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  • #341
  • Jul 13, 2011 1:55pm Jul 13, 2011 1:55pm
Hello Everyone,
I'm feeling a little constrained on this thread. I have tried to post clean charts with consolidation boxes, but it does mean I have to wipe what I have on a posted chart, and then replace it because I also use other tools (but no deceptive indicators at the bottom). I consider myself a price action trader with helpers (just like boxes are helpers). On my charts are boxes, Bollinger Bands S/R lines and a couple of moving averages. Oh yes, and you may see fib retracement lines. You see, I don't live by consolidation boxes alone, and even Forexhard uses other methods according to his profile. I'm thinking of starting a new thread on combining price action methods. What do you think?
I like my consolidation boxes to be neat and tidy. they seem to be more reliable, but then time interferes, like last night (Pacific time) the breakout happened when I was asleep, but not to worry a perfect fib retracement occured when I got up just after NY opened (made a 100 pips). The attached chart shows the activity. By the way, when the bollinger bands start contracting, it indicates a consolidation is underway.
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  • #342
  • Jul 13, 2011 2:58pm Jul 13, 2011 2:58pm
Quoting spacePip
Price certainly likes returning to CZ areas, If we form a new CZ here I would be interested in a break back down towards the Zone formed earlier today.
Yes, great examples of supply and demand in action, selling at Retail prices and buying at wholesale.
  • #343
  • Jul 13, 2011 5:40pm Jul 13, 2011 5:40pm
Missed this one EUR/AUD
Attached Image (click to enlarge)
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  • #344
  • Jul 13, 2011 8:02pm Jul 13, 2011 8:02pm
Quoting duffy
........and here we have a nice breakout trade.

I've highlighted a few other things that caught my attention.

Di
What I found interesting in your chart Di, is that the market seems to zone in in the area highlighted in yellow and then the actual consolidation happens in the blue area.

Nice breakout indeed - thanks to Mr Bernanke.
  • #345
  • Jul 13, 2011 8:36pm Jul 13, 2011 8:36pm
Here's a look at my way of thinking re the Gbp / Usd through the eyes of "the market has spoken, were you listening" that rings so true to me.

I didn't like the pattern shown in boxes 1, 2 and 3 so I was not even at the starting gate for the first breakout above box 3.

I've marked on the chart what I believe the charts is telling me. This decision has been made without reference to any indicator which could possibly distract me down another path.

Just my view.

Would love to see forexhard return, but maybe we need some more thread contributors.


Di
Attached Image (click to enlarge)
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  • #346
  • Jul 13, 2011 11:09pm Jul 13, 2011 11:09pm
I went out to coffee with some traders without finishing the story. (It helps maintain sanity.)

You need an idea of where to take profits, so I have added two possibilities for you.

Do you ever think about the guys in years gone by who traded just by reading the Ticker? I have great admiration for them. We are so fortunate to live in this computer age and have access to the internet


Di
Attached Image (click to enlarge)
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  • #347
  • Jul 14, 2011 8:52am Jul 14, 2011 8:52am
saw the breakout here a little late and then I noticed bernie is getting ready so I got out but here is a good place for a breakout on the bottom is a better pic of it
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  • #348
  • Jul 14, 2011 9:08am Jul 14, 2011 9:08am
Hmmm...always interesting how people interpret charts...

look at Duffy's chart (or kornflakes also):

See the "breakout" between the "channels" (marked yellow/ blue) in their charts.

So one says: No breakout. Why ? because it doesn't work. Got it. But wait ! How can I know before false breakout ? You can't. Got it. But IF I enter trade I would have lost money ! -Right. Got it.

But how do I filter these trades ? You cannot. Ok, got it. Does this makes sense at all ? May be. Ok...

Breakouts are fine but you need exactly how to filter loosers. Else you will never earn money on Forex. Market too well balanced.
Lot's of trades betray themselves by taking one trade and leaving the other, making their balance go up or down strongly. If they would take all trades they would soon realize that there strategy...just don't work.
It's like drivin' a car hypothetically without knowing gas stations.

