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Attachments: 7am-9am Big Dog USD Breakout Strategy
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7am-9am Big Dog USD Breakout Strategy

  • #2,681
  • Oct 13, 2010 8:15am Oct 13, 2010 8:15am
Quoting ES Trader
I have been trading it everyday, really a great and very simple system
Hi ES Trader

Are you trading this using GB/US and Eu/US?
You mention you are having some good success, are you letting you profits run or do you close at plus 30 pips?

Thanks

WFX
  • #2,682
  • Edited 8:55pm Oct 13, 2010 4:21pm | Edited 8:55pm
I have been studying the behaviour of GBPUSD.

One reason this Big Dog Breakout strategy works is because of a period of lower volatility leading up to the NYSE open. Monitoring the 7-9am range then placing orders at 9:15 takes advantage of the 9:30 surge. If price breaks the range before 9:30 then something else (like news) is distorting the pattern.

This leads me to what I have called decision ranges. A decision range is a period of at least two hours of low volatility that comes before a confident move. A decision range shows a well balanced tipping point where price action may proceed in either direction.

I have identified three features of recent GBPUSD decision ranges:

 

  1. the range is stable (unbroken) for at least two hours
  2. the range height is 40 pips or less
  3. candles are opening in the middle of the range

A decision range may appear at a regularly scheduled time like we see at 7-9am ET approaching the NYSE open. A decision range may also appear at other non-scheduled times depending on market behaviour.

The chart below illustrates the two types of decision ranges, first a non-scheduled DR at 22:45 GMT and then the scheduled DR at 9:15 ET.

Attached Image (click to enlarge)
Click to Enlarge Name: bigdog-gbpusd-m15-20101013.gif Size: 19 KB


While these concepts may apply to other currency pairs the decision ranges followed by breakouts pattern appears most clearly on GBPUSD in my opinion.

Update: another clean example of an unscheduled decision range (DR) today...

Attached Image (click to enlarge)
Click to Enlarge Name: bigdogdr-gbpusd-m15-20101013.gif Size: 11 KB
  • #2,683
  • Oct 13, 2010 7:17pm Oct 13, 2010 7:17pm
Quoting robdee
I have been studying the behaviour of GBPUSD.

e like we see at 7-9am ET approaching the NYSE open. A decision range may also appear at other non-scheduled times depending on market behaviour.

The chart below illustrates the two types of decision ranges, first a non-scheduled DR at 22:45 GMT and then the scheduled DR at 9:15 ET.

Attachment

While these concepts may apply to other currency pairs the decision ranges followed by breakouts pattern appears most clearly on GBPUSD in my opinion.
Hi Rob,
Thanks for your out look.But the thing I don't understand is in your both samples a sell stop could've been hit first.Why did you ignore them?

I mean the decision range broke to the south first and then went up and you only show buy stop in your chart.
I don't get it.
Regards
Mike
Failure, is a wonderful teacher!
  • #2,684
  • Oct 13, 2010 8:13pm Oct 13, 2010 8:13pm
Quoting mike1349
...the thing I don't understand is in your both samples a sell stop could've been hit first.Why did you ignore them?
Mike, thanks for your question. I didn't add sell stops on that big chart because I was trying to clearly illustrate decision ranges and was avoiding clutter. The only trades that survived were the two buys so that is why I included them. I also assumed everyone knows about the sell stop / buy stop combination.

Let me confirm how I am setting up the trade entries. I am placing a buy stop 2 pips (2 pips = 20 points = 0.00020) above the range and a sell stop 2 pips below the range.

Attached Image (click to enlarge)
Click to Enlarge Name: bigdogentry-gbpusd-m15-20101013.gif Size: 12 KB
  • #2,685
  • Oct 14, 2010 2:07am Oct 14, 2010 2:07am
Originally Posted by eurisko http://cdn.forexfactory.com/images/buttons/viewpost.gif
Rules

Whenever the top or bottom of the range is price by price action, I entered 3 trades, My first trade TP would target #1, second trade would target #2, third trade would target #3.

Note: Becareful with a range less then 30.

Thanks eurisko
for your prompt response the the highlighted points above are what i am actually trying to understand
  • #2,686
  • Oct 14, 2010 3:55am Oct 14, 2010 3:55am
Quoting robdee
I have been studying the behaviour of GBPUSD.

One reason this Big Dog Breakout strategy works is because of a period of lower volatility leading up to the NYSE open. Monitoring the 7-9am range then placing orders at 9:15 takes advantage of the 9:30 surge. If price breaks the range before 9:30 then something else (like news) is distorting the pattern.

This leads me to what I have called decision ranges. A decision range is a period of at least two hours of low volatility that comes before a confident move. A decision range shows a [i]well...
Hi Robdee,

thanks for your insight observation about this strategy and sharing of the decision range idea. i think is a great idea.
how is your SL, TP and risk management and so far how is your results using this strategy?
  • #2,687
  • Oct 14, 2010 4:25am Oct 14, 2010 4:25am
Hi, I'm a FF lurker (not a newbie). Just caught sight of this thread and the simple concept attracted my attention as the basic strategy is similar to something I looked at (using EURUSD) but I never went live.

