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  • #101
  • Jul 5, 2011 2:47pm Jul 5, 2011 2:47pm
Thanks FXreds!

Quoting FXreds
Not sure if I would be taking the long off this box, not much room up to the previous box low which may act as resistance again.

Still holding earlier short but will close above 6070 if we get back there.
  • #102
  • Jul 5, 2011 2:50pm Jul 5, 2011 2:50pm
Some of you caught this move. I know Roper did, and I think a few others did too. This is an absolutely textbook example of what I have been talking about. The example couldn't be any clearer. If you can follow what happened in this pic you now understand the starting point of my breakout system.

Yes, I said starting point. There are still several important steps I haven't gotten to yet. The next step will deal with reversals, and how to get out of them at BE, or even a small profit -- 99% of the time.

But that will not be for another message or two. Before we go any further, and because I see a following now of experienced and interested traders not just curious noobs, the next points of discussion will be why consolidations exist, and why breakouts are so reliable. (The reasons for each are interconnected.)

FH
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To improve is to change. To perfect, is to change often.
  • #103
  • Jul 5, 2011 2:59pm Jul 5, 2011 2:59pm
Quoting FXreds
Not sure if I would be taking the long off this box, not much room up to the previous box low which may act as resistance again.

Still holding earlier short but will close above 6070 if we get back there.
Gentlemen, there is no consolidation happening in these pics. There should therefore be no talk of possible entries; there aren't any. G/U M15 has NO consolidation at this time. Relax your trigger fingers. Stop over trading. It would be fantastic if they did, but these "perfect" consolidations do not happen on every swing. If you suppose they can, then you are simply projecting your personal wishes onto the chart, and soon you will start "seeing" potential entries where none exist. IMHO, you are already doing this.

For an example of really what to look for, you need go no further than my last message...
To improve is to change. To perfect, is to change often.
  • #104
  • Jul 5, 2011 3:07pm Jul 5, 2011 3:07pm
Quoting jmw1970
Hi All

....for those of you who are having difficulty getting the rectangle box to be the correct height/width etc. (although it is not that difficult!)

here is a simple script....
jmw, thanks for this. I haven't used it yet myself since creating the boxes is no trouble for me, but I hope some of the guys find it useful.

I can't code at all, but if you have some time I have a couple of ideas for an indicator similar to this that we could all use and benefit from. The base code already exists (thanks Hanover), it just needs a little tweaking. Pls PM if you can fit this in to your schedule.

FH
To improve is to change. To perfect, is to change often.
  • #105
  • Jul 5, 2011 3:11pm Jul 5, 2011 3:11pm
And I wake up to see I now have THREE vouchers! This means my vouchers are growing at 300% per day. Fantastic! Now, if only I could make my account grow that fast!
To improve is to change. To perfect, is to change often.
  • #106
  • Jul 5, 2011 3:12pm Jul 5, 2011 3:12pm
Fair point FXH and duly noted.

In terms of my reference to the box above it was more a reference to what had happened with PA in terms of the pullback from the swing down. I am still holding the short from earlier and will close if PA takes out the high of the pullback at 70. Drew the box around it just to highlight this, but of course you are abslutely correct that there is no relevant consolidation there.

Thanks and looking forward to the next steps.

Quoting forexhard
Gentlemen, there is no consolidation happening in these pics. There should therefore be no talk of possible entries; there aren't any. G/U M15 has NO consolidation at this time. Relax your trigger fingers. Stop over trading. It would be fantastic if they did, but these "perfect" consolidations do not happen on every swing. If you suppose they can, then you are simply projecting your personal wishes onto the chart, and soon you will start "seeing" potential entries where none exist. IMHO, you are already doing this.

For an example of really...
  • #107
  • Jul 5, 2011 3:39pm Jul 5, 2011 3:39pm
FXH you got me interested in this very simple and I was looking at all areas until you brought up the consolidation may be I missed it in the beginning. I do have a question do you enter manually or set limits and walk away, or does this depend on the trade?
  • #108
  • Jul 5, 2011 3:44pm Jul 5, 2011 3:44pm
Out of the short for +37.
  • #109
  • Jul 5, 2011 3:56pm Jul 5, 2011 3:56pm
Hi FH,
I afraid to ask dummy questions, but after backtesting a couple days, I still do not understand how to avoid false breakout and the entering rules. I meant, There may be some wicks above or below the box that will be triggered once a buy/sell stop order is placed couple pips outside the box...

I've re-read from page 1 and see you have not mentioned it.

Hope you can clarify your rules clearer. Do you use stop orders or open a position based on some PA candles?
  • #110
  • Jul 5, 2011 4:14pm Jul 5, 2011 4:14pm
new consolidation
  • #111
  • Jul 5, 2011 4:16pm Jul 5, 2011 4:16pm
FH, I just wanted to check - do you always have the box starting at the high/low of the move or at the close of the highest/ lowest candle? Just wondered because 30 pips from the close would often eliminate "false" breakouts like at 1.00pm (GMT) today.

Also, can I suggest having the 4 hour chart as a guide? I've attached my 4 hr chart (CET - central european time) which plainly shows bearish 12.00pm candle so 4.00pm thereabouts was a good time to open a short.


rgds
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  • #112
  • Jul 5, 2011 6:31pm Jul 5, 2011 6:31pm
Quoting kodflakes
FXH you got me interested in this very simple and I was looking at all areas until you brought up the consolidation may be I missed it in the beginning. I do have a question do you enter manually or set limits and walk away, or does this depend on the trade?
KF, thanks for the voucher.

It's a little early in the system yet to get into these types of questions. Please be patient as I try my best to unfold my system in the proper order. Answers to these types of questions are still several days out. Until then, I hope everyone is trying out their small boxes and is getting comfortable picking out CZ's (consolidation zones.)

