Stairstep trading using the SQ dynamic indicator

Back to highschool. I thought this topic was aimed at learning some "additional" / "improved" methods of trading stairstep breakouts. ( where others are supposed to give some relevant feedback !)

Not that I use stairstep breakout system but it's annoying me 4 pages are dedicated to worthless ranting on people. I begin to more and more realize why 95% of the traders fail because in the end their personal attitude is reflected in trading.

Just publish the precise orders for EURUSD 3 boxes in a row. (market, stop, limit, time, price, SL, PT, SL + BE, trailing stop ...)

Here's an idea you may want to explore with regard to the CZs. It was suggested to me in a PM from a trader who has a very good grasp of price action and a heck of a lot more experience than me.

Change the buffer pips in the indicator to a negative value with a bigger box and "MinBarsClosedOutsideBO" to zero. So if you have a 40 pips high CZ, you could set the buffer to -30 and trade inside the box towards the other edge. This way if there is a breakout, you are already in the trade and in profit. If it turns out to be a false breakout, as it often does, it matters less because you are already in profit and have a much better chance to move to break even.

I only back-tested this for a couple of weeks of data and forward tested for no more than a couple of days, but it did seem to be considerably better than the original break-out system.

PB

Hi Calstar, good luck with the thread. I've found the Gann Hi-Lo indicator along with Laguerre/Fisher transforms do a great job to filter false breakouts. Lately, have been looking at how overall market correlation can be used to trade a single pair. see the attached. Correlations tend to 0 out before a big move starts

Good explanation, easy to understand. Keep going.

Ok so as metntioned on the previous posts charts still need to recover from low liquidity the previous 2 days. None the less here is what I think I will look for today.

If we look at the 4hr chart we were rejected from horizontal resitance and failed to over take the 100ma. So if I am looking at a long thats a negative.

Looking at the 4 hour chart we also see an upward trendline which is forming the triangle on the 4hour. And we have nice horizontal support at 1.5800 this has formed a channel of about 100 pips.

Here are the charts I beleive longer time frame more signifigant the support or resistance

So looking at 15 minute chart as I write this the 22 pip channel has broken down and fell just short of the projected break target of 22 pips. That rule is thats a break of a channel will result in a run of that equal to the width of a channel

Im going to look for consolidation between 1.5867 and 1.5845 which will develop another 22 pip channel. I will then look for a break lower of that channel sending price back down to 1.5823 where the 4hr trendline resides.

I will look to go long on a succesful test of that trendline with a stop below the bottom of the 4 hr channel. About 1.5794 in case they test the channel bottom.

My target on the trade will be 1.5890 which is the top of the 4 hr channel. The risk reward on this trade is about 4-1 give or take so resonable. I believe there is a logic behind this trade which is another reason I like it


Larger players in the market use longer time frames for their entry and exits since they dont have the time to sit and watch one trade all day long. So yes this is a logical trade since I will most likely be trading with the larger players.

So lets see what happens

I would like to thank everyone for there input etc I will try and get to all of your posts ans respond in time still trying to work out some rules for the system that we can all trade by.
Thanks in advance for your patience

Calstar

The SQ indi Shows a 24 pip channel also which fits the plan for a break and test if the trend line

Ok so breaqk of CZ has reached projected break point. I did not take this trade as my plan has been posted and Iam waiting for that trade.

As I write this the trade has gone past the projected break point and a fiob trace from the high of the channel that broke to teh bottom puts the 50 fib on the entry point. so a stop loss there might be a good idea

I have attached 2 charts both 15 minute time frames the first shows the Sq set at 22/15/30 false which has shown an area of good support.

The second shows the settings of 1/240/30/false

This second chart potential for a nice scalping system. where we could use the bottom of the previous step as a stop loss.

The indicator actually signaled a long with the default settings of 22/15/30 true. Unfortunately it is currently in the red. I decided to take a short trade and will post my logic for that trae shortly.

So far if we had followed the signals from the SQ indicator blindly we would have a 3 pip gain( 6 - 3pip spread) and a possibly a 7 pip gain on the long signal provided you are outof it already.

Ok so after the intial channel break and run down in asia, price consolidated back into the orignal range. It failed to make a new high and a down trend has started to form. I sold just before the break of the channel bottom at 1.5866. Partly based on the suggestion earlier in the thread of selling a CZ top rejection and buying off a CZ bottom hold.

Price was rejected at the trendline that formed BEFORE my trade was taken. I did not take the trade and then form the trend line. That under my rules is trying to make a trade not waiting for one.

My stop is above the CZ top at 1.5890 for a risk of 23 pips My target is the 4 hour trend line at 1.5823. I will move the stop to even on a break of the projected channel run at 1.5841.

Should price get to the trendline support at 1.5823 I will move the stop to 1.5841 and target the 4hr channel bottom located at 1.5799. Where I wil look to initiate the original trade plan posted earlier.

This is a counter trend trade ( per the the trend on the 4hr chart ) so I want my stops to be tight. I have also cut my risk in half. My normal ratio is $1.00 per thousand in equity. Counter trend trades can be productive but come with much more risk. Doesn't make sense to bet the farm. If the trade hits yes I only made half as much, but if it doesnt I only lose half as much.
Since my primary trade plan is to get long off of 4hr support if the counter trade works I have pips in the bank to risk on that trade.

Hope that helps explain the trade taken

The chart

Not the type of candle I like to see when taking a counter trend trade OH well

Well we stopped out on our counter trend trade for a 23 pip loss. We are now long on the trend on the break of the channel from last night. Target in this trade 30 pips the (the distance of the current channel). Since this is not counter trend the trade is taken at my normal leverage of $1.00 per 1000 of equity.

Thanks

current long

Ok so I am still long my gbp trade from earlier in the day but first and update of charts.

The settings again for the indi are as follows.

22/15/30/true