The Small hours:
I’ve discovered a method that I find to be quite profitable and very reliable (Actually, this is one of four systems I purchased from Bill Poulos program “Profit Multiplier”). I did not create or own this system, this is just my contribution to this thread. I’ve affectionately called the system “The Small Hours”, (title of a song by Metallica). I call it the small hours because it zeros in on the quiet hours of the forex market; it then hunts for a break out point. A few indicators and much patience is required to trade this method! I began using it on the 31st of Jan; 8 wins from 9 trades (+155 pips) from this one method. The one losing trade was hit on a trail (-22 pips).
Indicators used:
20 SMA applied to close
40 SMA applied to close
Average True Range (ATR): Period 20 (this is used to determine the small hours!)
Time frame: 4H is the most effective, although it can be applied to any time frame
Currency Pair: any of the 6 majors (EURUSD has been the most actively traded)
Setup rules Down trend:
1. The highest high of the last 5 bars (as of current bar) minus the lowest low of the last 5 bars must be less than 1.5 x the ATR value as of setup bar, after bar closes. Mouse over the most recently closed bar to get ATR value (hint: open Data pane in MT4.)
a. Highest High = 1.3658 minus the lowest low = 1.3608 = .005 (or 50 pips)
b. Get ATR value, (usually followed by a decimal i.e. .0046). Do not use the decimal to calculate the ATR. ATR as of current closed bar = .0046 would be calculated like this: 46 x 1.5 = 69.
c. The total movement of PIPS of the last 5 bars is 50 pips (highest high minus lowest low) is indeed lower than the ATR value of 69. Small hours confirmed.
d. If the total pips moved is GREATER than the ATR value then movement is too volatile.
2. The low of the current (closed) bar is greater (higher) than the lowest low of the last 5 bars.
3. The close of the current bar is less that (lower) than the 20 or 40 SMA (can be lower than both)
If any of these conditions are not met, the setup is not valid!
Setup rules Up trend:
1. Same as rule #1 for Down trend setup (see #1, 1A, 1B, 1C & 1D above)
2. The high of the current (closed) bar is less (lower) than the highest high of the last 5 bars.
3. The close of the current (closed) bar is greater (higher) than the 20 or 40 SMA (can be higher than both)
If any of these conditions are not met, the setup is not valid!
Entry Rules Down trend:
1. Place 2 limit / stop order’s at the lowest low of the last 5 bars minus 3 pips, minus spread
a. Example: Lowest low last 5 bars = 1.3614 Limit / stop order = 1.3608
Initial stop loss placement:
2. Place stop loss at the highest high of the last 5 bars plus 3 pips plus spread for both orders.
3. Profit target #1:
a. First order: Entry price minus .75xATR value of setup bar
b. Example: Entry price 1.3608
c. Example: ATR value = .00046 (46 x .75= 34 pips)
d. Example: 1.3608 minus 34 pips = 1.3574 TP1
4. Profit target #2:
a. Second order: Entry price minus 1.5xATR value of setup bar
b. Entry price 1.3608
c. Example: ATR value = .00046 (46 x 1.5= 69 pips)
d. 1.3608 minus 69 pips = 1.3539 TP2
5. Money Management (Never risk more than 5% account balance on any 1 trade!):
a. Once triggered, if profit target #1 and initial stop loss are not hit, move your stop after the close of each subsequent bar to the highest high of the last 3 bars.
b. If stop loss is hit the trade is OVER there is no re-entry
c. When TP1 is hit, move the stop loss of remaining open order to breakeven (for a now free ride), continue to move stop down to the highest high of last 3 bars. Do this until TP2 or stop is hit.
Entry Rules Up trend:
1. Place 2 limit / stop order’s at the highest high of the last 5 bars plus 3 pips, plus spread
a. Example: Highest High last 5 bars = 1.3608 Limit / stop order = 1.3614
Initial stop loss placement:
2. Place stop loss at the lowest low of the last 5 bars minus 3 pips minus spread for both orders.
3. Profit target #1:
a. First order: Entry price plus .75xATR value of setup bar
b. Example: Entry price 1.3614
c. Example: ATR value = .00046 (46 x .75= 34 pips)
d. Example: 1.3614 plus 34 pips = 1.3648 TP1
4. Profit target #2:
a. Second order: Entry price plus 1.5xATR value of setup bar
b. Entry price 1.3614
c. Example: ATR value = .00046 (46 x 1.5= 69 pips)
d. 1.3614 plus 69 pips = 1.3683 TP2
5. Money Management (Never risk more than 5% account balance on any 1 trade!):
a. Once triggered, if profit target #1 and initial stop loss are not hit, move your stop after the close of each subsequent bar to the lowest low of the last 3 bars.
b. If stop loss is hit the trade is OVER there is no re-entry
c. When TP1 is hit, move the stop loss of remaining open order to breakeven (for a now free ride), continue to move stop up to the lowest low of last 3 bars. Do this until TP2 or stop is hit.
