i will give my humble opinion about this system and made a sugestion… i hope you don´t mind.
i think the problem with trading daily high-low brake outs is that during the day you´re passing by different market sessions… i mean usualy london goes in one direction them NY goes horizontaly and them asia goes in the oposite direction of the london session… so the time of the day that got the pending order hitted is crucial for the results of the trade…
another problem that has being discussed here is the lack of a good SL spot and a good TP target…
this is my sugestion for the hi-lo:
why not trade the hi-lo of the diferent sessions 4h candles?? i mean you all trying to make just a couple pips for trade so whats the difference between trade the dailly candle or the 4h candle? some of the 4h candle had the same size as the day that they belong… the difference is that you have at least 3 different oportunitys of get the pips. for egsample in the london session you can trade the 8am candle, the 12am candle and the 4pm candle.
and trading in a small scale can easly shows better SL spots, like for egsample: the 5mins chart previous high or low before the breakout, 5mins parabolic sars, top or bottom of the 1h candle that had made the breackout…
and as TP just use a good rr ratio or get patience and wait for the close of the 4h candle…
this should be done in high range pairs such eu,gu, ej and gj… and may need some simple rules but i think it could be better than just try for the dailly candle…
any case, is just a sugestion and no mean to made an offtopics post…
i think the problem with trading daily high-low brake outs is that during the day you´re passing by different market sessions… i mean usualy london goes in one direction them NY goes horizontaly and them asia goes in the oposite direction of the london session… so the time of the day that got the pending order hitted is crucial for the results of the trade…
Rui
I think thats a good observation and one I base a lot of my discretionary trading on. I have not found it to be something thats predictable enough to set any pending orders on or even set stops with. The different range and action of each pair is variable and it changes day to day and week to week. Some weeks I even notice a mid week reversal on the daily candles. I sometimes use these ideas to help me pick direction when I am at the charts trading.
I have thought about a strat that would open a trade at a session open or close based on the direction of the previous 4 hrs the trade would only be kept open for 1 hr. I dont know how good it would work but it might be worth testing. it would not be that hard to do with a spreadsheet.
I think Hellogoodby looked at using some 4hr bars in his breakout variations.
i´m not saying that 4h candles hi-lo breckouts can be traded randomly…
like i said it need to take advantage from a determinated market session… for egsample if you want to trade london session you need a broker that provide 4h candles that match exactly with the london opening, and if you want asia session you need a broker that provide you 4h candle that match with the asia opening… otherwise it will not take advantage of the inter market moves.
the shape of the candle that will be used to set the hi-lo pending orders should be taken in consideration too… for egsample a candle that closes at the same point of the high or low is not a good candidate for hi-lo breakouts… but that´s very rare…
any way is just a sugestion… and it can solve the SL metter for once
Just checking in quick to say thanks for the words of encouragement. The frustration coupled with going to a job I hate after the end of every trading day is starting to get to me, I think. I will not be giving up; this is what I want to do for the rest of my life and I will not stop until success is achievable.
To the matter of hi-lo breakouts, I am looking at something related to naked trend trading: trading breakouts using “peaks and valleys” off the 1 hour/4 hour charts. It looks [I]very[/I] cool and I may try it next week to see how it goes.
good to hear it Prince. Just don’t risk too big a lot size until you know you can win consistently over the long run, and then go for it! That’s my plan!
So I went back over it and here are the results.
just trading one pair GU
32 trading days.
9 days no trade.
16 wins = 320 pips.
5 losses = 200 pips.
total gain 120 pips.
Three of those losses would have been wins if my stop had been a little bigger. there was a retrace of 55, 49 and 47 pips
Not very impressive.
Some of those wins could have been much much bigger, clearly there’s a lot of room for improvement.
well I did say early on that around 55 tp is best. I’ve been doing 20 because I like the frequent gratification… (hey Bevis he said gratification huh huh)
Just ran an all day optimization for a daily breakout on the G/U. Settings are:
SL 6+spread
TP 30
Order Life (close position after x amount of time) 11 minutes.
