A Simple 2 Bar System

[amiscell]

Hi BankDaPips,

Have you tried automating this? Since the rules are so deterministic, it can be easily automated and evaluated for profitability.

Thanks!

Hello,

I have been spending some time working on this 4 Hour chart system, which is still open for modification, however the results have been great so far.
I have been testing it on the YEN crosses, specifically GBPJPY, EURJPY, NZDJPY & AUDJPY.

So I will be sharing and trading it here and make modifications, if needs be, in this first post.

[B]Overview[/B]

The basics of the system is comparing the 12:00am est bar with the 4:00am est bar to determine which trade position to take.

Basically, if the 4:00am bar close below the 12:00am bar low, price will go down and if the 4:00am bar closes above the 12:00am bar high price will go up. Additionally, we trade the hinted trend after 4:00am.

[B]There are three (3)types of entries which will qualify taking a trade:[/B]
[ol]
[li]Type 1 entries allow us to place trades when there is a close above/below the 12am bar
[/li][li]Type 2 entries allow us to place trades in the direction of the hinted trend when there is no close above or below the 12am bar.
[/li][li]Type 3 entries allow us to trade the retrace to the blue bar close price in type 1 long setups.
[/li][/ol]

[B]TYPE 1 SHORT ENTRY[/B]
[ol]
[li]4:00AM closes below 12:00AM
[/li][li]Place a sell order, BEST, 2-8pips below the close price of the last BLUE bar before 12:00am. Blue bar must be no further than 5 bars away from 4:00am bar. If no BLUE bar, place order, BEST, 2-8pips below 12:00am OPEN price.
[/li][li]Set hard stop of 33pips from entry
[/li][li]Limit is calculated as follows:
[/li]
If range of ENTRY PRICE BAR(EPB) =<30, LIMIT = (EPB High - 3.65EPB Range)+18pips
If range of ENTRY PRICE BAR(EPB) >30 and =<50, LIMIT = (EPB High - 2.43EPB Range)+18pips
If range of ENTRY PRICE BAR(EPB) >50, LIMIT = (EPB High - 2.3*EPB Range)+18pips

[li]Stop is moved to BREAKEVEN when price reaches low of EPB or 12:00am bar, whichever comes first.
[/li][li]Order is valid for 5days
[/li][/ol]

[B]TYPE 2 SHORT ENTRY[/B]

[ol]
[li]4:00AM fails to close above or below 12:00AM
[/li][li]Look at past 5 bars from 4:00AM to ascertain the most dominant activity.
[/li][li]If 2 is determined to be selling, place a sell order, BEST, 2-8pips below the high of the last BLUE bar before 12:00am. Blue bar must be no further than 5 bars away from 4:00am bar. If no blue bar, enter at 12am close price.
[/li][li]Set hard stop of 33pips from entry
[/li][li]Limit is calculated as follows:
[/li]
If range of 12:00AM BAR =<30, LIMIT = (12:00AM High - 3.6512:00AM Range)+18pips
If range of 12:00AM BAR >30 and =<50, LIMIT = (12:00AM High - 2.4312:00AM Range)+18pips
If range of 12:00AM BAR >50, LIMIT = (12:00AM High - 2.3*12:00AM Range)+18pips

[li]Stop is moved to BREAKEVEN when price reaches low 12:00am bar OR last blue bar before 12:00am, whichever comes first.
[/li][li]Order is valid for 48hours
[/li][/ol]

[B]TYPE 3 SHORT ENTRY[/B]

[ol]
[li]4:00am closes above 12:00am
[/li][li]Next bar fails to close above 4:00am
[/li][li]Place a short order as close as possible to the high of the 4:00am bar, if and only if there is a reasonable gap between entry price and recommended limit level below.
[/li][li]Set a hard stop of 33pips
[/li][li]Set limit at low of the last blue bar before 12:00am.
[/li][li]Breakeven at 4:00am low.
[/li][/ol]

The inverse applies for Long trades.

[BankDaPips]

Hi BankDaPips,

Have you tried automating this? Since the rules are so deterministic, it can be easily automated and evaluated for profitability.

Thanks!

Hi amiscell,

Yes I am thinking about that at the moment, only that I don’t code MT4 or cAlgo. So trying to find a someone who knows either or both.

[amiscell]

I can do that, no worries. I’ll give it a try.

[BankDaPips]

I can do that, no worries. I’ll give it a try.

Grreat amiscell! Very much appreciated. Please let me know if/whether you need any clarification!

[swallowtail]

[QUOTE=“amiscell;629641”]I can do that, no worries. I’ll give it a try.[/QUOTE]
That would be great!

[amiscell]

What exactly do you mean by RANGE of EPB. Do you measure the pips of open to close, or high to low?

[BankDaPips]

What exactly do you mean by RANGE of EPB. Do you measure the pips of open to close, or high to low?

From high to low amiscell.

[amiscell]

Also, when you talk about EBP you refer to the 4am bar, right?

[BankDaPips]

Also, when you talk about EBP you refer to the 4am bar, right?

If there is a blue bar, before the 12am and within 5 bars of the 4am then that bar is the EPB. If there is no blue bar meeting this criterion, then the 12am bar is the EPB.

[amiscell]

I am not sure I understand this: “If there is a blue bar, before the 12am and within 5 bars of the 4am”.

• 12am comes before 4am
• 4am is 4 bars away from 12am
• Therefore, I can only search up to 1 bar before 12am?

[BankDaPips]

I am not sure I understand this: “If there is a blue bar, before the 12am and within 5 bars of the 4am”.

• 12am comes before 4am
• 4am is 4 bars away from 12am
• Therefore, I can only search up to 1 bar before 12am?

asmicell are you looking at H4 charts? The system is for H4 charts only.

[amiscell]

Sorry, I missed that piece of information. Now it’s all explained

[BankDaPips]

Sorry, I missed that piece of information. Now it’s all explained

ok great, no prob.

[BankDaPips]

NZDJPY type 2 long.

[BankDaPips]

Good morning. eurjpy continued downward from blue bar low as expected. nzdjpy and audjpy stopped at -33pips each. Wanted to see whether these would playout independently of ej setup. Will see how today setups.

[BankDaPips]

Good morning amiscell, how is it going? I wanted to know whether each entry type may be tested separately so we can see what to keep, what to tweak and what to let go.

Thanks much!
Bank

[amiscell]

Hi BankDaPips,

How do you deal with Standard Daylight Savings? The 4H candles will fall at 12:00 during this period, and 1:00 during the winter. In the winter, do you:

• Still work by 4:00am, but the candle won’t be complete, and even the 12:00am candle will actually be a 1:00 candle.
• Work with 1:00am / 5:00am candles

[BankDaPips]

Hi BankDaPips,

How do you deal with Standard Daylight Savings? The 4H candles will fall at 12:00 during this period, and 1:00 during the winter. In the winter, do you:

• Still work by 4:00am, but the candle won’t be complete, and even the 12:00am candle will actually be a 1:00 candle.
• Work with 1:00am / 5:00am candles

Yes amiscell, work with 1 and 5.

[BankDaPips]

GBP/JPY type 1 long.

[dubadat]

Hi Bankdapips,

Still learning your rules.

Could you be kind enough to point out the red candle we use to place our GBPJPY order?

Thanks

DD