Triple threat exit strategy

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135

As I would say from the world of rts, sick strat yo. I’m liking the way you approach the markets, and am definitely giving this a go next week. I have some newbie questions, perhaps you’ve answered them and if so point me in the right direction and send me away (:

  1. Regarding the actual trading day, you’ve already touched on the point that sometimes the need to adjust stops overnight can be a pain, and to trade this strategy, you need to be able to look at the pairs at least every so often during the course of the day. Can you trade this on a rolling 24 hours? For example, does it matter if I’m using 00:00-23:59 July 24 data to trade the 00:00-23:59 July 25 day data versus using 12:00 July 24-11:59 July 25 data to trade the 12:00 July 25-11:59 July 26 day?
    -Since the day is always starting at 12:00am, it’s easy to miss some big moves that happen when you sleep no? How do you go about this?

  2. Lets say you’re getting ready to open a long position. Do you wait for the 1 hour chart (that’s what you’re using right?) to close higher than the 1 pip threshold or do you just set the stop and trigger in as soon as it hits? Considering how much price can jump around a 10 pip range, I assume it’s easy to get stopped out multiple times, whether it be with entry or any of the three exits. Lets say your “air” and “retrace” are at 1.0000, and price is at 1.0003. So if price jumps to .9999 to 1.0001 to .9999, theoretically you’d be stopped out of both positions? Is this where the judgement comes in to decide whether or not you should actually get out or give it some more wiggle room?

136

Hi rptor
I have an EA which may help. All explanation is inside afaik. This was originally intended for news trading but it has kill functions also… If of no interest just file it in the big O. Hah - OK, BP does not like mq4 files so renamed to txt.
Cheers,
AltosT

137

the issue of what to call a “day” has come up before and this is a good opportunity for me to try giving a thorough explanation all in one place. a discreet data set called “day” is defined by each broker according to their platform. in hourly bars, you will see the day start and a new bar begin to build at 00:00, platform time. in an hour, we will see 1:00, then 2:00, etc. but, depending on where you live and who your broker is, that 00:00 could be any time for you. i trade with oanda and ibfx. oanda’s platform is on eastern time. since i am in the central time zone, oanda’s day for me is 11pm to 10pm. the ibfx day is on gmt and that is 7pm to 6pm for me. in other words, if i am trading ibfx, their day will conclude as, my time, the 6:00 pm one-hour bar or the 6:59 pm one-minute bar finishes. at 7:00 pm, my time, they will begin their 00:00 (new day) bar and that is when i will be at the charts to enter buy/sell stop orders, assuming i want to trade ibfx and use their definition of day for my orders.

to keep some consistency and point of reference, i use ibfx data and their platform day for all results reporting to this thread. the high of the day is the high between their platform time 00:00 and 23:59, and so on. conveniently, the platform allows me to select “show period separators” which, on a one-hour chart, draws a vertical line at 00:00, the beginning of the day. unless the close yesterday just happens to be very close to the high or low for the day, we should have plenty of time to place our entry stops soon after the 00:00 bar begins.

take note that, unless your broker happens to be on the same time as mine, you will come up with different entries and exits. just like if i use oanda instead of ibfx, i get different numbers. sometimes the different brokers end up pretty close together on a day’s data, sometimes not. i have used a utility program called vitrite which can make a chart transparent. select an oanda daily chart, place the ibfx chart on top and make it transparent, line them up and you visually see the differences. for example, eur/usd, june 29, 2012, oanda’s high for the day was 1.2692, low 1.2252, range 140. same day, ibfx high 1.2691, low 1.2431, range 260. this was a profitable day for the method. trading ibfx, eur/usd +25, +75, +75. trading oanda, +45, +25, +25. you can see that, while both platforms were profitable, the differences may get to be significant. i have not done exhaustive studies to determine just how much difference platform times may make and will recommend that you study some time period for your platform and compare results to what i’ve posted here.

now, could you define “day” as any 24 hour period that happened to be convenient for you to trade and would that be profitable? all i can say is, probably. are you going to miss some significant moves if you aren’t willing to set alerts to wake you up or otherwise be available to your computer during the london session? yes. will we ever have an ea that takes care of all this while we sleep? you’ll have to ask someone with more programming knowledge than me. would i have the nerve to use it if we actually had it? no.

could you also use the ibfx timeframe to place orders on a different platform, i.e., enter orders at 7:00 pm central time no matter what your broker’s time is and come very close to replicating results shown here? yes. back to vitrite and we see that when we match up bars using transparent charts, the broker feeds are within a few pips of one another on virtually every bar. in this case, we would be entering oanda trades on the 20:00 bar, which is the 00:00 bar for ibfx, 7:00 pm central. if you were doing this, you would have to enter all orders one at a time by hand and would not be able to use the very handy order entry ea built for us by rpotor which enters orders based on the prior bar.