Speaking of which, now one is shaping up on M15 Cable. Take a look...
To improve is to change. To perfect, is to change often.
  • #113
  • Edited 10:39pm Jul 5, 2011 6:39pm | Edited 10:39pm
Cable M15.

Anyone else paying attention to this?

Notice how I have the small box set to the left, so that there is room for extra bars to fit into the box. I think maybe 30 bars or so will fit in there.

30 M15 bars comes out to 7.5 hours, or nearly a third of a trading day. As FX traders we constantly work by the averages. Our very trading lives depend on averages. So it strikes me as pretty darn important when something occurs in a chart that overtakes 30% of a given day of trading.

I don't think I'm alone in this belief. I think the banks notice it as well. And I don't know about you guys, but I want to be the flea that's riding on the back of the big bank dogs as they decide what to do in answer to this dilemma.
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To improve is to change. To perfect, is to change often.
  • #114
  • Jul 5, 2011 6:59pm Jul 5, 2011 6:59pm
Quoting jmtini
FH, I just wanted to check - do you always have the box starting at the high/low of the move or at the close of the highest/ lowest candle?...

rgds
My system ignores times of day. This is absolutely intentional. CZ's don't know what time it is, so neither should we. Time-based breakout systems (London, NY, Tokyo) are self-limiting. And it is this self-limiting nature that causes problems like "false breakouts", not the idea of a breakout system in and of itself.

And personally I wish that phrase didn't exist. There is no such thing as a false breakout. There is only a breakout that hit your SL before it hit your TP. Traders that use phrases like false breakout are trying to shift the blame for their losses. They are also the kinds of traders that hop on a new system every week looking for the Holy Grail, and don't know how to handle their repeated disappointments. So they come up with catchy phrases to hide their failures behind.

If you notice, I have not used this phrase once myself, and I have tried to stop everyone else from focusing on it that has brought it up. Why? Because they just don't exist for me. I know why I get stopped out some times, but I never call it a false breakout. And I also have responses for when I do get stopped out -- which I'll talk more about as time goes on. But for now (and I hope everyone is seeing this in my messages by now) not only am I trying my best to educate, but I must also first make you UNlearn much of what you think you already know about breakouts. So until then it's onward slow and steady as we all take baby steps together.

FH
To improve is to change. To perfect, is to change often.
  • #115
  • Jul 5, 2011 7:00pm Jul 5, 2011 7:00pm
  •  Megara
  • | Joined Sep 2009 | Status: MOMENTUM'S THE GODFATHER OF TRADING | 759 Posts
Quoting forexhard
Hello Kevin. Thanks for the kind words.

Yes, simple is always best. If more new traders realized how much all those indicators don't help, they would toss them out and start making real pips almost immediately. You are on the right track, at least! Good for you.

The system I am describing here could be compared to Inside Bars. I am using M15, but if you are trading IB's on H4 it basically comes out to the same philosophy, although my method here is a little more flexible than a very strict IB style. But when you consider that there...
-------------
Ahhh! Allow me to describe into picture and I could understand what you've written better.
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Shake it off!Lick the Wound,Prey Again!
  • #116
  • Jul 5, 2011 7:05pm Jul 5, 2011 7:05pm
Quoting Megara
-------------
Ahhh! Allow me to describe into picture and I could understand what you've written better.
Exactly. Easy, once you know how.

btw, thanks for the voucher!

FH
To improve is to change. To perfect, is to change often.
  • #117
  • Jul 5, 2011 7:14pm Jul 5, 2011 7:14pm
  •  Megara
  • | Joined Sep 2009 | Status: MOMENTUM'S THE GODFATHER OF TRADING | 759 Posts
And during CZ is where all the profit would be robbed by the bank and therefore no trade for now and wait for the next breakout.
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Shake it off!Lick the Wound,Prey Again!
  • #118
  • Jul 6, 2011 2:17am Jul 6, 2011 2:17am
good morning

This is from yesterday before I left.


session in Japan also have been breaking but at that time I sleep

have wanted to occur a strong tendency to see if I can detect false signals

3 of 3
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  • #119
  • Jul 6, 2011 2:18am Jul 6, 2011 2:18am
Hi FH,

I have a question about the price "turning back". From the chat the consolidation happened at broker time 07/05, 21:45 till 07/06, 04:30 the price break out for long. however at 07/06, 09:30 (arrow pointed) sell trigger base on box drew few hours ago.

Base on this thread, is it a valid break out? Sorry to my broken english and perhaps you able to understand my question. Thank you.
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  • #120
  • Jul 6, 2011 2:44am Jul 6, 2011 2:44am
Here's the set-up you guys are noticing. And I'm glad you are. It shows that you are catching on to my system. This feels great, and it will allow me the freedom to introduce you all to the next steps. There is much more to come. When I'm not here I'm writing up the details in my spare time, so bear with me please.

Anyway, back to this particular breakout. According to my chart this would have been worth about 21 pips. Is that a "false breakout" (hate that phrase!!!)? I guess it depends on your perspective. To a small time spot trader using penny lots, earning just $5 or $10 seems like nothing. To a fund manager trading 50 full lots (or more), 21 pips is like finding a suitcase full of gold bullion. So I guess it depends. To me a breakout only completely fails if PA reverses before I've made back the spread. So long as I pay for the spread and the trade ends up not taking anything from my account balance, then even if I don't profit I can't say that it has completely failed.

But it doesn't stop there. I promise there is much more to come. The trade pictured here would have made another 30 pips at least, according to rules I haven't told you about yet. I ask for your patience. There are exciting things in the works now behind the scenes for the thread that will benefit everyone, thanks to the generosity of a coder following my system.

Slow and steady wins the race!

FH
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To improve is to change. To perfect, is to change often.
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