Highest Open / Lowest Open Trade

“Now, 2 patterns of market behavior happen on a regular basis:
1) the price breaks to new high's (or low's)
2) the price reverses from new high's (or low's)
They happen regardless of time frame.
They are phenomena that can be exploited without the fear if found out by others, that they might cease to exist.” - H. Rearden


Price Action #advancedalientrading

1) Price will either breakout of the high, low or both of the previous bar
2) Price will not breakout of the previous bar.
3) Price will either close above a level (line) or not.

HIGHEST OPEN / LOWEST OPEN TRADE

Place a line at the highest H1 open and lowest H1 open for the current day.

Sell short at the highest H1 open after price goes up through it and comes back down.

Buy at the lowest H1 open after price goes down through it and comes back up.


Stop loss is the current daily high or current daily low.
Adjust your position size accordingly.

Take profit by moving stop.
When trade is +5 or more, move stop to BE+1.
When trade is +10 or more, move to to BE+5, or switch to trailing stop.
Optional exit is to exit part of trade position with a profit to bank it, move stop to BE+1 and watch the market.

NOTE:

Do not wait for the bar to close to enter a trade.


WARNING

When price breaks through yesterday's high or low or makes a new high or low today, that is a breakout!
Trade the reversal with caution.

To the NO voters in the poll. Please post the reason you believe this is not simple. Thank you.


"Perfection is not when you have nothing more to add, but when you have nothing more to take away." - Antoine De Saint Exupery

"It is not about adding on, but taking away. The less technique, the better you are." - Bruce Lee


Please understand none of this is original or new and this is presented for EDUCATIONAL PURPOSES ONLY. You may find your results may differ. Please check with an accredited financial specialist before using real money. FOREX trading can be risky. YOU HAVE BEEN WARNED!





ADDED MAY 20, 2016:

Let me see if I can address areas of confusion.

First, read the rules.
Do not add anything to the rules.
Do not subtract anything from the rules.
Do not modify the rules.
Read the rules, again.

The first line: Place a line at the highest H1 open and lowest H1 open for the current day.
Current day means today according to your broker.
My broker starts a new day at 5PM NY time which means when it is 5PM, I have to move the lines.

The second line: Sell short at the highest H1 open after price goes up through it and comes back down.
Price has to GO UP FIRST.
Price has to GO ABOVE the highest H1 open.
AFTER, price has risen above the highest H1 open, THEN AND ONLY THEN, do you enter a short trade when price falls back down to the highest H1 open.

The third line: Buy at the lowest H1 open after price goes down through it and comes back up.
Price has to GO DOWN FIRST.
Price has to GO BELOW the lowest H1 open.
AFTER, price has dropped below the lowest H1 open, THEN AND ONLY THEN, do you enter a long trade when price rises back up to the lowest H1 open.

The most difficult thing about this method is you have to WAIT.
For many traders, waiting does not come naturally.
Failure to wait, will in most cases, result in losses.
I suggest you literally sit on your hands while you wait to avoid entering a trade too soon.

There is no "trick" to this method.
No gimmicks.

Let me suggest at the end of the trading day you post your marked up charts here.
We can see how many days price closes above the highest H1 open and below the lowest H1 open.
Zero will mean there would not have been a loss when the rules were followed.

Many traders ask how I know when the highest open and lowest open occur during the day because the next bar may make a new high/low.
I do not know.
No one knows.
What we know, from the previous count, is the close is usually below the highest H1 open and above the lowest H1 open.
This is our "edge".
This is what allows us to bank pips on a daily basis.


ADDED MAY 27, 2016:

This may help those who are trigger happy to wait:

M15 bar must open below the lowest H1 open before you can enter.

M15 bar must open above the highest H1 open before you can enter.

Price will be moving in your direction when you enter the trade.


ADDED FEBRUARY 6. 2017.

See attached HOLO PDF.

ATR EXPLANATION: https://www.forexfactory.com/thread/...6#post13921836


EXAMPLES:

http://www.forexfactory.com/showthre...45#post8952745


Great visual explanation: http://www.forexfactory.com/showthre...58#post9007658

Evaluations by A.I. start here: https://www.forexfactory.com/thread/...1#post15698911



CHALLENGE

Trade 0.01 lots for 10 trades.
Follow the rules exactly.
Stick with the same pair for all 10 trades.
Post your results.
NOTE:

Do not wait for the bar to close to enter a trade.



To get the latest indicator and template file click on the attachment icon, paperclip, for this thread.

Please do not discuss or mention EAs in this thread.
EAs are not welcome here.

EAs distract from the method.
You have been warned.

