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Attachments: Daily and H4 engulfing price action
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Daily and H4 engulfing price action

  • #61
  • Jun 9, 2013 7:41pm Jun 9, 2013 7:41pm
Thanks again AndyG. The only thing that gets in the way is the potential drawdown. If you could mentally ride out 5 or 7 losses then you should be doing ok. It would just be disheartening if you began on a month with some losses back to back. Otherwise I like the simplicity of it all.

If you want to put the updated spread sheet up, I would like to get a look at it.

If not, that's cool! jt
"Even if you fall down face first, you still went forward."
  • #62
  • Jun 10, 2013 12:20am Jun 10, 2013 12:20am
Quoting AndyG
@AhmadYt and juicyt Thank you for your comments. The bars in question are quite easy to identify manually but if you wanted to backtest a longer period it may be useful to have an EA to identify them for you - if some kind soul would oblige . As a slight addition to my earlier spreadsheet I have backtested 4 other pairs (GBPJPY, AUSUSD, EURJPY & EURAUD) in the same manner and for the same period and the results are as follows. Pair Pips win% GBPJPY 2085 80 AUSUSD 107 50 (doesn't seem to suit this method - but still positive!) EURJPY 1334 72.7...

Hi AndyG,

Thank you for sharing your ideas... I like it because it is simple and clear. I will take your ideas to write your rules as an example in the Progress system if you don't mind although it is not very clear for the SL and TP . I will do a backtest and keep you informed ;-)
  • #63
  • Jun 10, 2013 12:24am Jun 10, 2013 12:24am
Quoting AndyG
@AhmadYt and juicyt Thank you for your comments. The bars in question are quite easy to identify manually but if you wanted to backtest a longer period it may be useful to have an EA to identify them for you - if some kind soul would oblige . As a slight addition to my earlier spreadsheet I have backtested 4 other pairs (GBPJPY, AUSUSD, EURJPY & EURAUD) in the same manner and for the same period and the results are as follows. Pair Pips win% GBPJPY 2085 80 AUSUSD 107 50 (doesn't seem to suit this method - but still positive!) EURJPY 1334 72.7...
Thank you for taking the time Andy
I have a couple of questions though

What is your definition of an engulfing bar?
The expiry date of the trades is only one day?
What if trades overlap?
Your SL/TP is equal to high - low OR from where the 4h bar closes to the high/low?

Much appreciated
  • #64
  • Jun 10, 2013 3:48am Jun 10, 2013 3:48am
Quoting juicyt
Thanks again AndyG. The only thing that gets in the way is the potential drawdown. If you could mentally ride out 5 or 7 losses then you should be doing ok. It would just be disheartening if you began on a month with some losses back to back. Otherwise I like the simplicity of it all. If you want to put the updated spread sheet up, I would like to get a look at it. If not, that's cool! jt
juicyt, I am at work at the moment but will upload updated spreadsheet when I get home.
AndyG
  • #65
  • Jun 10, 2013 3:57am Jun 10, 2013 3:57am
Quoting AhmadYt
{quote} Thank you for taking the time Andy I have a couple of questions though What is your definition of an engulfing bar? The expiry date of the trades is only one day? What if trades overlap? Your SL/TP is equal to high - low OR from where the 4h bar closes to the high/low? Much appreciated
This is what Andy wrote in his very first post:

Quoting AndyG
For the purposes of this method an engulfing bar is one where the open and close engulf the open and close of the previous bar.
It doesn't matter how anybody else defines an engulfing bar, above is how Andy defines it in this system.

