Extracted Thread (per thread starter's request)

Hi FH, I'm curious about about how you handled the trade on the 7th, that looks like a tricky one. I'm glad I wasn't around for it

Hi Wolfeman, I am curious as well. I got bounced around a bit on the Dec 7th Box. I suspect it is just the nature of the beast during the rapid succession of news events on Dec 7th, which effected the G/U. I am glad that these types of news storms do not appear to happen very often. There is probably nothing that can be done, but there are many folks on this thread that are far more clever than I.

My (read personal) issues with Stairstep Breakouts is that:

1) I sometimes miss Breakouts, because I can not sit in front of my computer 24/7.

2) my Stop Loss and Take Profit strategy needs some work. As you can see from my Dec 2nd post, I caught the break out 10 pips late and ended up with a 1 pip profit.

This weekend I hope to have time to:

1) write a little indicator that will will give me an early warning that a Box is forming, so I am more likely to be near my computer at the right time.

2) Setup a smtp server so that I can get text messages from MetaTrader.

3) Try out the Tools for forexhard's Stairstep Breakouts system http://www.forexfactory.com/showthread.php?t=304770

4) Re-read this thread to see if I missed something about how others are handling the SL and TP for this strategy.

5) Do some SL and TP strategy back testing of my ideas (wild guesses).

For me, this is a big list, it might take a many weekends. I wish I had more taem.

I will keep you posted.

I hope this helps.

Sincerely,

Mi Tija

The thread already has dozens of examples of how I handle the majority of my breakouts, so I don't feel required to break down every pic I post lately since my techniques are spelled out elsewhere. But I will remind everyone that I do not limit myself to just the initial breakout, even though that alone is enough to profit from long term. This is why I do not promote the idea of "false breakouts". Because I am able to look past the intital breakout, and past any reversals, to focus on the longer term aspects of the trade. As such, I am willing to follow a trade even if it has 3 or 4 "bounces" or "reversals". Mer does exactly the same as me, and we both came to this method idependently.

Hi Forexhard,

Wow what a great strategy you have here. The backtesting looks almost too good to be true. I like how you don't try to give everyone exact instructions, because you're exactly right that everyone needs to trade in the style they're comfortable with. This is a hard lesson I have been learning lately.

I followed your advice and started doing backtesting on this system. Pair EURUSD, time 15-minutes. Using the BreakoutBox indicator I set the BoxLength to 30 and the BoxRange to 30, for the highest quality CZs. (Update - AutoBoxRange is on so I guess BoxRange is not relevant.) This gave me 1.3 boxes a week. The rest of the settings were left at their defaults. I'd be happy to hear any advice or comments about how I've tested trading the CZs.

First I tried just trading the initial breakout only. Once a candles closed outside of the buffer zone I opened a trade in that direction. I noticed that there were some great breakouts and that a 100 pip TP seemed best. I used a 15 pip SL. I ended up winning with this system over the last 6 months. However, there were too many losses and I felt that things could be improved. I ended up with only a few hundred pips in 6 months.

I then attempted a more aggressive system. I decided on a SL/TP of 25, as you talked about in one of your posts. Once the trade hit +15 pips, I would move the stop to breakeven. This saved me from a lot of losses, and did not significantly affect wins, so I felt that it was a good idea. If the trade either hit the SL or breakeven point, I would immediately open a trade in the opposite direction, using the same rules as the initial entry. I continued doing this until getting a winner. After getting the first winner (regardless of when it came), I would look for more trades. If the price returned to the breakout box and a candle closed inside it, I would trade in that direction. This gave me more winning trades and not many losers. I can see how increasing lot sizes after losses (carefully) might help this system, since you rarely see more than a few losses. I thought I saw a post where you talked about that. In the last 6 months on EURUSD I counted 4-5 consecutive losses max, and in those cases I was able to move the stop to breakeven on at least half the trades.

