharoah
I've always been interested in the Ichimoku, however, am unable to fully understand it's actual use. I'm a big fan of Asian techniques in general (not just trading wise, stuff like Anime and the like as well). The tend to have an innate ability to analyze just about anything and come out victorious.
Hi

Anything to help one another in our quest to win in Forex.

If you go to the Forums section of this site and look in the Systems section you will see a very popular thread called "Ichimoku Forever", in fact very close to your one.

There is all you need on there with instructions, indicators etc. Plus during the day there is constant support from all the guys & girls discussing live market entries etc whilst trading...were all watching each others backs.

Oh, bye the way the system is from Japan. And I am just an apprentice with this system but offer any advice if it helps

Cheers


ab1
  • #4,544
  • Oct 3, 2009 8:32pm Oct 3, 2009 8:32pm
Quoting ab1
Hi

Anything to help one another in our quest to win in Forex.

If you go to the Forums section of this site and look in the Systems section you will see a very popular thread called "Ichimoku Forever", in fact very close to your one.

There is all you need on there with instructions, indicators etc. Plus during the day there is constant support from all the guys & girls discussing live market entries etc whilst trading...were all watching each others backs.

Oh, bye the way the system is from Japan. And I am just an apprentice with this system...
Thanks, I checked it out, and I think I've found why I couldn't follow Ichimoku... I notice I had to keep referencing an image to know exactly what indicator was being spoken of, because they are all Japanese names, I have a hard time retaining them.

For my own use I think I'm going to rename them to English names so I know what's going on and I will test this extensively.
  • #4,545
  • Oct 3, 2009 9:10pm Oct 3, 2009 9:10pm
Quoting Pharoah
The trade was executed at 140.85, first half position closed at 141.85 (+100) second half closed at 143.5 (+265) For a grand total of 365 pips
I`m just wondering something about your way of posting your winning pips........

Somebody might enter with 1 position, risking 2% and closing at +265 pips.
You might enter 2 positions, risking 1% each, closing 1 @ +100 pips and the other @ +265 pips.

The first person reports a profit of 265 pips and you report 365 pips profit.

Suppose my assumption is right, shouldn`t you report (100 + 265) : 2 = 182.5 pip profit to be able to compare it with the 1st person?

Sorry if I misunderstood
  • #4,546
  • Edited 10:08pm Oct 3, 2009 9:51pm | Edited 10:08pm
Quoting yonnie
I`m just wondering something about your way of posting your winning pips........

Somebody might enter with 1 position, risking 2% and closing at +265 pips.
You might enter 2 positions, risking 1% each, closing 1 @ +100 pips and the other @ +265 pips.

The first person reports a profit of 265 pips and you report 365 pips profit.

Suppose my assumption is right, shouldn`t you report (100 + 265) : 2 = 182.5 pip profit to be able to compare it with the 1st person?

Sorry if I misunderstood
Yes and no, I don't enter 2 positions, I only enter 1, and close half of it out at +100 pips. Yes it's the same effect, But because it acts the same as 2 positions, it's to be treated like 2 positions, but the overall is +365 pips for that 1 trade. +100 for the first half, and +265 for the second half. And because I state this in my summary (what half earned what) it can be calculated into a whole for a grand total.

It's the same as if the price was to have reversed after TP1 and the second half got stopped out at -70 pips. The trade of the week earned a total of 30 pips, how it earned it was gaining 100 pips, than loosing 70 pips. But the end result will always be the same. + they are neglecting the close half at TP1, so they can't even compare results unless they are trying to determine the most profitable technique long term.

The end results for that example is the money value would be higher in the 1 trade 2% situation (assuming the same size account) But is also forgetting the fact that TP1 is hit quite often, even when price reverses. So the overall might not be as profitable. I suppose it depends on a persons money management, but I could calculate my totals differently to compare with those that don't take 1/2 position at TP1.
  • #4,547
  • Oct 3, 2009 10:51pm Oct 3, 2009 10:51pm
Quoting yonnie
I`m just wondering something about your way of posting your winning pips........

Somebody might enter with 1 position, risking 2% and closing at +265 pips.
You might enter 2 positions, risking 1% each, closing 1 @ +100 pips and the other @ +265 pips.

The first person reports a profit of 265 pips and you report 365 pips profit.

Suppose my assumption is right, shouldn`t you report (100 + 265) : 2 = 182.5 pip profit to be able to compare it with the 1st person?

