Very Simple Breakout (into a Trend) System

2:1 H/L Breakout

The screenshot below shows the very simple system, and the template and indicators are attached.

1. Trade on any liquid instrument, that ahs shown historical tendancy to trend.
2. Choose a trigger time frame (1hr shown) - draw horizontal lines at the last obvious price swing Hi and Lo.
3. Await a candle close above/below the last swing Hi/Lo per step 2.
4. Sell/Buy that candle close so long as:

a. A trend exists on the next 2 time frames up...as determined by the 1hr trigger indicator (dots) that shows the 12/26/9 macd signal line's relationship to it's ma line.

These dots in decsending order must be;

Downtrend; red, red, green, red or red,red,red,red
Uptrend; green, green, red, green, or green, green, green, green

(ie showing that the next time frame's (4hr) macd signal line is crossed and pointing in direction of intended trend, and the next higher time frame above that (Daily's) is at least pointing in direction of intended trade, if not crossed below it's ma line too.

b. The market entry falls within the 20day average pip range.

Risk = max 2% of account, Risk:reward ratio 1:2, ie set an oco order -Stop above the opposite horizontal line, limit order twice the stop.

Trade across multi instruments (5 forex pairings for eg)

* A countdown indicator (attached in zip file) shows the time remaining until current candle close.
* Attached here too are sound alerts for cable, euro,swissy and yen that can be set at the horizontal lines.
* Also enclosed in zip file are the macd dots for a 15min trigger.

33.33% strike rate (winning trades as a % of total) breaks even.

I intend to demo this system in January of the new year across 5 pairings and will report the results on this thread...feel free to play along.

Platform/charting = MT4.

http://i41.tinypic.com/ftly86.gif

Should be an interesting experiment and can do so without interfering with own trading. I have some reservations about it in that breakouts always seem to be selling low, buying high but I guess that's the nature of a breakout, so we'll see.

I hope to catch all signals that come along during my own trading sessions only.

As for stops,
Downtrend: I will trail at top of 1st retrace when foot of 2nd retrace is exceeded in with trend direction and so on, trailing one retrace but one behind (on retraces that occur outside the Lo break)...see eg below.
Conversely
Uptrend:I will trail at bottom of 1st retrace when top of 2nd retrace is exceeded in with trend direction (on retraces that occur outside the Hi break.)
http://i39.tinypic.com/20gbpg1.gif

Hi BBMac,
I have been reading through your posts and am interested in your insights and methods.
I favour scalping and have for some time appreciated the value of areas of confluence (S/R etc) and the interplay across multiple time frames (EW stuff). Due to the need for tight SLs, scalping can be unforgiving re poor entries and I must say that I am impressed with your research to improve upon this by the use of divergence and OB/OS indicators.
How are you getting on with this somewhat simpler method (compared too your method described in your other thread)?

I am little surprised at the lack of feedback on what I would consider a method that has all the ingredients of success.

Keep up the good work.

Hi,
Is the 15M trigger indicator also showing 30M and 1H macd cross and pointing, next 2 higher TF as the 1H trigger is showing 4H and D?
sasa

A friend pointed out he still uses these indy's in his trading. Are there any updates you have to help us learn more about this method. Any chance you still use any of this?

Thanks,

Steve