Breakout pips (amount of pips needed for the breakout) 7
this produced 242 trades, profit factor of 1.90, expected payoff of 3.58, drawdown of 2.02%. Thats from 1/1/08-present. Oh, and 867 pips profit. Not very much. This would have to be used on like 10 different pairs for any good results lol.
Edit, Like all EA backtests on MT4, the first 3/4 looked like something off of a scam sight, a perfect slant upwards of increasing account balance. This backtest showed a maximum gain of a little over 1k pips. But, then in the last 1/4 of the test, it loses profitability.
Order life means after x minutes close the trade, and ya, the breakout pips means how many pips above/blow previous day high low to wait for before trading.
Have read through this thread and also looking at the validity of such a method. The cold hard fact is this method is a chase your tail system. It just doesn’t make any money because it goes against all good trading practices. It would only be classed as a gambling method and you should know by now that gambling has no place in the market. I cannot understand anybody trading this idea with real money. The thought that comes to mind is one of the old time movies of people with wings attached to their arms and jumping off of a cliff. You just think “what were they thinking”?
The PF of 1.9 on the previously posted EA is terrible and the idea behind it is flawed.
Making money is so easy if you just quit looking for the Holy Grail. If I told you how much money can be made with one contract per day you would probably call me crazy. I made $2000 in the first four hours tonight alone and I consider that low. I make over $1500 per hour in high volume. I actually hate trading and find it boring as hell. I love everything else but I find the actual trading part putting me to sleep. I can only do it with alerts and do other things at the same time.
Block out the naysayers and learn the basics. Make it as simple as you can and still “SEE” the market and just freaking do it. If you’re not making money go back to the basics and demo. Put a template on a simulator and trade until it becomes so automatic you could do it in your sleep. Don’t use all your skills and education trying to uncover something that is difficult because this is so easy a monkey could do it.
You just have to believe it’s that easy and when it finally hits you between the eyes just how easy this game is you will slap yourself on the side of your head and ask your self what the f–k was I thinking. It was right there in front of you all the time and still is right there for the taking.
The reason I started posting on this thread is in my past I went searching for the Holy Grail in the Daily High and Low and actually found the pot of gold. You see by seaching for gold I found diamonds and seeing this thread brought back a few memories. It was there all the time and was right in front of me but I was blinded by the indicators and the books and threads that I had read. You have to forget about all the garbage because most of the stuff that is written or posted is just unadulterated crap.
When you finally “get it” and you come back to visit threads like this you will view things through different eyes. You will do a lot of “remember when” thoughts and view this as first grade stuff that didn’t work. Many before us have tried methods like this and many will try again going from one to another until they have no money left. Some will go on to make money but many will just eventually give up and quit never knowing it was right there in front of them all the time.
The idea of the EA was to see if this system was profitable, which it is not :p. But still, I have some free time so why not tinker with it? Besides, This fits around his schedule, so for right now this is a good way for him to trade.
EDIT
By the way, I think in order for something like this, or any system at that, it will need to have some discretion. I think just saying “if High(0) > High(1)+X then buy” will lead to a failed trading plan. That’s also why I believe 99% of EAs dont work. I believe Human discretion is a key indicator to any system. EAs may still be profitable, but I’d click that little option that says “ask for manual confirmation” this way you will see all the possible trades but you will be able to choose which ones you feel are the high probability trades.
You were the one that prompted me to write that post. If I was truly ripping Mike then I have to rip myself and thousands of others who wasted time and some even wasted money on methods like these. They never pay off as well as the simple Support and Resistance methods. The sooner you can tell the difference between trading and gambling the sooner you’ll make money.
The more you know about trading the more you know why these shot in the dark methods never work. It’s like watching a friend cross a busy highway against the light. You’ve done it many times yourself and survived but you still hold your breath when you see someone else doing it. You no longer do it yourself because you’ve learned it’s just not worth the risk of getting killed.