Sorry if I misunderstood

We had this same issue back in the old days with the OzFx thread. There seems to be an issue with both ways of interpreting the totals.
  • #4,548
  • Oct 3, 2009 11:00pm Oct 3, 2009 11:00pm
Quoting wrenski
We had this same issue back in the old days with OzFx thread. There seems to be an issue with both ways of interpreting the totals.
Exactly, like for example, if I trade 4% because TP1 is hit more often than not, and let my other 2% ride, my monetary earnings would be much higher, and the pip reward would be higher than that of trader 1 due to that fact (same number of pips gained on the whole run after the half at TP1 was closed, + the TP1 gain)

It's all dependent on money management. I say those that trade on a TP1 close half label anything trade related as such, and anyone that does not, label accordingly. There's no real way to determine the proper calculations because with one technique, you're just letting it ride, with the other, you know of a higher success at a certain point so you take advantage of it. As a result, the MM rules would change slightly.
  • #4,549
  • Oct 4, 2009 12:20am Oct 4, 2009 12:20am
Quoting yonnie
Timeframe: I have a different tf to take my trades from and its visible on the hourly chart. Sometimes the entry price is the same as the 4H box, sometimes not. Generally the box is smaller than the 4H box. Thats my puzzle for you guys for this weekend
OK, Yonnie, since you ruined my weekend thinking over your puzzle, here's my stab in the dark . . . are you using only hours 3 and 4 of the first 4H candle?
Greetings from Guanajuato, Mexico
  • #4,550
  • Oct 4, 2009 12:22am Oct 4, 2009 12:22am
Quoting Pharoah
I say those that trade on a TP1 close half label anything trade related as such, and anyone that does not, label accordingly. There's no real way to determine the proper calculations because with one technique, you're just letting it ride, with the other, you know of a higher success at a certain point so you take advantage of it. As a result, the MM rules would change slightly.
We've discussed this before, and the way I handle it when I post my results is simply to include a "pips per trade" section on the report.
Greetings from Guanajuato, Mexico
  • #4,551
  • Oct 4, 2009 1:17am Oct 4, 2009 1:17am
hey great guys of FF...

i was wondering how many weeks in a row have v had a losing steak since aug 2009?
i know that 2 weeks ago or so v had a winning week. i was away on holiday so i didnt really pay attention. does anyone know whether this win was from the 1st or 2nd trade that week?

thanks a lot guys
  • #4,552
  • Oct 4, 2009 1:20am Oct 4, 2009 1:20am
Quoting yen44x
OK, Yonnie, since you ruined my weekend thinking over your puzzle, here's my stab in the dark . . . are you using only hours 3 and 4 of the first 4H candle?
this is not a guessing game........sorry
  • #4,553
  • Oct 4, 2009 1:31am Oct 4, 2009 1:31am
Quoting yonnie
this is not a guessing game........sorry
ouch...
Addicted and proud of it!
  • #4,554
  • Edited 2:18am Oct 4, 2009 1:35am | Edited 2:18am
Quoting Pharoah
Exactly, like for example, if I trade 4% because TP1 is hit more often than not, and let my other 2% ride, my monetary earnings would be much higher, and the pip reward would be higher than that of trader 1 due to that fact (same number of pips gained on the whole run after the half at TP1 was closed, + the TP1 gain)
don`t think it matters what percentage you put on each trade.

trader 1 puts on 2% and takes profit @ +265 and his profit is +265 pips
trader 2 puts on 4% and takes profit @ +265 and his profit is +265 pips as well on his trade

but if trader 2 puts on 4% and takes profit @ 175 pips and hears that trader 1 closed out his position @ 265 pips, trader 2 although his total profit is higher than that of trader 1 might still think: S**t, I should do better than that.

giving total pips with multiple positions doesn`t say anything about the efficiency of that money management system IMHO.

sorry Pharoah, its NOT about the efficiency of that money management system.

it should read: giving total pips with multiple positions doesn`t say anything about the excellence of the trader IMHO.
  • #4,555
  • Oct 4, 2009 1:42am Oct 4, 2009 1:42am
Quoting yonnie
don`t think it matters what percentage you put on each trade.

trader 1 puts on 2% and takes profit @ +265 and his profit is +265 pips
trader 2 puts on 4% and takes profit @ +265 and his profit is +265 pips as well on his trade

but if trader 2 puts on 4% and takes profit @ 175 pips and hears that trader 1 closed out his position @ 265 pips, trader 2 although his total profit is higher than that of trader 1 might still...
It does when taken into consideration a 70 pip loss after a TP1 takeprofit leaves you with +30 pips... instead of -70 pips. Because of the MM within the trade.

I personally don't feel money management is only for determining lot size.. without proper in-trade money management, specially when considering a Breakout system as it has no real S&R relevance levels to work from, you could enter a short and the support line could be 20 pips below entry. But like I said, it's all dependent on money management, if you like to risk more instead of banking what you can when you can. Then 2% run till whenever is game for you. For me, because of the pure lack of technical backing to determine actual breakout direction, money management while within the trade is just as important than money management when determining lot size when entering.
  • #4,556
  • Oct 4, 2009 1:59am Oct 4, 2009 1:59am
Quoting Pharoah
It does when taken into consideration a 70 pip loss after a TP1 takeprofit leaves you with +30 pips... instead of -70 pips. Because of the MM within the trade.
sorry, dont think I understand what you`re saying here.