If you want to post code in this thread post the MQ4 files.
Posting only EX4 files is not welcome.

You may wonder why.
EX4 files could contain something harmful.
MQ4 files are compiled on your computer so you can feel relatively safe.
If the coder "vanishes" then the code can not be updated if/when it fails and the code can not be improved or enhanced.
Who wants to be a the mercy of some unseen coder?


Newcomers to the thread, if you want a question answered then copy/paste the following message when you ask your question:

I HAVE READ POST #1 AND THE EXAMPLE LINKS BUT I STILL HAVE A QUESTION

Trade alert.

Stop in place.

Stop moved to BE+1.

Please do not hesitate to ask questions.

"Successful people ask better questions, and as a result, they get better answers." - Tony Robbins

Socratic method is named after the classical Greek philosopher Socrates. It is a form of inquiry and discussion between individuals, based on asking and answering questions to stimulate critical thinking and to illuminate ideas.

The HIGHEST OPEN / LOWEST OPEN TRADE system is a derivation of the Trading is as simple as 1-2-3.

The entries are sometimes the exact same but this system, more often than not, gives more trading opportunities.
No claims are made for making hundreds of pips per trade.
Trend, support, resistance, etc, are ignored.
Price action reversals from the daily high/daily low are what makes this system a winner.

Someone may write an EA to prove this system does not work.

If someone attempts to do this, please make the EA have a start/stop time inputs with default set to NY 8 am and NY noon.
Move stop to BE+1 after N positive pips must be an input.
Exit part of the position after X positive pips must be an input.
Stop trading for the session after Z positive pips or Z dollars have been banked.
Stop Loss should have an input for daily high + Y pips and daily low - Y pips.

This would be the only way to have a fair representation of how to trade the system profitably.

Another example.

How far price has to go through the open?

Are you asking if price does:

O - 1, O, O + 1, O Do you enter?

O - 1, O, O + 1, O + 2, O + 1, O Do you enter?

O - 1, O, O + 1, O + 2, O + 3, O + 2, O + 1, O Do you enter?

Best to wait for a candle to close above the highest open or below the lowest open before you enter so you can enter with the candle flow as opposed to against it.
See Bars 33 and 32 in chart above.

Sometimes, the candle may spike and retrace. You enter on the retrace.
See Bars 30 and 29.

You will have to watch your pair and see how it reacts.

Good question! Let me know if you need further explanation.

Possible trade.

Hi, thanks for sharing your strategy...
Do you use some indicator? for automatic marked High or Low of prices?

WARNING

When price breaks through yesterday's high or low, that is a breakout!
Trade the reversal with caution.

Notice Bars 8, 7, 6 and 5 in above chart.
Price broke open yesterday's high.
BE+1 saved losses.

Yes.
However, I am not permitted to post the indicators.
Indicators are not necessary to do this.
In fact, it is better to learn without using the indicators because you will be engaged in the process.
This will train your eyes to see the highest/lowest open.
Place your lines there.

So to place a trade you use 5m chart and when 5m candle closes above 1h lowest open you enter a trade? In case of buy trade.

And one more question. Do you trade only NY session because it tends to revers intraday trend?

So to place a trade you use 5m chart and when 5m candle closes above 1h lowest open you enter a trade? In case of buy trade.

No, I usually look at the H1 bar chart and look at the time on the clock. I can see what time it is.
At X:05 price above the highest open means I can short when price comes back down.
Or at X:06
Or at X:11
Etc...

The M5 candle chart I showed with the H1 background was for educational purposes.
That chart is "too much", too distracting, for me to trade.

And one more question. Do you trade only NY session because it tends to revers intraday trend?

I trade the NY session because I live in the USA.
The news around 8:30 provides volatility.

Thanks for your questions.

do you trade the same 1h candle which forms the highest open and hh of the day? For example we have current candle number 0. Open price of this candle is highest open of the day, then price goes up and makes new high of the day and after 1,2,3..5 minutes price goes down below open. Will you open short trade in this case?
Thanks

TooSlow,

the only problem I see is that we don't know which H1 candle will be the high/low of the day even if the current candle is the highest/lowest of the day so far.
H1 candles after the current candle might go even higher/lower???

Yes.
But one has to be careful of price action.
Many times the candle will return to the open price and bounce.
Other times it will pass right through. See bar 16.

Thanks for the question.

No problem at all, yonnie.
You are correct, we do not know what will be the high/low of the day until the day is over.
However, the current high/low of the day has the potential to be the high/low of the day.
That is why this trade works and why one must use stops.
Look at the charts posted.
Are the trades apparent?