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The Small Hours Simplified!

  • #161
  • Feb 14, 2011 4:11am Feb 14, 2011 4:11am
Last week I had 4 triggers (+155 pips) no loosers.

The week before I had 5 triggers (+140 pips). one trade missed TP1 by .5 pips, it reversed and hit stop for -22 pips. 4 wins from 5 triggers.

So I guess you could say I average 4 to 5 trades with this method per week.

Quoting angelofx
Very interesting system. How many signals do you get a day/week on a pair. I ask this because i have only found one on USDJPY and it was profitable but it is extremely difficult to find ATR x 1.5 value higher than HH5 minus LL5 and that is the key to trading this system, i guess.
  • #162
  • Feb 14, 2011 4:13am Feb 14, 2011 4:13am
Quoting Colostarr
No I would not. A difference of .5 pips yes I would consider it! But 3 pips...no I would not consider!
Many thanks Colostarr!

Anyway, I'm in (demo only!), let see how it goes (TP1 just reached +35 pip, 2nd trade at BE). Will monitor USDCHF at 12.00 candle close...

I have a question however re stop loss and TP. With TP2 of 1.5xATR and stop loss above/below HH5/LL5 (HH5-LL5 being < 1.5x ATR), this gives a R:R slightly below 1. The system needs then very high win rates to have success in the long run, no?

Thanks !
  • #163
  • Feb 14, 2011 4:16am Feb 14, 2011 4:16am
Quoting Colostarr
I said I have never used a Sunday Bar, in that I literally haven't used one because one hasn't been part of the rules. Not that I DON"T use a Sunday bar.

And yes you are correct I meant the 400 GMT bar (I used the close time). If you look at the chart the pair is in a definite up trend (sideways at the moment). At 1200 GMT if it still looks like it looks now, no reason to NOT set your stops and limits!

So together I guess we'll see if a Sunday Bar is a valid bar...yes?
Thanks for the explanation. So including the Sunday bar, what about your rule
# 2 ( The high of the most recently closed candle must be less than the HH5)? Current bar's (signal bar if it continues its sideway move) high is the HH5. Do yo still consider it as a valid signal bar?
  • #164
  • Feb 14, 2011 4:21am Feb 14, 2011 4:21am
While manually backtesting this system, it gave a lot of profitable setups based on the direction of the trend i.e if price is below the MAs and there is consolidation, price will likely breakout in the direction of the trend and if it goes against the trend you are safe because you did not set a buy order but the value of the ATR made most of the setups invalid because it has to be higher than HH5-LL5, my question to the author of this thread is: what is the significance of ATR 20, it seems to me that credence is given to its value than the HH5- LL5 and the position of the MAs relative to price.
  • #165
  • Feb 14, 2011 4:23am Feb 14, 2011 4:23am
Hi Colostarr,

1) Note: If TP’s or stops are not hit, change your stop after the close of each bar as follows: Move stop to the LL3 minus 3 pips, minus spread.

2) When first profit target is hit, move stop loss on remaining order to break even. Continue to move stop to LL3 as new bars form.
Good Luck!

I still don't understand these two statements. Could you elaborate a bit more about it.

Many thanks
  • #166
  • Edited 11:20am Feb 14, 2011 4:27am | Edited 11:20am
updated Small Hours traffic light
-added draw box around hh5-ll5
-atr and hh5 / ll5 levels show with 1 decimal
-customizable text color (not everyone uses black background
-better indication of lights, by using webdings font.

P.S. had to remove the alert function, caused to much trouble updating other texts and signals.
Currently looking to see if i can make this work to get multiple "traffic lights" for different pairs to get a quick overview

Indicator:
Attachment
  • #167
  • Feb 14, 2011 4:30am Feb 14, 2011 4:30am
Quoting Colostarr
Last week I had 4 triggers (+155 pips) no loosers.

The week before I had 5 triggers (+140 pips). one trade missed TP1 by .5 pips, it reversed and hit stop for -22 pips. 4 wins from 5 triggers.

So I guess you could say I average 4 to 5 trades with this method per week.
wow!!! I guess the only way to go is to master it, maybe i'm too much in a hurry to get to crux of it. I'll take my time...
  • #168
  • Feb 14, 2011 4:35am Feb 14, 2011 4:35am
Yes good catch! You are looking at the candles! Good Job! Now, because I am an aggressive trader and the difference between these 2 bars is .5 pips, I think I would still consider this a valid setup! If the current bar doesn't go any higher!

I currently already have a trade (buy stop) in for another method, and it is right around the same level as the triggers would be for small hours!


Quoting Blackeagle
Thanks for the explanation. So including the Sunday bar, what about your rule
# 2 ( The high of the most recently closed candle must be less than the HH5)? Current bar's (signal bar if it continues its sideway move) high is the HH5. Do yo still consider it as a valid signal bar?
  • #169
  • Feb 14, 2011 4:39am Feb 14, 2011 4:39am
If you are interested...here is a signal from another method on USDCHF.
Plot the trades and see where they fall...it should be right in the same area as the small hours triggers would be!

USDCHF

Buy stop: .9759
Stop loss: .9706
TP1: .9785
TP2: .9812
  • #170
  • Feb 14, 2011 4:40am Feb 14, 2011 4:40am
If only the EURUSD had been a valid setup...
  • #171
  • Feb 14, 2011 4:42am Feb 14, 2011 4:42am
Keep an eye on USDCHF it is about to trigger a trade from another method. I posted the numbers below! This pair is ready to go up!