I've gone through a number of the thread pages and will be happy to go through all 180, but by chance has anyone done a summary of the generally most used indicators (ha, or even is there a generally agreed set of tools to trade this strategy most effectively?!).

Thanks,
  • #2,688
  • Oct 14, 2010 5:33am Oct 14, 2010 5:33am
Hello all and thank you for this strategy,

Like primestop I am discovering this thread, unlike him I am a newbie, spent the last two month reading a lot and just started to demo 1 system that I plan to demo for the next 3 months. I would like to demo this system too.

Isn't it important that we use the 2 hours at the opening of a session for this system to be effective ? I am gmt+2 so sry about that : UK opening (8am-10am gmt+2 / 2am-4am ET) US opening (1pm-3pm gmt+2 / 7am-9am ET). I read some posts about users (whom seem to know a lot more than me) using custom hours.

A small TP of 20pip sounds like it improves the winning trades ratio but don't we get killed by the losing trades if we have winning trades worth less than losing trades (even if we BE some of those losing trades) ? What would be a realistic winning trade ratio ?

I am still reading the thread but is there some post from people who used this system for an extended period of time that give their conclusions, positive or negative ?

Thank you !
  • #2,689
  • Oct 14, 2010 2:25pm Oct 14, 2010 2:25pm
Quoting Muten
...is there some post from people who used this system for an extended period of time that give their conclusions, positive or negative?
Muten, I agree with your questions. It would be very valuable to find a summary from experienced traders of this system. I haven't found one yet.

One thing I have done is troll through all the attachments looking for a PDF or other 'main' document. Thread attachments

My approach to getting started was to see if I could understand and apply everything in post #1. I trust that the author of post #1 knew what he was talking about. As I have gone through the process of applying just his instructions, manually drawing the ranges, entries and exits on my chart I have gained a better understanding of where and why this system has an edge.

First step is becoming fully aware of the edge or advantage. In other words, where, when and why are the odds in my favour ?

When it comes to money management I view that as a completely separate issue. Personal preferences are a vital part of MM. If we're not happy with the levels of risk and reward we'll probably move on, leaving behind a perfectly good edge simply because we're not happy.

I see two parts, first I need to comprehend and learn to trust the edge. The only way I can make good progress on that is to keep it simple, real simple. Second I need to settle into a style of MM that suits me. What suits me may not suit someone else.

While appropriate MM can enable the harvest of a good edge, inappropriate MM will surely strangle and obscur even the best edge. Keeping the two issues separate in my mind works better for me.
  • #2,690
  • Oct 14, 2010 4:08pm Oct 14, 2010 4:08pm
Quoting robdee
One thing I have done is troll through all the attachments looking for a PDF or other 'main' document. Thread attachments
Robdee - this is brilliant. Many thanks.
  • #2,691
  • Oct 15, 2010 3:17am Oct 15, 2010 3:17am
Living in New Zealand I'm asleep for the official 7-9am breakout range used with this system. This means I'm looking for breakouts at other times.

I'm monitoring four pairs GBPUSD AUDUSD EURUSD EURJPY.

 

  1. All four pairs broke short today at 23:00 GMT.
  2. Asian session formed decision ranges that broke long on GBPUSD 4:15 GMT
  3. AUDUSD broke long 90 mins later at 5:45 GMT.
  4. EURJPY failed to break away cleanly so I closed it out.
  5. EURUSD failed to form any valid decision ranges today.

Attached Image (click to enlarge)
Click to Enlarge Name: bigdogbreakouts-20101015.gif Size: 39 KB


See my previous post about decision ranges to see the criteria I'm using to define a valid setup.
  • #2,692
  • Oct 16, 2010 7:07am Oct 16, 2010 7:07am
Hi all

A special greeting to Forest-Sea, Scottyb.

Thanks to all Hard Workers.
If its not boring .. you are not trading correctly
  • #2,693
  • Edited 9:19am Oct 18, 2010 8:45am | Edited 9:19am
thx robdee, going through the threads.

I noted that the original poster was in fact new to the strategy and the author came later on, rectifying quite some things

Here are the few first messages that explained some things :
http://www.forexfactory.com/showpost...&postcount=208
http://www.forexfactory.com/showpost...&postcount=205
http://www.forexfactory.com/showpost...&postcount=204
http://www.forexfactory.com/showpost...&postcount=202
http://www.forexfactory.com/showpost...&postcount=194

He also used MAs to determine the trend, but I don't know why he still says that he would take trades in both direction over a single day..

That explains also why the first message was not edited with new info over time. I think I need to read the whole thread.

