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A 5minute Inside Bar System

  • #1
  • First Post: Edited May 30, 2012 8:52am May 20, 2012 11:36pm | Edited May 30, 2012 8:52am
Here is a little system I'd like to share. It is something I came up with recently and I don't have any live trading results and have only completed some very minor manual backtesting.

It is a work in progress.


Chart setup:

1. Open a EUR/USD 5minute bar chart.
2. Place a vertical line at 6am GMT and a vertical line at 19:00 GMT. My broker is GMT+1 so I place the lines on my chart where the chart reads 7:00 and 20:00.
3. Wait for an inside bar to form.
3a. Trades are only taken between the times listed above in step 2.

Long entry:

4. IF the inside bar is bullish, place a pending buy order .5pips above the high.
5. Set Take profit to 3pips and Stop Loss to the low of the inside bar.
6. Risk no more than 1% of account balance on the trade.
7. The trade must trigger within 2 bars following the inside bar, otherwise the pending order is cancelled.


Short entry:

8. reverse above - IF the inside bar is bearish, place a pending sell order .5 pips below the low.
9. Set Take profit to 3pips and Stop Loss to the high of the inside bar.


EA Ideas.

It would be great to have an EA to trade this setup as the screentime is quite long. Custom inputs:

 

  1. set the start and end times
  2. money management functionality on/off. If off, then manual lotsize to be inputted
  3. max equity gain/loss %cutoff (to turn the EA off when a set total equity gain or loss for the day has been reached).
  4. have the stop loss equal to the range of the inside bar OR 9pips, whichever is smaller. this is to counter gaps/spikes during news and limit any resulting losses to 3%.



UPDATES:

just confirmed that Go Markets is actually GMT +2, so I'm looking at taking trades between 5am GMT and 18:00 GMT, which corresponds to 07:00-20:00 on my charts.

link to v1.2 EA by Ananthhh: http://www.forexfactory.com/showthre...38#post5702438 (27th May 2012)

30th May 2012 link to v1.3 EA can be found here: http://www.forexfactory.com/showthre...13#post5712813


If the inside bar has the same open and close, then a pending order is placed in the direction of the previous bar's close.

PLEASE NOTE ONE SHOULD NOT TRADE THE EA IN DEVELOPMENT ON A LIVE ACCOUNT. IT IS A WORK IN PROGRESS WITH VARIOUS BUGS DUE TO BE IRONED OUT. TRADING USING THE EA ON A LIVE ACCOUNT IS AT ONE'S OWN RISK.

  • #2
  • May 21, 2012 12:07am May 21, 2012 12:07am
purple boxes are winning trades. blue boxes are inside bars which didn't trigger.
Attached Image (click to enlarge)
Click to Enlarge Name: 18-5-2012.JPG Size: 70 KB
  • #3
  • May 21, 2012 4:42am May 21, 2012 4:42am
following the rules in post 1 above would have made a return of at least 5% a day every day last week
  • #4
  • May 21, 2012 5:03am May 21, 2012 5:03am
and also today by 11am GMT, despite 2 small losing trades as well.
Attached Image (click to enlarge)
Click to Enlarge Name: 21-5-2012a.JPG Size: 89 KB
  • #5
  • May 21, 2012 6:11am May 21, 2012 6:11am
You're an hour off on your time.
You're starting at 5:00 AM GMT.
  • #6
  • May 21, 2012 6:16am May 21, 2012 6:16am
Quoting billbss
You're an hour off on your time.
You're starting at 5:00 AM GMT.
really? I was under the impression my charts were GMT+1. I'm using GoMarkets. Either way, I'm looking at potential trades between the 7:00 and 20:00 on my MT4.

So I should change post 1 to read start at 5am GMT and finish 6pm GMT?
  • #7
  • May 21, 2012 6:19am May 21, 2012 6:19am
Quoting Trumpcard
really? I was under the impression my charts were GMT+1. I'm using GoMarkets. Either way, I'm looking at potential trades between the 7:00 and 20:00 on my MT4.

So I should change post 1 to read start at 5am GMT and finish 6pm GMT?

If that's what you want.

The chart you posted started at 5 AM GMT.
  • #8
  • May 21, 2012 6:34am May 21, 2012 6:34am
Quoting billbss
If that's what you want.

The chart you posted started at 5 AM GMT.
what I want actually is an EA to better forward test this
  • #9
  • May 21, 2012 7:06am May 21, 2012 7:06am
Take profit 3 pips ?? Dont you think its rather mad :}
  • #10
  • May 21, 2012 9:38am May 21, 2012 9:38am
Quoting Trumpcard
really? I was under the impression my charts were GMT+1. I'm using GoMarkets. Either way, I'm looking at potential trades between the 7:00 and 20:00 on my MT4.