Good Luck!
I’ve discovered a method that I find to be quite profitable and very reliable (Actually, this is one of four systems I purchased from Bill Poulos program “Profit Multiplier”). I did not create or own this system, this is just my contribution to this thread. I’ve affectionately called the system “The Small Hours”, (title of a song by Metallica). I call it the small hours because it zeros in on the quiet hours of the forex market; it then hunts for a break out point. A few indicators and much patience is required to trade this method! I began using it on the 31st of Jan; 8 wins from 9 trades (+155 pips) from this one method. The one losing trade was hit on a trail (-22 pips).
Indicators used:
20 SMA applied to close
40 SMA applied to close
Average True Range (ATR): Period 20 (this is used to determine the small hours!)
Time frame: 4H is the most effective, although it can be applied to any time frame
Currency Pair: any of the 6 majors (EURUSD has been the most actively traded)
Setup rules Down trend:
1. The highest high of the last 5 bars (as of current bar) minus the lowest low of the last 5 bars must be less than 1.5 x the ATR value as of setup bar, after bar closes. Mouse over the most recently closed bar to get ATR value (hint: open Data pane in MT4.)
a. Highest High = 1.3658 minus the lowest low = 1.3608 = .005 (or 50 pips)
b. Get ATR value, (usually followed by a decimal i.e. .0046). Do not use the decimal to calculate the ATR. ATR as of current closed bar = .0046 would be calculated like this: 46 x 1.5 = 69.
c. The total movement of PIPS of the last 5 bars is 50 pips (highest high minus lowest low) is indeed lower than the ATR value of 69. Small hours confirmed.
d. If the total pips moved is GREATER than the ATR value then movement is too volatile.
2. The low of the current (closed) bar is greater (higher) than the lowest low of the last 5 bars.
3. The close of the current bar is less that (lower) than the 20 or 40 SMA (can be lower than both)
If any of these conditions are not met, the setup is not valid!
Setup rules Up trend:
1. Same as rule #1 for Down trend setup (see #1, 1A, 1B, 1C & 1D above)
2. The high of the current (closed) bar is less (lower) than the highest high of the last 5 bars.
3. The close of the current (closed) bar is greater (higher) than the 20 or 40 SMA (can be higher than both)
If any of these conditions are not met, the setup is not valid!
Entry Rules Down trend:
1. Place 2 limit / stop order’s at the lowest low of the last 5 bars minus 3 pips, minus spread
a. Example: Lowest low last 5 bars = 1.3614 Limit / stop order = 1.3608
Initial stop loss placement:
2. Place stop loss at the highest high of the last 5 bars plus 3 pips plus spread for both orders.
3. Profit target #1:
a. First order: Entry price minus .75xATR value of setup bar
b. Example: Entry price 1.3608
c. Example: ATR value = .00046 (46 x .75= 34 pips)
d. Example: 1.3608 minus 34 pips = 1.3574 TP1
4. Profit target #2:
a. Second order: Entry price minus 1.5xATR value of setup bar
b. Entry price 1.3608
c. Example: ATR value = .00046 (46 x 1.5= 69 pips)
d. 1.3608 minus 69 pips = 1.3539 TP2
5. Money Management (Never risk more than 5% account balance on any 1 trade!):
a. Once triggered, if profit target #1 and initial stop loss are not hit, move your stop after the close of each subsequent bar to the highest high of the last 3 bars.
b. If stop loss is hit the trade is OVER there is no re-entry
c. When TP1 is hit, move the stop loss of remaining open order to breakeven (for a now free ride), continue to move stop down to the highest high of last 3 bars. Do this until TP2 or stop is hit.
Entry Rules Up trend:
1. Place 2 limit / stop order’s at the highest high of the last 5 bars plus 3 pips, plus spread
a. Example: Highest High last 5 bars = 1.3608 Limit / stop order = 1.3614
Initial stop loss placement:
2. Place stop loss at the lowest low of the last 5 bars minus 3 pips minus spread for both orders.
3. Profit target #1:
a. First order: Entry price plus .75xATR value of setup bar
b. Example: Entry price 1.3614
c. Example: ATR value = .00046 (46 x .75= 34 pips)
d. Example: 1.3614 plus 34 pips = 1.3648 TP1
4. Profit target #2:
a. Second order: Entry price plus 1.5xATR value of setup bar
b. Entry price 1.3614
c. Example: ATR value = .00046 (46 x 1.5= 69 pips)
d. 1.3614 plus 69 pips = 1.3683 TP2
5. Money Management (Never risk more than 5% account balance on any 1 trade!):
a. Once triggered, if profit target #1 and initial stop loss are not hit, move your stop after the close of each subsequent bar to the lowest low of the last 3 bars.
b. If stop loss is hit the trade is OVER there is no re-entry
c. When TP1 is hit, move the stop loss of remaining open order to breakeven (for a now free ride), continue to move stop up to the lowest low of last 3 bars. Do this until TP2 or stop is hit.
Good Luck!
