Range Bars and the impossible EA

Hi Guys,

Like most on this site, we are all looking for different ways of approaching the forex market.

I have been looking at range bar strategies for some time now, and have noticed something which may or may not work but I will describe it and then the coders or more experienced range bar traders amongst us can tell us if it possible or not.

I have included a jpeg of this simple idea.
It is last Fridays Euro/usd range bar chart with the range of each bar set to 8.

A lot of the range bars do not have any wick, ie they start and either move straight up or straight down. This is what the EA will exploit (if possible).

In the example posted, it shows an up bar, so the ea will go long once the price moves away from the open price by 0.5 pips. Ea will close trade at end of bar. Stop loss is 0.5 pips below the open. The EA will trade every bar.

The opposite for short applies.

On Friday there were 200 bars
56 were winners , so 56 x 7 pips
144 were losers, so 144 x 1 pip
Total won for the day is 248 pips.

Possible reasons why this only looks good on past charts and won't work in reality is speed of execution and slippage and spread.

Thanks for any response from the coders.

Slim

Hello,

If I may add something: if the range is set to be a higher number then the spread and speed of execution will not matter as much as with 8 pip bars. Although I don't know if your idea (which is very interesting btw) would also work on say 15 pip bars...

Sorry to interrupt, I cannot make EAs or anything, just thought this point could be of any help.

Cheers

hi csabz90,

thanks for a response, any one can chime in!

The larger the bar size the less these bars appear.

I have just changed the size to 15 as you have suggested and here is the result

56 bars
7 wins, so 7 x 14 = 98
49 loss, so 49 x 1 = 49
Total 49 pips gained

A huge difference to using the 8 bar range.

Thanks Jason

Ahh, I see.
Anyway, really great idea and I hope you will be able to find someone who can create this EA.

Regards,
Csabi

Hi Slim

Really stupid question, but how did you get range bars on Metatrader? Just curious

cheers

Hi again

How did you get on with your EA? I think you'll find that ALL of the bars do not have any wick on one side, because that is how range bars should work. Once the price has reached a level at either the top or bottom of the range, the current bar will close and a new bar open. (*Some* of the bars will not have any wick on either side - your pic shows this).

Re: your strategy. If the previous bar was long and you went long, things went well and the bar ended with equity +ve, why close the BUY/long order at the close of the bar, when the next bar might be a long as well? Then you'd have 3 UP bars in a row - sounds like a trend to me. Ie, let your winners run and cut your losers short. But what do I know? I'm a noob.....