I have a very newbie question ; I can't place Sell Stop and Buy stops because I need 30 pip from price in Alpari UK demo.. Do you guys use another broker that allows it or some script ?

Thx, my manual entries are not great ...
  • #2,694
  • Oct 18, 2010 10:21am Oct 18, 2010 10:21am
Quoting mohamed6069
Hi all

A special greeting to Forest-Sea, Scottyb.

Thanks to all Hard Workers.
Hey Mohamed!

I'm still around. Been trading the Simple London breakout EA. It works very well for the Big Dog, Just have to optimize the times. I've been running on the Big Dog but have changed the times to start trading at 10am EST with pretty good results. They just released a new version of the EA 1.3b, but it's still a little buggy. But once they get it all figured out, I defintately recommend it.

GLTA!

ScottyB
  • #2,695
  • Oct 18, 2010 10:33am Oct 18, 2010 10:33am
Quoting ibthescottyb
Hey Mohamed!

I'm still around. Been trading the Simple London breakout EA. It works very well for the Big Dog, Just have to optimize the times. I've been running on the Big Dog but have changed the times to start trading at 10am EST with pretty good results. They just released a new version of the EA 1.3b, but it's still a little buggy. But once they get it all figured out, I defintately recommend it.

GLTA!

ScottyB

Good results are worth! *clap hands*
so your monitoring period, is amended from 7-9am est, to 7-10am est?
  • #2,696
  • Oct 18, 2010 6:53pm Oct 18, 2010 6:53pm
Quoting kedridder
Good results are worth! *clap hands*
so your monitoring period, is amended from 7-9am est, to 7-10am est?
interestingly enough, I used the EA I mentioned and ran an optimization set and found a box length of 6:30am to 10am EST had the best results for tests going back 1 year. So that is what I am using currently.

I am always running optimization tests, so you could ask me the same question a month from now and the box size may be different. We're heading into fall and patterns change.

GLTA!

ScottyB
  • #2,697
  • Oct 19, 2010 2:45am Oct 19, 2010 2:45am
Quoting ibthescottyb
interestingly enough, I used the EA I mentioned and ran an optimization set and found a box length of 6:30am to 10am EST had the best results for tests going back 1 year. So that is what I am using currently.

I am always running optimization tests, so you could ask me the same question a month from now and the box size may be different. We're heading into fall and patterns change.

GLTA!

ScottyB
Hi Scotty - Just to understand!

Are you trading a breakout of the high and lows between 6.30am and 10am EST?
Are you using the box size as the SL and TP, also if you enter say a short trade will you leave the pending long open or cancel it?

Thanks

WFX
  • #2,698
  • Oct 19, 2010 5:28am Oct 19, 2010 5:28am
Quoting ibthescottyb
interestingly enough, I used the EA I mentioned and ran an optimization set and found a box length of 6:30am to 10am EST had the best results for tests going back 1 year. So that is what I am using currently.

I am always running optimization tests, so you could ask me the same question a month from now and the box size may be different. We're heading into fall and patterns change.

GLTA!

ScottyB
Hi Scottyb
Im really still confused about stop loss, I think 70 pips is strong to be hitted by false reversal (in case of the box size larger than 70) but 70 is very big, the other side some people make it 15 pips. so what you think about SL??

about time so you make it 6:30 to 10:00 NEW YORK , but what is your target in pips

Thanks
If its not boring .. you are not trading correctly
  • #2,699
  • Oct 19, 2010 2:01pm Oct 19, 2010 2:01pm
Quoting Muten
I noted that the original poster was in fact new to the strategy and the author came later on, rectifying quite some things
Muten thanks for sharing those links, very helpful, so CTGUY is the author, I see he keeps the system very simple too, I like it.

Quote
I have a very newbie question ; I can't place Sell Stop and Buy stops because I need 30 pip from price...

In my experience most MT4 brokers require that pending orders are 3 pips away from market price (that's 30 points) on GBPUSD 0.00030. If you haven't got enough room for a pending order just go with a market order, that's what my backtest EA does and it's not a problem.

Another solution I use for live trading is to wait for price to return to the middle of the range (box) so then I have plenty of room to place my orders. One advantage of this is there will be more momentum at the time my order is filled. Price will have moved from center range to break the edge, moving that distance is better momentum than hanging out along one edge and just spiking over briefly.
  • #2,700
  • Oct 19, 2010 4:09pm Oct 19, 2010 4:09pm
Quoting wickstedFX
Hi Scotty - Just to understand!

Are you trading a breakout of the high and lows between 6.30am and 10am EST?
Are you using the box size as the SL and TP, also if you enter say a short trade will you leave the pending long open or cancel it?

Thanks

WFX
What I use for SL is the opposite side of the box + 3 pips. As far as other orders go, I prefer to only trade once per session. So once I am in, I don't trade the opposing side. That's just me.

Hope it helps :-)

ScottyB
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