Sorry, I’m a little confused here. So you’re trading the bounce and breakout at the same time? So essentially a hedge at the same price, same position size.
Where’s the profit in that? I would just see one losing out on spreads and a completely hedged position.
If you read the first few posts, you’ll see that we use 5 pip stops, and the bands average 25 pips, so it’s hedged for the first 5 pips, yes, but if price continues, than while there’s a 5 pip loss, a 25 pip TP still nets 20 pips - spread. Yes, there can be repeat losses, if the trader is very aggressive…trading the breakouts only will have less losses like this, but it’s up to the trader if they want the additional risk of trading the range at the same time.
You can add a filter of your trades. Only place one trade of one method per bar (per hour in this case)
So you don’t finish placing lots and lots of winners within one single bar. Does that make sense?
That’s a good idea…I agree it would help keep repeat losers down.
Good Morning Guys
I’m still a noob and I have a few questions:
This is the very first system I’m going to tackle in my career and I’m really interested in it. Please help.
Thanks Guys
TP=Take Profit
EA=Expert Advisor
If you read the thread, you will find that it is simple
For deviation, you should google “standard deviation” and understand the term.
Also, please do not use this system on live account, because it is EXPERIMENTAL. Please do first the school of pipsology here in babypips, understand the terms and after that go demo trading a month, until you get used to the platform terms and methods, and after that start with a micro account trading nanolots.
I can say you that long term trading is best. So feel free to look at some long term systems like this http://forums.babypips.com/show-me-money-swing-trading/42511-diary-position-trader.html or this http://forums.babypips.com/show-me-money-swing-trading/50672-forex-portfolio-how-gain-consistent-profits-staying-market-24-7-a.html
A EXPERIMENTAL system like this could be the next holy grail, but it needs to be back and forward tested for about 6 months.
I’ve been trying this strategy on other currency pairs, and had a look on the M30 time frame as well. I only back tested for the past month or so, and still doing forward testing, but the results were quite interesting:
EUR/USD on M30 appears more profitable (more trades and more pips), didn’t trade ranging between bands.
GBP/USD worked best on M30 and only trading ranging between bands. On H1 can trade breakout rather than ranging, but got very few trades and less pips compared to M30 ranging.
USD/JPY on M30. Got similar amount of trades, same win loss ratio, but more pips than on H1.
EUR/JPY twice as many pips on M30 as on H1.
EUR/GBP slightly less pips but better win loss ratio on H1 than M30.
Those are just the ones I’ve looked at so far from about mid January till now.
Just for interest. Still some testing to do :).
Oh, and I only looked at trades mainly on London time (from about 2hrs before London open and about 2hrs after close), as that’s the times I trade.
Hi guys,
I turned this idea into an EA, but didn’t have time to experiment looking for profitable settings; my initial tests weren’t positive, but rather than consign this EA to the cupboard I thought I’d leave it with you guys to see if you can find decent settings or time-frames on which this works.
It’s different from the original spec in that there is no break-even on the SL, and the SL/TP are hard set to a value which is the distance from the centre line MA (another addition) to the envelop boundary.
Please don’t use this EA on a live account, just play with it in the strategy tester. I can provide no warranty of any kind and you use it at your own risk. 
Parameters:
*) Deviations - number of standard deviations to place envelope boundaries, chose the right one for your time-frame visually
*) EnvPeriod - period for the Envelopes indicator
*) SleepMinutesOnLoss - number of minutes to ‘sleep’ when a loss occurs
*) LotSize - self explanatory
Needs metatrader 4 to run.
PendingEdge.zip (24.8 KB)
Cheers, Paul.
Thanks for the EA!
Sorry for the absence, but my work cut off access, so my posts will be very few and far between from now on 
Another variation of the breakout part is to use (on any time frame) two 5 Smoothed moving averages, one at the high, and the other at the low, and trade when a candle closes outside these bands.
Greetings.
I am a new member and would like to test the system. I need some tips to configure the system correctly:
What is the name of the indicator?
How to configure the indicator
thank you
Hi.
Thanks for sharing this system. One suggestion - exit trade when price closes higher or lower sma 5 (close).
Such way will save some pips before price change direction. And also sma 5 acts as dynamic s-r level.
One more imrovement (imo) - add sma 20 (close) - middle line of the envelope - this lets you to set tight stop-loss as it is a dynamic s-r level also.
good luck
Thanks for sharing this interesting strategy, I’ve back-tested it on four correlating pairs (EURUSD, EURJPY, USDCAD and USDCHF). The results are just amazing! It seems at long-run, 1H time frame is the best. I’m tempted to adopt it as my core trading strategy!!
Hello There PCPounder!!!