Bottom line this second strategy had a very high success rate, and you were absolutely correct in using the initial breakout area as a pivot point for trades going in the opposite direction. That increased the profits significantly. I'm looking forward to more backtesting and using this system. I've had enough of the overly complicated and convoluted strategies here in the forums. As you said in your initial post, everyone wants bells and whistles, but I could care less, I just want to make money! Thanks to squalou as well for the awesome indicator, it's an impressive piece of code.

Great post. What can I say? You're on exactly the right track. You're putting in the time necessary and you are already beginning to see the potential. Thanks for trusting me enough to give the SSBO system your time and attention.

Backtesting will only get you so far. My only advice for you at this point would be to open a penny account and start trading live. Risking .01 over 25 pips will mean you are risking just $2.50 per trade, plus spread. It's the lowest you can go, and working with real money will always improve and challenge your trading style.

Good luck!

Merry Christmas to you - and we hope the New Year brings you nothing but the best!

Dear forexhard, thank you for sharing your superb trading system. Here are my last two trades. All the best in the New Year.

Hi Forexhard,

I havent finished reading through the whole thread yet and the temptation to jump ahead is driving me crazy. I'm not new at all to forex and like many others have been blinded by indicators littering my charts and then came across your thread when I wanted to simplify things. So far though I have managed to limit my losses to one very small (£300) account which mostly got blown due to a lot size error combined with a loss of broadband service.

What I am seeing is very appealing indeed, and I have spent several hours looking through nothing but PA, drawing the box and identifying CZ's.

I love what I see so much that I wanted to pop a reply onto the thread to say thanks and I'm looking forward to a few more days reading and learning and then putting things into practice.

However, when I downloaded the pdf on page 1 it wouldn't open and gave me a message saying it was corrupted. Is there somewhere else where it is posted? Sorted now I just downloaded again and no problem



Many thanks FH.

Evening,

Well, I've been playing around with the indicator for a couple of days now and loving it even more than I was in my previous post.

I wanted to share a little gem I found which you might like to try. As yet I haven't tested this further back than 100 days so far but wanted to share these particular settings. Unfortunately I havent got a screen shot so you will just have to try it for yourself

GBP/CHF - 30 mins (so don't forget to set your box time frame to 0)

Box length 20
Box range 30
Auto box Range false
Min bars outside BO 3

The reason I went for 3 bars outside BO is it cuts out a lot of signals and it seems to give a high confidence in that once the signal is generated it will continue in the direction of the trade for many many pips, with very few reversals and subsequent s/l triggers. I will backtest this manually over the weekend using an exit strategy of
TP1 = Fib level 2 + move S/L to BE
from there its TP 2 = Fib level 4 + move S/L to fib 2
and let the rest ride until the next CZ forms


May the pips be with you

HXTrader

hxtrader, I await your findings with interest.

It's good to see that people are still keeping this one alive - It certainly deserves it!

I'm currently half way through reading the whole thread, as I only came across it last week. I'm enjoying it immensely so far and will contribute more constructively once I've digested everything, and have tested the system more thoroughly.

Regards,

MP.

Squalou, I have a question about your fabulous indicator.

I am using v1.13 and saving the statistics file. However if you compare the stats file to the chart, there are boxes shown on the chart with breakouts that are missing from the stats file. For example, the Display Panel in my example shows 22 Buys and 26 Sells. But the stats file shows only 36 lines = 36 trades, leaving 8 trades missing.

Shouldn't all Buys and Sells be listed in the stats file? Or am I misinterpreting something? I've tried changing various settings but I can't get the stats file to match the chart.

For the sake of illustration I've kept things simple. These results were taken today on EURUSD M15 with default settings, except for setting CreateStatisticsFile to True. I've posted a screenshot of the Display panel and attached the stats file generated with these settings.

Note: I am aware that some CZs do not generate a trade signal, if a new CZ forms before a signal is given. These CZs are not included in this discussion.