Also anybody who is serious about trading this method or for that matter any other method, should do their due diligence and back test and tweak the method for themselves. This will give you the confidence you will need to trade the system. Andy has provided the idea, now take it away and make it your own. It is said that sometimes "Opportunity comes dressed in overalls and looks a lot like hard work" .
  • #66
  • Jun 10, 2013 3:57am Jun 10, 2013 3:57am
Quoting Jurex
{quote} Hi AndyG, Thank you for sharing your ideas... I like it because it is simple and clear. I will take your ideas to write your rules as an example in the Progress system if you don't mind although it is not very clear for the SL and TP . I will do a backtest and keep you informed ;-)
Hello Jurex, thank you for you interest. For the prupose of the backtest done, SL goes at the high or low of the daily engulfing bar and TP is the same value of pips from the trigger H4 open to the SL i.e. SL=TP. When I get home from work I will attach a chart to explain better.
AndyG
  • #67
  • Jun 10, 2013 11:33am Jun 10, 2013 11:33am
Quoting AndyG
{quote} juicyt, I am at work at the moment but will upload updated spreadsheet when I get home. AndyG
As promised earlier please find attached the amended spreadsheet with 8 pairs backtest.
AndyG
Attached File(s)
File Type: xlsx D1 & H4 PIP COUNT.xlsx   28 KB | 511 downloads
  • #68
  • Jun 10, 2013 12:34pm Jun 10, 2013 12:34pm
Quoting AndyG
{quote} Hello Jurex, thank you for you interest. For the prupose of the backtest done, SL goes at the high or low of the daily engulfing bar and TP is the same value of pips from the trigger H4 open to the SL i.e. SL=TP. When I get home from work I will attach a chart to explain better. AndyG
Hello Jurex, as promised attached is a chart of GBPUSD to illustrate my analysis method used for the backtest (GMT+2). This is one for 5th June as recorded in my spreadsheet. I trust it is self explanatory.
AndyG
Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSD H4.jpg Size: 226 KB
  • #69
  • Jun 10, 2013 12:43pm Jun 10, 2013 12:43pm
How long do you wait to trigger the trade after engalfing day? Only during the next day or longer?
  • #70
  • Jun 10, 2013 12:52pm Jun 10, 2013 12:52pm
Hi everyone,
I rather like this Andy, it has hope. Currently i noticed XAU has a sell potential
The first image is the daily
The second is h4 with rectangle showing engulfing area, and dotted orange line is where we await a h4 to close below and then insert sell limit
I read most of the posts. I would like to suggest using ATR of 100 bars to give an idea of range and thus use this number as a T1, if the target is less, trade more pairs just not all at the same time such as manage exposure to USD risk.
So for XAU i suggest T1 110 pips see ATR 100 days
Attached Images
  • #71
  • Jun 10, 2013 12:53pm Jun 10, 2013 12:53pm
Quoting Dezil
How long do you wait to trigger the trade after engalfing day? Only during the next day or longer?
Hello Dezil, thank you for your post and I appreciate the question.

I am going to give an answer that I don't like to get...............it depends! I think it is better if the trigger H4 close comes the day after the Daily engulfing, probably due to momentum/continuation etc. Having said that they can happen two or three days after - see attached recent EURUSD trades. However, for the purposes of the backtest I discounted anything more than 2 days beyond the engulfing Daily bar. Hope that helps.
AndyG
  • #72
  • Jun 10, 2013 12:55pm Jun 10, 2013 12:55pm
sorry forgot the pic....DOH!
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD H4.jpg Size: 94 KB
  • #73
  • Jun 10, 2013 1:04pm Jun 10, 2013 1:04pm
Quoting JayPipin
Hi everyone, I rather like this Andy, it has hope. Currently i noticed XAU has a sell potential The first image is the daily The second is h4 with rectangle showing engulfing area, and dotted orange line is where we await a h4 to close below and then insert sell limit I read most of the posts. I would like to suggest using ATR of 100 bars to give an idea of range and thus use this number as a T1, if the target is less, trade more pairs just not all at the same time such as manage exposure to USD risk. So for XAU i suggest T1 110 pips see ATR 100...
Hello JayPipin and thanks for your post. This is good suggestion and I will have a look at the ATR. I haven't used this method on commodities but don't see any reason why not - just no experience of them. Having looked left on the XAU chart though there is a fair bit of support in that area just now which may give some stubbornness! Have a go and report back.
Cheers
AndyG
  • #74
  • Jun 10, 2013 1:54pm Jun 10, 2013 1:54pm
Quoting AndyG
{quote} Hello Jurex, as promised attached is a chart of GBPUSD to illustrate my analysis method used for the backtest (GMT+2). This is one for 5th June as recorded in my spreadsheet. I trust it is self explanatory. AndyG {image}

Ok Great AndyG , so you put the SL at the Low of the Engulfing Bar, I understand now.