The truth is I wish nobody any harm and wish you all well. Other traders helped me along the way although none really taught me how to make money trading. I learned a little from many and from some who still make little from the market.
Why can I make money and others fail miserably. The answer to that question is hard to answer because it certainly didn’t happen overnight for me. One day I sort of got it all in my head and now have 100% confidence trading at any time of the day with any currency pair. About the time you’re ready to pack it all in and quit you suddenly have a relevation so you continue the quest.
The key I guess is to never say die but there are things like this method that get you completely off track. You just have no idea when the high rises above yesterday’s high where the price is in relation to resistance unless you are looking at it. I guarantee you won’t trade this method for any amount of time and make money.
You’d be better off taking a buy long or a sell short at open depending on the trend and the fundamentals and selling at the next high or low. The smarter move would be to wait for move away from the trend before entering and then sell or BTC at the next S or R. Why is this so hard to understand? Everyday the market presents you with 10-25 thousand dollars of possible profit per day per contract just on the GBP/USD. How much are you putting in your account on a daily basis, 100, 250, 500, 1000? I know the answer and I’m telling you this is not the way to get it either. I was lucky enough to have a professional trader that hit me over the head when I got off track.
Just consider this a hit over the head. It’s much less painful then losing all your money.
This is not a good way for anybody to trade on any schedule. The fact is that an EA is only as good as the person who wrote it. If you cannot make money trading manually then how can this same person design a profitable EA. Many try and think this will change their luck. Many people write books about trading but after reading some of their garbage I realize why they are writing books and not trading.
Would you sell the goose that laid the golden egg for a few hundred or even a few thousand? You say this method is not profitable yet you say human discretion can make this profitable? Then what good is your EA as far as a test of this method. Sorry but it really is no test at all and you’re back to square one. If a human can see this as a good or bad trade then something must be helping him to make this decision unless he’s just flipping a coin. If there are other factors then why not put those factors in the EA.
Didn’t mean to upset the apple cart here but reading about the losses prompted the post. If you like losing your money then go ahead and do it. It just seems strange to me not testing this method first.
Oh Johnny Johnny… I really don’t know what to make of your posts. They seem to be getting more bizarre by the minute!
In order to get $25k on any given day much less on a single contract will mean having a huge account and way over leveraging. Professional traders and were talking professional trader income here make no mistake. Trade an eight figure account for this sort of return and usually over 1-3 days at 2X or 4X leverage.
Also from what I have read of your posts you regard the daily as ‘king’ but drill down and trade the minute using a miriad of fast and slow indicators? I really don’t understand how you could comit such vast sums of money into what can best be described as the fairly random nature of the minute chart with any degree of success? If I am incorrect and we can all make huge sums of money in a blindingly obvious way that has hitherto eluded us all I am sure were all ears… I know I could use $5m a year ($25k X 200 trading days). Show me the money Johnny, show me the money!!!
Oh my! Robert you mean you don’t make 5m a year? :eek::eek:
Johnny B, I don’t understand the term holy grail, people throw that term around here sometimes. That’s why it was in the first line of my first post. I was being funny.
With posts as vague as that you’ll end up being as useful as our old friend Used
So you talked a lot without saying much. All you said is that this method won’t work and you have a method that does. So details would be nice. ??? Don’t just say ‘youre all doing it wrong’ tell us how to do it right. Support and resistance? I"m looking at that. Pivots? I’m looking at that. This daily hi low idea stems from the simple fact that most daily candles are offset from the previous candle. So how do you capture that offset that happens so reliably? I’m examining a probability based approach. Maybe it will work, maybe not. It’s an experiment.
Going to try what my original post 1 suggested and go for about 50pips.
Results so far.
50 pip Winner last night.
oh Johnny B. appreciate your input but if you DO decide to show us ‘the way’ to the top. Start a new thread so this one will stay on track. Thanks!
metaphysical quote of the day…
–Forex is the sound of one hand clapping–
(and mark one off the honeydo list)