Here are the 12 CZs missing from stats file, as shown on the chart (date/time of bar that completed the CZ):

2012.01.11 21:00 This BO went north for 117 pips max. Is it included in the Display Panel stat for
2012.01.02 18:45 went north for 124 pips max.
2011.12.28 09:00 went south 132 pips max.
2011.12.25 23:15 north +4 pips
2011.12.20 03:15 north 100 pips
2011.12.15 19:15 north +6 pips
2011.12.14 01:00 south 45 pips
2011.12.11 19:30 south for 341 pips max.
2011.11.23 01:00 south for 150 pips max
2011.11.18 02:00 north 122 pips max
2011.11.14 23:45 south 101 pips
2011.11.09 00:45 south 290 pips

I want to use this file as raw data to import into Excel. It's already in a perfect format,. I will use Excel to calculate the frequency and probability of hitting various TP and SL levels using various settings for the indi. This will allow me to create a template for analyzing any pair or TF.

Then I can tweak the indi, save the stats file, and import it into my template. My goal is to optimize my default entry settings based on historical probabilities. When I'm done I will be glad to share my results here.

I hope it's not too much trouble for you to take a look at this. Thanks again for creating such a great tool!

So (if this has worked) here is my first chart, I will be posting more over the coming days.

Anyway, you might guess from the chart that I tend to trade less frequently than many others seem to be doing but thats just my preference, so I tend to have less than 2 CZ's per week on mine.

For me it's all about quality CZ's. When I was reading through the thread a couple of things dawned on me.

Firstly I see a CZ like a coiled spring or the description I prefer is one of those elastic band powered polystyrene airplanes from when I was a kid. The more turns in the band (bars) and the tighter the band (range) the more 'energy' it gives the airplane. So I imagine myself turning this elastic band until it's near breaking point and then let go (this is the breakout point) the more energy (momentum) there is the further the plane flies and the faster it goes (the more pips you earn). Anyway enough reminiscing about my childhood.

Secondly, the better the quality of the CZ the less chance there is that you will get stopped out as there is a higher chance that the initial breakout will continue in that direction for many many pips.

Right onto the chart. I posted some settings the other day for this pair on this timeframe and I believe that the settings are the same. I will post more for this pair so you can see what I'm trying to achieve. You will also see that I get very few trades which subsequently get stopped out. By the way I will point out that I tend to set my intial stop at the opposite buffer line and not the opposite side of the box.

So with these settings I went back and manually tested over 100 days (i need to extend this to 200+ over the coming days. the results are as follows

22 Trades, 17 wins, 5 losses (win ratio 77%).
On an account of £2000 the return in that 100 days is 62% and that is based on a 2% risk.

That is just one pair, and I'm testing 2 others with good results too. Forexhard, this is a system which is absolute dynamite and it's so simple it's hard.

How can anyone not love this system, I dont even have a moving average on my charts anymore.

If your around FXhard, are these looking good?

I like your rubber band airplane analogy. You must be kinda young. When I was a kid those planes were made from balsa wood, not polystyrene!

Was your backtesting on GBPCHF M30, like the two charts you posted? I'm working to optimize profits on this method by testing different entries, SL and TP levels. I am not yet getting anywhere near 77% W/L ratio, so I would like to try your settings if you don't mind sharing them.

Impressive work that you have put in to this already very profitable strategy for which I'd like to thank you. I was having a lil trouble in spotting the Min bars outside the BO. I am attaching the screenshot for you better understanding... hope you could look into it rather point out where exactly to look for it within the indicator settings. Thanks in advance.

Regards

Raza

Open up the indicator in MetaEditor and make sure you are using the latest version of the indicator.

wich tf i can trade this system?
On tf 15 i have no a box?

See my post #1769. however, I'm not just taking 30 pips on each trade but have 4 TP levels between 50 - 200 pips.

I'm taking the stance of Forexhard here. Many times he requested that new people to the thread must read from post no.1. Everything you need to know is in the thread. It's only by reading through that you build the knowledge which is essential to use this strategy and make adjustments here and there to achieve the results you are looking for.

Happy reading.

Thanks bro, working nicely now