Sorry, I just wonder Jack
  • #349
  • Jul 14, 2011 9:48am Jul 14, 2011 9:48am
Going long
Attached Image (click to enlarge)
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  • #350
  • Jul 14, 2011 10:12am Jul 14, 2011 10:12am
Quoting JackintheBox
Breakouts are fine but you need exactly how to filter loosers. Else you will never earn money on Forex. Market too well balanced.
I agree with your thoughts, if traded blind it's at best zero-sum. What 'edges' are people using to make money from this?...mine is to trade out of consolidation only at strong areas of support (demand) / resistance (supply).
  • #351
  • Jul 14, 2011 10:32am Jul 14, 2011 10:32am
Hi sidefx,

I would agree with trading from supply / demand areas. I think Forexhard was showing this area with his big box artifact. I have also noticed the best of these breakout trades tend to occur around the open or close of the different sessions. The move posted above could be profit taking from yesterdays big down move.

Kurt

Quoting sidefx
I agree with your thoughts, if traded blind it's at best zero-sum. What 'edges' are people using to make money from this?...mine is to trade out of consolidation only at strong areas of support (demand) / resistance (supply).
  • #352
  • Jul 14, 2011 10:35am Jul 14, 2011 10:35am
Trade closed at round number for +20
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  • #353
  • Jul 14, 2011 11:22am Jul 14, 2011 11:22am
JackintheBox,

All good points your raise, now how would you filter the method? Please share with us wondering minds. Sidefx shared how he & I filter this method, but nothing is 100%. Thanks in advance.

___________________________
  • #354
  • Jul 14, 2011 12:17pm Jul 14, 2011 12:17pm
Hello traders,

this is my first post to this topic. First of all I should say that I also like pure price action strategies. For one week I am trying to develop a method for CZ breakouts mentioned here. I attached a chart to clearly express my question. Often when price breaks through CZ, it comes back into CZ and then if it continues its firstbreakout direction (or completely reverses). If we move our stop to the upper channel (as seen in the attached USDCHF chart) we get nothing, we do not gain, we do not lose. If we keep SL at the lower line then we risk some pips because the trade first goes in our direction by 10-15 pips and then comes back to CZ. What is other traders' strategy about this?

If forexhard continues to write (I hope so) I think he has a lot to say. He wanted that long CZ box for a reason but he could not finish his whole strategy.
Attached Image (click to enlarge)
Click to Enlarge Name: USDCHF-July 14 2011-15min.PNG Size: 30 KB
  • #355
  • Jul 14, 2011 6:54pm Jul 14, 2011 6:54pm
Quoting Lanes110
Often when price breaks through CZ, it comes back into CZ and then if it continues its firstbreakout direction (or completely reverses). If we move our stop to the upper channel (as seen in the attached USDCHF chart) we get nothing, we do not gain, we do not lose. If we keep SL at the lower line then we risk some pips because the trade first goes in our direction by 10-15 pips and then comes back to CZ. What is other traders' strategy about this?

If forexhard continues to write (I hope so) I think he has a lot to say. He wanted that long CZ box...
The best breaks from consolidation are those that move away with strong momentum and these tend to be found at key support/resistance levels. It suits me to keep the stop in the original position until further support/resistance levels are created as the trade progresses, i don't rush to move stops to breakeven. As new S/R is printed the stops are trailed up/down, so i let price action take the trade out rather than having pre-determined targets. There are clearly times when initial stoplosses are filled after a false break, that's just the nature of the game. Taking care to select CZs at the stronger supply/demand levels increases the win rate and helps to reduce over-trading. Good luck and good trading.
  • #356
  • Jul 14, 2011 9:02pm Jul 14, 2011 9:02pm
Quoting JackintheBox
Hmmm...always interesting how people interpret charts...

look at Duffy's chart (or kornflakes also):

See the "breakout" between the "channels" (marked yellow/ blue) in their charts.

So one says: No breakout. Why ? because it doesn't work. Got it. But wait ! How can I know before false breakout ? You can't. Got it. But IF I enter trade I would have lost money ! -Right. Got it.

But how do I filter these trades ? You cannot. Ok, got it. Does this makes sense at all ? May be. Ok...
I guess that is where FH said it is up to us to pick and choose the best CZ that work for us. It's a matter of being patient and see what works for the individual trader. What works for FH might not work for others and vice versa.

