A Volatilty Breakout Idea

I've been toying with the concept of volatility breakouts ever since reading about Larry Williams' success quite some years ago and a very interesting article by Linda Bradford Ratchke.
I've always been a discretionary trader and avoided EAs but I feel perhaps it's time to try something new.

Here's my idea for a simple volatility breakout and I'd like productive, constructive input from others. If anyone is able to code an EA that would be great!

General Idea: to take a chunk out of intraday trends.

Timeframe: 15 minute charts,
Currency: EUR/USD

Go Long at the open of the next bar if:
- the current bar closes at least 5 pips above the previous bar's high, and
- the current bar closes above the high of the previous 5 bars, and
- the current bar's close is higher than the high 12 bars ago.


Take Profit = 15 pips, Stop Loss =15 pips. Only have 1 trade open at a time.

Reverse above entry criteria for shorts.

Money Management is discretionary. It would be nice if an EA had an input for account type (standard, mini) and lot size or even % of account balance to be risked on each trade.

Possible tweaking could include limiting the session or time of day to look for trades.

If this method does show some potential, I'd like to try and keep the general idea uncluttered from indicators.

example short

example long

this all could be horseshit, but as the thread is title, an idea

this thread:
http://www.forexfactory.com/showthread.php?t=213383

offers a generic breakout ea, perhaps you can set it to suit your needs. I haven't used it myself so I wouldn't know what settings to use.

looks good for catching the initial part of the trend, which of course is the overall aim...

thanks MorningMania, I'll check that out later.

so anyone have any thoughts on this breakout idea?

Blue is 12 pd price channel H/L. Orchid 5, and white 1...Sur l'escalier...it is all bullshit.

Trades seem cherry-picked to me. Do you think you could link that article?

 

1. extern string Remark2 = "";
2. extern string Remark3 = "== System Settings ==";
3. extern bool ReverseTrades = False;
   1. Reverses trade signals

4. extern int PipBuffer = 50;
   1. The number of pips the current bar needs to close outside the high/low of the previous bar.

5. extern int HighestLowestSet = 5;
   1. The number of previous bars that the current bar needs to be the highest high / lowest low of.

6. extern int HigherLower = 12;
   1. The shift of the bar that needs to be lower/ higher than the current bar.

thanks Pippopotamus, it does a bit.

Hi RR, I think I posted th LBR article quite some time ago, will dig it up soon. I remember she spoke about various types of breakouts such as 2,3,4,5 period breakouts and how they can be very simple but effective trading strategies often overlooked.

by such Gurus. Does the phrase,"can be," provide enough wiggle room for legal invurnerability? Say such a Guru has been trading for 25 years with a method that actually works. Say such a Guru started with a 25K acct. and made 5% on previous ballance/mo, compounding every month. Shouldn't such a Guru have all the money in the world by now(LOL)? Would such a Guru bother writing books just to make a little chump change?? Noooooooooooooooooooo. Perhaps out of the goodness of his/her heart? Noooooooooooooooooooooo. You may try trading one of these ideas for a year. For pennies. If it works, you will have plenty of time to become filthy rich.

While I agree traders trade and teachers teach. There are always exceptions to the rule.

I am going to go out on a limb and say LW is one of them. This is from my personal experience. Blanket statements are worthless.

Trumpcard , simple trading strategies such as the one you have posted here work. Traders are notorious for overcomplicating things.

Check out genesis software. By far the best IMO for testing strategies such as those you have mentioned.

Good Luck

Bluesteele

is a blanket statement. Pippo

blue line - 5 pips above the previous bar's high
red line - 5 pips below the previous bar's low
deepskyblue line - the high of the previous 5 bars
hotpink line - the low of the previous 5 bars
steelblue line - the high 12 bars ago
peru line - the low 12 bars ago
aqua dot - the higest of blue, deepskyble, steelblue line
pink dot - the lowest of red, hotpink, peru line

entry at yellow line. right?

entry at 1.33473(yellow line)....is this right?
(ignore the sell line, it is not related)

Bluesteele: thanks for the support, I'm just toying around looking for simple stratgies that hopefully result in more winners than losers. LW is renowned in his expensive seminars for trading simple breakouts in real time. Genesis software sounds good. Do they have a trial version?

Taiyakixz, I think your charts are correct but a bit confusing with so many lines everywhere. As long as the yellow lines meet the entry criteria then that's where the entry would be!

Hey Trump,

Yes Genesis has a free trial version but does not carry all the features as the full blown version.

It's been a number of yrs tho since I used the trial version and maybe changed ??? It used to be and probably is still quite expensive. Just depends which pond your fishing in tho ;-)

I have said it myself in the past that traders trade and teachers teach. But I know for a fact LW makes plenty of dough trading. Do all of his methods work no not for everyone. But give 10 traders the same winning system/methodology and you will get 10 different results from fantastic to utter failure. That's trading.

Good Luck,

Bluesteele

To date, the most money I've made trading has been with breakout approaches. The best one is a variation on a Larry Williams approach. They 'work' but you have to tend to them, look for pullbacks prior to entry, figure out how you're gonna' exit.

lines are hidden. try this indi.
Buy when bar closed above aqua dot.
Sell when bar closed below pink dot.(edit:aqua->pink)

If you use 5 digits broker, change the parameter Pips 5 to 50.

(ignore buy line, it is not related)

aqua dot is the highest of
- 5 pips above the previous bar's high
- the high of the previous 5 bars
- the high 12 bars ago
pink dot is the lowest of
- 5 pips below the previous bar's low
- the low of the previous 5 bars
- the low 12 bars ago