So I should change post 1 to read start at 5am GMT and finish 6pm GMT?


what are your times based on london u.k. time ?

take profit 3 pips aint cutting it. your sl could well be 3-4 times that number. all you need is 2-3 losses in a row and you are thrown back to oblivion.

good luck anyway.
  • #11
  • May 21, 2012 10:45am May 21, 2012 10:45am
Quoting uberteh
Take profit 3 pips ?? Dont you think its rather mad :}
no I don't. Obviously this is a scalping system...
  • #12
  • May 21, 2012 10:52am May 21, 2012 10:52am
Quoting whatfx
what are your times based on london u.k. time ?

take profit 3 pips aint cutting it. your sl could well be 3-4 times that number. all you need is 2-3 losses in a row and you are thrown back to oblivion.

good luck anyway.

a 5 minute inside bar that has a range of 12 pips? where? based on your maths, if such a scenario happened (3 losses in a row, losing 4% of account balance each time) is not being thrown to oblivion.

$100 - 4% = $96. $96-4%........
  • #13
  • May 21, 2012 11:50am May 21, 2012 11:50am
Quoting Trumpcard
a 5 minute inside bar that has a range of 12 pips? where? based on your maths, if such a scenario happened (3 losses in a row, losing 4% of account balance each time) is not being thrown to oblivion.

$100 - 4% = $96. $96-4%........
a 5 min inside bar could well have a range of 12 pips, on a regular basis. especially during news release.

your method is just inside bar trading. during the london market.

anyway dont let me discourage you. go for it.
  • #14
  • Edited 1:43pm May 21, 2012 1:12pm | Edited 1:43pm
Quoting Trumpcard
what I want actually is an EA to better forward test this
Here is an EA.
This EA is built in 40 mins. So prone to error.
I didn't tested this EA too.
I didn't implement the emergency stoploss(I don't understand it).
If you need further modifications or any doubt in the parameters, don't hesitate to pm me.
PM me if you need source code(with reason).
Enjoy trading buddies.

Cheers
Ananth
Attached File(s)
File Type: ex4 insideBarEA v1.0.ex4   5 KB | 1,023 downloads
  • #15
  • May 21, 2012 9:29pm May 21, 2012 9:29pm
wow! thanks Ananth! Going to play around with this today and see how it looks. thanks for your contribution
  • #16
  • May 21, 2012 10:38pm May 21, 2012 10:38pm
hai TC, saw this thread yesterday, i'm a newbie in this forex business, and the simplicity of this system attract me to learn more. I've browse around to learn more about inside bar trading and if you dont mind I have several questions:

1. is there any particular reason to the following points:
a. why dont you use filter like higher TF trend or indicator (MAs, sigh etc) like in the other system?
b. why do you choose EU and M5 timeframe?
c. why do you choose scalping as a MM strategy (why dont go for long tail instead)?
d. about the choice of trading session, I'm not too familiar with the GMT difference, but I take it that you begin trading about 3 hour since London Open? any particular reason? I'm going to try your method since the beginning of London Open today. (its just because it will be convinient for me to trade the whole london session)

2. I stumble to DIBS thread, I notice you also participated in it several years back (I notice you have a trading journal too based on DIBS method)
so out of curiosity, I am wondering what made you decide to develop this new thread, whatever happen to your DIBS trading?

sorry for all these questions, its not that I doubt your system, as a newbie I just want to have a better understanding of the reasoning/parameter of your system

PS: sorry for my English, its not my native language
  • #17
  • May 21, 2012 11:17pm May 21, 2012 11:17pm
responses below:

Quoting bedul
hai TC, saw this thread yesterday, i'm a newbie in this forex business, and the simplicity of this system attract me to learn more. I've browse around to learn more about inside bar trading and if you dont mind I have several questions:

1. is there any particular reason to the following points:
a. why dont you use filter like higher TF trend or indicator (MAs, sigh etc) like in the other system?

my rules already incorporate 2 filters - time to trade and trade direction. more indicators will clutter things.

b. why do you choose EU and M5 timeframe? low spread, more potential trades

c. why do you choose scalping as a MM strategy (why dont go for long tail instead)?

personal choice

d. about the choice of trading session, I'm not too familiar with the GMT difference, but I take it that you begin trading about 3 hour since London Open? any particular reason? I'm going to try your method since the beginning of London Open today. (its just because it will be convinient for me to trade the whole london session)

i'm trying to capture intraday moves from European session to lunchtime New York

2. I stumble to DIBS thread, I notice you also participated in it several years back (I notice you have a trading journal too based on DIBS method)
so out of curiosity, I am wondering what made you decide to develop this new thread, whatever happen to your DIBS trading?

work committeewomen got in the way

sorry for all these questions, its not that I doubt your system, as a newbie I just want to have a better understanding of the reasoning/parameter of your system


I suggest doing a lot of reading in the newbie threads. good luck with your trading!

PS: sorry for my English, its not my native language
  • #18
  • May 21, 2012 11:18pm May 21, 2012 11:18pm
I agree with you that too many indicator is not a good thing

btw, after I look it up, I realize that your trading time of 6 am GMT starts now, that explain why you already standby

I will look for signals starting of now, will post the result later if I can
thanks
  • #19
  • May 21, 2012 11:22pm May 21, 2012 11:22pm
hi Ananthhh, I've loaded the EA but it didn't recognise the last 2 inside bars that formed over the past 11 bars.
  • #20
  • May 21, 2012 11:46pm May 21, 2012 11:46pm
MMMMMM..... Can anyone say CRASH & BURN...............
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