I`m not talking about the wisdom of taking 1 or multiple postitions if that is what you meant.

I`m only talking about how to report profits regardless if you have 1 or more positions on or the size(s) of the position(s), so that the pips of every trader can be compared.

I`ve seen it before: somebody comes here and says: I made 1,200 pips this week on different pairs.
well it tells me nothing, without having to ask heaps of questions or does that tell you anything?

the same with multiple positions: you can have positions and come in here saying: I made 1,500 pips.
again it doesn`t tell me anything without exactly knowing how you trade.
but if you divide the 1,500 by your number of positions if they`re all equal, then we can compare.
  • #4,557
  • Oct 4, 2009 2:12am Oct 4, 2009 2:12am
Quoting yonnie
sorry, dont think I understand what you`re saying here.

I`m not talking about the wisdom of taking 1 or multiple postitions if that is what you meant.

I`m only talking about how to report profits regardless if you have 1 or more positions on or the size(s) of the position(s), so that the pips of every trader can be compared.

I`ve seen it before: somebody comes here and says: I made 1,200 pips this week on different pairs.
well it tells me nothing, without having to ask heaps of questions or does that tell you anything?

the same with multiple...
I get what your saying, don't get me wrong, and I agree with you fully, this is why I state in my post's how much was made, where it was made, and the overall outcome. I don't just pop on and post a overall pip count with no description as to why or how. The recent post's I've made in conjunction with this particular discussion is me explaining everything I've already explained in the post that was quoted to begin this discussion to begin with. I honestly see no reason for this discussion. And I think it should end, because I am now feeling like I have to defend myself for no reason what so ever.
  • #4,558
  • Oct 4, 2009 2:20am Oct 4, 2009 2:20am
Quoting Pharoah
Thanks, I checked it out, and I think I've found why I couldn't follow Ichimoku... I notice I had to keep referencing an image to know exactly what indicator was being spoken of, because they are all Japanese names, I have a hard time retaining them.

For my own use I think I'm going to rename them to English names so I know what's going on and I will test this extensively.
Hi Again

The names of Ichimoku are just labels for the five major elements within it, so I guess it doesent matter what you call them as long as you understand there use and function within the system.

In essence all I was pointing out is that in your system is you appear to have no reference at any point to the trend, or support & resistance levels. And I thought it could be improved, as I think blindly opening positions, especaily against the trend is risky from the point that you will encounter a lot of losses that you otherwise may not if you employ these two things. Whether it is Ichimoku or anything else is really irrelevant. Ichimoku just happens to be based on trend & support & resistance.

But any support & resistance monitoring + trend, I think would benefit as you have a map of what the market is doing and more importantly where it might go next!

Cheers


ab1
  • #4,559
  • Oct 4, 2009 2:24am Oct 4, 2009 2:24am
sorry Pharoah.

I must come over too strong and I apologize for that.

I actually made an error in post 4554 and that`s how I led you astray with the money management thingy.

sorry
  • #4,560
  • Oct 4, 2009 2:37am Oct 4, 2009 2:37am
Quoting ab1
Hi Again

The names of Ichimoku are just labels for the five major elements within it, so I guess it doesent matter what you call them as long as you understand there use and function within the system.

In essence all I was pointing out is that in your system is you appear to have no reference at any point to the trend, or support & resistance levels. And I thought it could be improved, as I think blindly opening positions, especaily against the trend is risky from the point that you will encounter a lot of losses that you otherwise may not if...
I agree, I've just read the manual that you pointed out to me and it does appear to be alot clearer, I'm going to be replacing all of the names within the document and images to names I can remember. But after reading that manual it has painted a much better picture of what Ichimoku is, and how to use it. I'm still confused about a couple of things, but that's because I can't remember the distinctions in the japanese names. But I believe once I do so, I'll gain a much much better picture of it's use, and will most likely include it in my tests.

The R:R for Ichimoku seems to be very very good and I would like to be able to utilize that within my system to improve my system.

I must note tho, this is not my system at all (4H Box Breakout) this is ace's, I have 2 other systems at this time posted here, one is in direct relation to this one, and the other is a more advanced version that I believe will also somewhat act as a S&R finder. The way it acts is when a trade closes in a profit, this suggests that one reason the trade closed is possibly because of a reversal due to S&R, or a breaktrough of the S&R, and because now the box has moved to that location, it's now a matter of break of S&R or reversal from S&R. This isn't always the case, but I believe that this will prevent alot of those second trades from losing. Another good quality of the box move system, is if the week is a range week, and the price breaks the high and low of the box multiple times, if the box moves up to the top for a new breakout box, when the price drops back down below the original box's low, picking up a sell on the newly formed box at the high of the range, trade closes in a profit, new box at the low end of the range, price moves back up picking up a buy along the way, proceeding to go above the high of the original box, closing the trade in a profit.

Extensive testing will be going on to ensure this system works and hopefully, I can include the Ichimoku elements to assist in picking out profitable trades.
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