Thanks , I will test it and keep you informed
  • #75
  • Jun 10, 2013 1:58pm Jun 10, 2013 1:58pm
Quoting DrSwing
{quote} This is what Andy wrote in his very first post: {quote} It doesn't matter how anybody else defines an engulfing bar, above is how Andy defines it in this system. Also anybody who is serious about trading this method or for that matter any other method, should do their due diligence and back test and tweak the method for themselves. This will give you the confidence you will need to trade the system. Andy has provided the idea, now take it away and make it your own. It is said that sometimes "Opportunity comes dressed in overalls and looks...
Hello DrSwing, thanks for your post. By the way....."Opportunity comes dressed in overalls and looks a lot like hard work"...... you callin me a hill billy?
  • #76
  • Edited 3:41pm Jun 10, 2013 3:26pm | Edited 3:41pm
The ATR is essential to me (find it in - insert; indicators; oscillators) I use the lower of the two numbers
I found GBPCHF is a great setup, anyone agree

Keep an eye on EURGBP 8.00 bar is a true engulfer - i will attempt my understanding with the m15
I still have a long term approach to this pair for above 0.86
Attached Image
  • #77
  • Jun 11, 2013 12:32am Jun 11, 2013 12:32am
Quoting Jurex
{quote} Ok Great AndyG , so you put the SL at the Low of the Engulfing Bar, I understand now. Thanks , I will test it and keep you informed
Hallo AndyG

Thanks for sharing with us and all your effort especially with the backtesting results. spreadsheets, etc.

About the SL used in your backtesting: In your 1st post you said you put your SL 5 pips away from the latest 4HR swing high or swing low. In the backtesting you used a SL at the Low of the Daily Engulfing Bar. Is SL still a "work in progress" for you or have you determined that one of the 2 mentioned above is better.

I guess its the old story: If we put it at the 4HR swing hi/low we have a smaller SL in terms of pips and the greater potential to have a better risk:reward ratio (TP of 2xSL or more) but we will have a lower success rate (or SL taken out more often). With the wider SL (as in your backtesting) we will have a higher success rate but lower R:R ratio and bigger draw-down at times.

Regards,
  • #78
  • Jun 11, 2013 1:59am Jun 11, 2013 1:59am
Quoting AndyG
{quote} As promised earlier please find attached the amended spreadsheet with 8 pairs backtest. AndyG {file}
Thanks AndyG, I really like this spread sheet.

jt
"Even if you fall down face first, you still went forward."
  • #79
  • Jun 11, 2013 2:00am Jun 11, 2013 2:00am
I've tested this system with EA and wining rate is about 50% with RR 1:1.
  • #80
  • Jun 11, 2013 3:15am Jun 11, 2013 3:15am
Quoting boerseun
{quote} Hallo AndyG Thanks for sharing with us and all your effort especially with the backtesting results. spreadsheets, etc. About the SL used in your backtesting: In your 1st post you said you put your SL 5 pips away from the latest 4HR swing high or swing low. In the backtesting you used a SL at the Low of the Daily Engulfing Bar. Is SL still a "work in progress" for you or have you determined that one of the 2 mentioned above is better. I guess its the old story: If we put it at the 4HR swing hi/low we have a smaller SL in terms of pips and...
Hello, boerseun, you have hit the pip exactly on the nose! The SL position versus the R:R ratio is always going to be at odds however for ease of calulation I used the wider SL for the backtest (obviously meaning a R:R of 1:1 and a bigger hit if the trade didn't take off).

Thanks for you observations.
AndyG
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