The Quartile Trader

Due to popular request I will start this thread on the use of using a Quartile to plot trades and try to answer any questions when I can.

A Quartile is simply a substitute for the Fibonacci retracement tool in that the Fib numbers are substituted with the numbers:..

0, 0.25. 0.5, 0.75 and lastly 1.

This gives us a grid where, when expanded, the divisions always remain equal i.e. 25% apart.

In the Properties box of MT4 we set up the above numbers and in the description we put in the %$ to apply the prices to the grid lines.

That is all there is to setting it up.
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One of its main uses is to plot the 25% retracement of a move (1 Quartile) so we can then trade for multiples of this expressed as a percentage. Thus if we risk 1% on 1 Quartile we aim to get multiples of this as rewards and the Quartile reports the numbers where our stop, entry, and target (SET) need to be placed.

Traders need to have nimble fingers to quickly set up the SET pending orders. Knowing something about price structure and how price moves will be an asset to this method of trading.

Keep the posts coming, I subscribed!

Cool interesting way with numbers .. looking forwards to this ..

Sounds cool Nala66 - I have started trading using this method and am finding amazing results !! YAY - thanks

Welcome BBalazs and dean1star

The Stunned Mullet

This is a trader who for whatever reason has a fixation price is going to go where they think it should. As a result they marry their trade and hang in there by their fingernails often adding to the losing position in an attempt to average down the losses but end up digging a deeper hole. If this described you then this thread is probably going to be worth your while following as the Quartile trading method is designed to prevent this situation ever happening.

We are going to strictly control our Stop, Entry and Target i.e. SET.

The first thing we need to understand is that pips by themselves mean absolutely nothing. Pips are simply the chart increments, they have nothing to do with your trading account other than being a part of a simple equation. If I said I made 10 pips profit then what does that mean since it could be 10c a pip or $500 a pip and how does that relate to the size of the account being traded. However if I said I made 10% profit then this tells a whole different story where we can relate this to our own accounts and would obviously deem this to be very good.

In other words it is not the pips that count so much as the value we put on each of them.

We need to determine our risk be that somewhere between 1% and 5%. I personally stick to a 5% risk for each trade. However I would suggest you practice with a great deal less than this until you work out where the Quartiles should be placed to be effective.

So this is how I make the setup for say a $1,000 account with a 400:1 leverage... (None of that US 50:1 nonsense)
Work out what is 5% of my account (account divided by 20)= $50
Then I look at the space between the Quatiles i.e. 5 pips and add the spread say 2 pips = 7 pips.
Then I divide the 5% being $50 by 7 = 7 and a bit. If I want to be more accurate then the $50 needs to be divided by 1.2 because this is the actual return I get per pip and of course this also applies to the loss.

So 50 divided by 1.2 = 41.66
$41.66 divided by 7 pips = 5.95 This is the lot size and rounded is 6 mini lots i.e. 0.6 standard lots.

That is all the calculations I need to make and can easily set this up in a spreadsheet to return the numbers to me in a flash.

I now have the amount I need to risk so if I get stopped out it will be no more than this sum.

This is always going to be priority number one... Strictly limit the risk to what you are comfortable with.

Below you see a section of a chart showing the setup I have just described.

No worries Pippy24, we all have the choice of being a winning trader or a losing one, glad to see you are the former.

I can only post so much per day because I have a busy schedule with two trading webinars a day so behave yourselves until I get the time to post.

Yes Boss ..
Trying too but it aint easy

The Quartile has some very interesting properties.

Here is one example of how it predicts the top of a move from the range at the bottom. This happens quite a lot and I have no idea why, bottom to top exactly 173.9 pips. Oftentimes it steps through each Quartile precisely like a staircase. Why the distance is exactly four times the range is beyond my humble thinking. I have applied this practice to a number of pairs and time frames and it still shows this strange event... Weird or what?

You can safely trail your stop remaining one Quartile behind the price action but watch out for that top one i.e. Time to bail out.

Well done to Pippy24 61% profit in a day is something most traders only dream about. Told ya it works!!!

I don't actually look for these big moves as shown below because the bigger the move the smaller the profit and the longer the time span. As Pippy24 found out the closer the Quartiles the bigger the profit and the quicker it takes.

Nice read there Nala .. trying to understand some more so off to do some research and thanks again for your time and input.

Thanks Dean1star

I am not sure what you can research because I invented this years ago. It came to pass when I was studying trend lines and was looking for a word in the dictionary meaning four and is primary,secondary and tertiary then what is the next in this series. Anyway I couldn't find a word for it so I use the word Quagga which is actually and extinct Zebra. Well if it is extinct it doesn't need the word any more so I borrowed it. I also found the word Quartile and being interested in all things I figured out a way of putting this on my charts to see if there was meaning to it. See I have never believed Fibs have anything to do with currency trading where I can easily believe price moves are 25% increments of something.

That's how it all got started the trick then was to learn how, when and why to use it in relation to the chart after all just putting it anywhere willy nilly it fails to work properly. I still like to have confirmation with other stuff before I take a trade but the Quartile controls the conditions of the SET and this works very well. A single loss is easily recouped with a win of multiple Quartiles. The smaller the Quartile the better so there is no need to spend endless hours in a trade when the task can be completed in minutes.

So there is a brief history of a heck of a lot of study.

Sure goldtime, here is a screenshot to assist you. Just change the Fibo settings to these numbers and put the symbols in the description boxes

Interesting and well written posts. Subscribed.

Thanks rockhopper I hope i can keep you entertained :nerd:

OK let's see what can happen on a typical day, there is a little more to reading this chart than I am showing here but the purpose is to show how to use the Quartile as a tool and not to teach how to read charts.

I will do this in several progressive screenshots beginning with this shot of the AUD/JPY 5 minute chart.

To this we are going to add the Quartile and expand is so the range fills one Quartile. Note we would do this for both directions long and short but I am only showing the long because that is the way it broke. Note also I would space the Quartile an extra 2 pips on either side. We set the Stop and a pending order on both sides of the Quartile but in this case I am only showing the long Buy Stop.

Again note this is the start of the day so as yet there is no TP set since it is desirable to let the trade run and move our stop to break even when safe to do so leaving us in a free trade where every 28 pips is adding 5% to our account.

By all means stack your Quartiles one on top of the other to create a ladder effect. Now early in this trade we want to compound our winnings so again we use a new Quartile of a different colour so we can identify the difference. We do exactly the same as we did with the first in relation to risk etc. When our new pending order is taken up we move the stop accordingly to protect ourselves.

So zooming out a tad you can see the trade has progressed and the stop has locked in 50% of the account. Becaus eit is the weekend you may want to simply close the trade for about 60% profit or you may just close the blue one for about 18% profit letting the red one run into next week.

Subscribed!
Are the two moving averages important?
And do you pyramid?