Quoting angelofx
wow!!! I guess the only way to go is to master it, maybe i'm too much in a hurry to get to crux of it. I'll take my time...
  • #172
  • Feb 14, 2011 4:45am Feb 14, 2011 4:45am
it actually was a valid setup from a different method. I posted a signals post a few hours ago with limit orders...did you not see it? The GBPUSD is about to trigger as well! Go find the post where I posted signals!


Click this link put these limit / stops in before they trigger and it's too late
http://www.forexfactory.com/showthre...=280540&page=9

Quoting angelofx
If only the EURUSD had been a valid setup...
  • #173
  • Feb 14, 2011 4:55am Feb 14, 2011 4:55am
Quoting ido370
updated Small Hours traffic light
-added draw box around hh5-ll5
-atr and hh5 / ll5 levels show with 1 decimal
-middle light (for rule2) will switch color, if rule3 also have buy/sell signal

Indicator:
Attachment
Hi ido

Thank you for sharing the indicator. I tried to download the indicator but failed to get it.
  • #174
  • Feb 14, 2011 5:04am Feb 14, 2011 5:04am
Quoting Colostarr
it actually was a valid setup from a different method. I posted a signals post a few hours ago with limit orders...did you not see it? The GBPUSD is about to trigger as well! Go find the post where I posted signals!


Click this link put these limit / stops in before they trigger and it's too late
http://www.forexfactory.com/showthre...=280540&page=9
I did see it but i did not know what the system was. I am interested in your system. I think the USDCHF will trigger as per your rules in the NY session. (GBPUSD)I'll go check it out
  • #175
  • Feb 14, 2011 5:06am Feb 14, 2011 5:06am
Kopaszn,

I have loaded your indi up on a chart and I have a few observations:

I believe the setup bar, when closed counts as 1 of the 5 bar sequence.
- Sorry to Easyryder, (see post #120) you were correct!
I have therefore changed the variable to barnumber = 4.

Would it be possible to have your indi take account of the rule:
For valid down trend signal ~ 2. The low of the most recently closed candle is greater (higher) than the LL5
For valid up trend signal ~ 2. The high of the most recently closed candle must be less than the HH5

This would make it ideal for a visual backtest.

To determine whether we are in a Up trend or Down trend the indi would have to choose a SMA option, 20SMA or 40SMA or both?
ie Setup bar (the last closed bar) closes above SMA for Buy or below for Sell.
Colostarrs results has certainly got my attention!
Attached Image (click to enlarge)
Click to Enlarge Name: gbpusdh4 small hours.gif Size: 82 KB
  • #176
  • Feb 14, 2011 5:09am Feb 14, 2011 5:09am
Hi Colostarr,

Thanks for sharing the strategy.

Buy set up - The close of the most recently closed candle must be greater than the 20SMA or 40SMA (can be both)
Sell set up - The close of the setup bar must be less than the 20SMA or 40SMA (can be both)
How about when the closed set up candle is in between 20 SMA and 40 SMA. Which one we want to chose - buy or sell?
  • #177
  • Feb 14, 2011 5:15am Feb 14, 2011 5:15am
Quoting Colostarr
If you are interested...here is a signal from another method on USDCHF.
Plot the trades and see where they fall...it should be right in the same area as the small hours triggers would be!

USDCHF

Buy stop: .9759
Stop loss: .9706
TP1: .9785
TP2: .9812
My sentiments exactly!! but the fx world is relaxing now, waiting on the NY session.
  • #178
  • Feb 14, 2011 5:25am Feb 14, 2011 5:25am
Glad I could help 236dave! Keep an eye on USDCHF! It has gone sideways long enough...one rule is off by 1 pip...but I believe this pair coorelates pretty closely to EURUSD...I believe it will take off north after this candle closes!

Quoting 236dave
Kopaszn,

I have loaded your indi up on a chart and I have a few observations:

I believe the setup bar, when closed counts as 1 of the 5 bar sequence.
- Sorry to Easyryder, (see post #120) you were correct!
I have therefore changed the variable to barnumber = 4.

Would it be possible to have your indi take account of the rule:
For valid down trend signal ~ 2. The low of the most recently closed candle is greater (higher) than the LL5
For valid up trend signal ~ [b][i]2. The high of the most recently closed...
  • #179
  • Feb 14, 2011 5:30am Feb 14, 2011 5:30am
Colostarr,

According to my calculations, set up on USDCHF would be the following:

1.5x ATR= 0,0035
HH5-LL5= 0,0034

Buy Stop=0,9748
Stop Loss=0.9702

TP1= 0,9774
TP2= 0,9801 (may be better to cut it to 0,9798)

Is that correct ?

Thanks!
  • #180
  • Feb 14, 2011 5:35am Feb 14, 2011 5:35am
I have been waiting for someone to ask this question! Great question!

When this happens refer to rule #2: The High of the recently closed candle must be less than the highest high of the last 5 bars (up trend)

I have seen a few tight ranges that coould have gone either way.

When this is the case go with the over all trend! If the trend is up place stops and limits for a buy. If the over all trend is down, place stops and limits to sell. Choose one or the other, personally I wouldn't choose booth!

This happened to me last week. I went with the trend, it triggered and I had 45 pips in my pocket within an hour!

Quoting forexgame
Hi Colostarr,

Thanks for sharing the strategy.

Buy set up - The close of the most recently closed candle must be greater than the 20SMA or 40SMA (can be both)
Sell set up - The close of the setup bar must be less than the 20SMA or 40SMA (can be both)
How about when the closed set up candle is in between 20 SMA and 40 SMA. Which one we want to chose - buy or sell?
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