I have been Studying your Exp Strag!!! Very Very Nice Strag!!! I have been doing my own Tweeking with it and have found some very interesting tweeks and my favorite indicators that have been added (also with my own tweeking) on the bottom of the charts. Also added 2 moving avgs to the chart at which I always use no matter what strag I use. Now for my tweeking on your settings with your envelope, hope you don’t mind, but as stated, “”“EXPERIMENTAL”"" LOL!!! I just wanted to share my tweeks with you and others to see if approval is good or bad? The same goes for my indicators and the tweeks changed to my liking from the default settings. Have used the crosshairs (clicking the wheel on my mouse) going back in time with your envelope band settings and many other combinations of various changes and using the x hairs for upper and lower bands for false breakouts and for confirmation of up or down outside bands, and have came to my own preferred settings that pretty well conincide very much with each other for an 85% + in movement direction short term for 10 to 20+ and more??? I tweeked your envelope settings @ Period 40, Shift 15 and Diviation is your 0.10%. Like I said, added 2 mov avg of the 200 sma and 250 sma to the chart. I basically use 3 indicators at the bottom,(Believe me, it took some hrs to tweek each one for my best settings) #1 called proCCI (on chart it shows it as ZZI) at which is a zigzag type indicator that has a default set @ 14I tweeked this to set @6. #2 indicator I use is the RSI that has the standard default set @ 14, I tweeked this to set @5. And #3 is the Stochs that has the standard default set @533, I tweeked this to set @333. I have combined all 3 to show an up or down in the same curve crossings at basically the same time so to speak. If you load these up, use your xhairs and scroll over them and it will pretty much coincide with each other, with some lag on the stochs at which I will watch for the 50 xover for confirmation of up or down. #1 indicator is my Primary Pip Grabber, (RSI & Stochs for confirm xover @50) it is best used when the top it turns yellow (I have 130, 100, 0.00, -100, -130) is showing over bought, and I watch for it to start going down and when it (on a closed Candle) turns brown and is below the 100 (or above -100 which has color aqua in bottom range) it is going DOWN for my Pips! The same occurs when its below -100, -130 and turns up and is above -100 on candle close and is Brown it’s Pips Time Again!!! I hpoe this chart shows up on this post, as I’m new too all this posting with pics etc, and I have a Template file saved for my charts and hope to post it here also today. And will try and add the proCCI exe here too??? If not, be patient, and I’ll figure it out soon enough, LOL!!!
Now I will give a brief set up as follows…
TF=1HR & 30MIN (30MIN is Best?) Envelopes set @ Period 40, Shift 15, Deviation 0.10%, add 200 SMA & 250 SMA to chart.
proCCI (ZZI) set @6
RSI set @5
Stochastics set @333
Perfect set up is when proCCI (ZZ1) Yellow or Aqua has appeared, but as you study the charts, you’ll see many buys and sells using this when it is just a brown line!!!
Now Hopefully My Chart, at which I Trade GBPUSD, USDJPY & EURUSD…Oh, and the chart has my own S/R lines…
I hope link shows Pic. And if so, I will try and post the the proCCI zip file for you to use. Xing my Fingures!!! LOL!!!
hotnights…zipfile? xing fingers again!!! Please let me know about my tweeking, this is NOT my sysyem but did tweek it a bit and added my indicators!!!
Give thx to Pipcompounder!!!
PS-Sorry for the chart clarity, did the best i could, darn newbie LOL!!! And I thought I posted 1 30min and 1hr charts, both are 30 min, oh well, back to the drawing board with this posting thing!!!
proCCI.zip (1.36 KB)
thanks for sharing this, will follow upn and back test it,.
Well…All I have to say about this sys (THX to pipcompounders’ envelope sys) is that my TWEEKS paid off on todays (Sunday) opening!!! It is 11:32 PM AZ time, and I just banked 63 pips in 9 trades since the 5:00 PM AZ opening candle to now after it failed to break the 250 sma R !!! I’m done for the night and will be trading at 5:00 am az time to finish testing my new found system after tweeking the envelopes and adding my indicators with my tweek settings on those!!! Just one more day of testing and I’m going Live on my IBFX acct!!!
And Again…MANY MANY THANKS to Pipcompounder and his Trading Sys of the Month Award!!!
I have tried many chart indicators to use with my lower indicator windows, and never tried the envelopes!!! WOW is all I can say!!! Try It, it WORKS for Me!!!
hotnights
Dude! Great post! Im already checking your tweeks on my mt4. This strategy is awesome and its up to us to make it awesomer! =P But I didnt understand when you enter and whether you trade the breakouts, ranges or both.
could you please explain that better?
thank you!
Thx gbr!!! I have the daily chart, 4hr, 1hr, 30min and 15min that have been loaded with all my indies with same settings. I Monitor the 4 and 1 hr closely and trade primarily the 30 min. Also I have a chart with the fibs on it that I move to and from new swing highs and lows. I like to monitor it also for the primary R & S areas. On the proCCI (ZZI on the chart) I wait for the candle to close below the 100 for sells, and just above the -100 for buys, and it must be BROWN. When it’s getting close for a close of candle, I’ll watch the 15min and 1hr for the trend. And I watch the rsi closely on all for the 50 xover and watch the stochs for the same. But it is important that the zzi has turned brown and below the 100 or above -100. And if it’s really in a sell or buy and is brown and close to or inbetween 100 and 50 line it’s generally a go. The 4hr is really a good trend setter. I try to follow the trend direction and watch for the the 2 and 3 candle end, and will counter trade on a pull back, but have my trigger finger ready to close order open all the time. I made a KILLING on the usdjpy yesterday, and on the pull back today. And the 4hr and fibs looks like it has a wave top again as of now??? But I done for the day, and will watch the asian tonight. Hope this helps??? Remember the BROWN. When I Tweek the sets on the procci, I change the lower end color to aqua, and always widen the lines 1 higher to see easy. I hope you got the zip file from my earlier post for the procci indie. And my other post, I think i forgot to say I was trading usdjpy, but this works well on all majors!!!
BTY, and hope this helps, I leave my stop loss open with a mental stop to prevent stop HUNTING!!! LOL!!! And REMEMBER…TREND IS YOUR FRIEND and the asian is usually a Bull Trap or Bear Trap!!!
Later Man and good Luck with this, Man Oh Man is all I can SAY!!! Demo First for a few trades, and Yes, I trade the Range trades also from Band to Band!!!
I’m still confused about the trade game plan. Can you tell me the entries and exits for the ranging strat. and then tell me the entries and exits for the breakout? Thank You.
Does anyone know of an alert indicator which sounds when the price crosses the bands? That would be very helpful. also, I have added a heiken ashi and a major trend indictor (one on top of the other) to give added confirmation. See how when both are red or green, it helps in confirming the long or the short.