I always find it amazing how many different ways you can interpret the same chart and even if you people enter at the same price, some make a profit whilst for others it is a losing trade.
  • #357
  • Jul 15, 2011 12:37am Jul 15, 2011 12:37am
Quoting hometrading
I always find it amazing how many different ways you can interpret the same chart and even if you people enter at the same price, some make a profit whilst for others it is a losing trade.
Everyone should post this statement on their monitors, to understand that ultimately it is not the system that makes the money. For every profitable trader out there they don't all trade the exact same entries / exits, therefore, it can't be the system perse that is the thing that makes a trader profitable.

Don't get me wrong you need to find positive expectancy, but you need to understand what you can control in a trade, and that is money mangement & risk/reward (once you enter, no matter why/how - whether PA, CZ, random, Indi's, you can only control the risk from here because you don't know if the trade will be profitable the minute you press the buy / sell button).

If you can control the money management & risk/reward, and you have a genuine positive expectancy, based on a good sample of trades, then it doesn't matter what happens on each individual trade because you know over the long term you will be profitable if you manage what you can control, once you enter a trade.

The guy who I consider my mentor has a saying " the next 1000 trades". Very simple but how many really follow that, not many because not many know if what they are trading has a positive expectancy therefore they live by individuals trades and after a few losses give up and move to the next system in this forum.

If the trader really understood positive expectancy of their system parameters, a few losing trades in a row might be acceptable in the boundaries of what there trading.

My question is, does anyone on this thread know if this system has positive expectancy over a large sample of trades? If not can anyone seriously trade this or any other system confidently live without knowing this?

And I have no issues with this system as I trade one very similar but I know my expectancy stats.

Good luck with your trading..
  • #358
  • Jul 15, 2011 3:55am Jul 15, 2011 3:55am
ciscosmithy,

You are so correct with post #358. Controlling the risk is one key to success in trading & a most important key as well. Before I enter a trade the first thing I start considering is how much risk am I willing to take with this trade & each time the conclusion is take the least amount of risk as possible.
At this time I too am trading a method similar to this & it is working very well for me. It is a matter of what each trader is comfortable with & how well he or she understands the mechanics of the method, again it all comes down to the individual trader & their mindset. Richard Dennis & the Turtle Traders comes to mind.

I would encourage Forexhard to return & keep moving this very good thread along. I would also encourage those that find fault with this method to go out & develope your own method that works for you.

__________________________________
  • #359
  • Edited 6:49pm Jul 18, 2011 6:16pm | Edited 6:49pm
Here is a little toy to back up sq's fantastic indi. Lovely one sq; fantastic yet again.

So, the scenario is this:

 

  1. sq's indi has drawn the breakout box for us and we are awaiting the breakout.
  2. we have to leave our computer for a while, for whatever reasons.

Here is where the Waiting EA comes in. Drag it onto the chart and it will monitor the situation and enter a trade only when a breakout occurs. It will also enter a trade if the box was back in the past and the market has retraced into, or bounced off, one of the outer limits of the box. It will trade either direction; breakout is breakout. If you want extra trend filters etc, then this EA is not for you.

The EA waits for the opening of a new candle before looking for a trade. It will only initiate a trade if the previous candle's hi-lo touched or was inside the box and closed outside it. Therefore, only use the EA when you are prepared to trade a breakout from/bounce off the box.

The inputs:

 

  1. CriminalIsECN: set this to true if your crim does not allow you to send tp/sl with the initial trade. Bastards.
  2. UseSafetyFeature: this demands confirmation that it the EA should operate after every platform restart. Set this to false to semi-automate repeated trades after breakouts from the initial box.
  3. sq inputs should match those you send with sq's indi
  4. Leave TakeProfit to 0 to allow the EA to use ATR to set the take profit. I leave you to guess what the inputs are about.

Don't use this ea on live accounts just yet. Give it a day on demo to make sure there are no bugs. The code is child's play, but I am an idiot.

Thanks sq for a fantastic indi.

Thanks forexhard for a trading method that addresses the reason I always previously hated breakout strategies. Ok, so I should have thought of it myself, but I didn't. The simple ideas are the ones that require genius to come up with. Breathtaking.

Attached File(s)
File Type: mq4 forexhard Waiting EA by Steve Hopwood.mq4   8 KB | 1,345 downloads
  • #360
  • Jul 19, 2011 3:51am Jul 19, 2011 3:51am
Steve,

Your coding skills & ideas never cease to amaze me.
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