Read more: 301 Moved Permanently

138

entries are buy stops and sell stops placed as the 00:00 (new day) bar begins. tuesday thru friday, they should trigger at +/- 1 pip from yesterday’s extremes. there is no waiting for a close. i use one hour bars only as a convenient way to watch the markets. you can use any timeframe as long as you get your entries and exits right. it has become a routine for me to shift to a daily bar as the new day opens, use rpotor’s ea to place entry stops, then jump back to hour bars.

i’m not entirely sure what questions are raised by your mention of a 10 pip range or your examples of 2 or 3 pip differences. i may not be understanding, but these tight numbers have no point of reference in the method. let’s say a long trade is triggered. using quarters theory to place stop-loss, you will have an initial sl somewhere between 25 and 49 pips, depending on entry price. per the method, if you entered long at 1.2050, your initial sl would be 1.2025, risking -25 per position. if you happened to enter a pip lower at 1.2049, the method requires that you go back to the nearest whole quarter, i.e., 1.2000 for the sl, risking -49 per position. you would never have an initial sl that was less than 25 or more than 49. there are certainly some judgment calls that come in here, especially when there is a good runup that fails to reach tp and then turns on you. discretion says to move stops. but, our initial “wiggle room” is always 25 to 49 pips.

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on trailing stops, again, think in quarters. you will never have an “air” stop that is less than 25 or more than 49. you will never have a “retrace” stop that is less than 50 or more than 99. a long trade that has gotten out of the woods and gone to sufficient profit at 1.2099 is still one pip shy of the next quarter at 1.2100. this trade will have an air stop at 1.2050, which it achieved by trading at 1.2075. this stop is still 49 pips away. at 1.2099, we will have a retrace stop at 1.2000, 99 pips away. this is where discretion comes in and if price starts to fail the move, we consider tightening stops. if, on the other hand, price trades up at 1.2100, we have the system’s permission to move air to 1.2075, 25 pips away, and move retrace to 1.2050, 50 pips away.

140

Very well explained! Hope this helps the people new to the system

141

thanks, pat. just had to edit it. got my numbers wrong. heh.

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@Pipwoof:

You can change the time settings in your oanda platform to match ibfx. Tools>User Preferences>LOCALE tab

I shifted mine from “system time” to GMT +0. I marked the 20:00 candle with a vertical bar and it now reads as my 0:00 candle.

Let me know if this synchronizes your platforms.

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pip, is that on the fxTrade platform or the mt4? 'cause on mt4 i can’t find that option.

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That’s on the fxtrade. I’ll search mt4 and see if it’ll let me modify that.

Edit: what you can do is create the orders on the mt4 platform and then open fxtrade and modify them if needed. The time may still be off but at least you wont have to place each manually.

I believe for the time in mt4 to match you would have to connect to their London server. I don’t know if they’ll allow it (seeing as we’re in the US) but it can’t hurt to ask.

145

I fudged around with some numbers, that helps a lot. Basically even though halves and quarters intersect at 00 and 50, the Air and Retrace stops are never in the same price at the same time right?

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i believe you have it. the easiest way i have found to keep up with stops when watching the charts is to place horizontal lines at all 00 and 50 in one color, then lines at all 25 and 75 in another color.

147

Thanks very much, think I nailed the expiration part before you posted this, but thanks anyway. Over the weekend I digged through the mql4 reference and just as a quick heads up to all of you guys, I’m at the point where I have a monstrously long chunk of code, which looks a little scary even to me, its creator, so I’m kinda afraid that it might spontaneously come to life, rename itself Skynet and then we’ll have all sorts of trouble. Oooookay so what I’m trying to say really is that I think I [B]might[/B] have been able to program the automatic SL setting into the EA. So we are one step closer to have a fire and forget EA for this strategy. By now, I’ve coded into it the automatic handling of Buy orders only, so it’s still a work in progress, you know you can visualize the EA like Threepio in Episode 1, with all sorts of cables hanging from its stomach… Obviously I couldn’t test it yet, because there are no trading over the weekend, but in MetaEditor it compiled without errors, so at least the coding syntax I seem to have right, but there might still be a thousand and one bugs in it. Anyway I’ll test it over the next week and if it looks okay, I’ll publish it. Also I think if the automatic stoploss setting is done and it works flawlessly, I might also be able to modify the EA to use the exact daily high and daily low prices pipwoof is using regardless of which broker anyone might use. That way, all of our trading results should match pipwoof’s results (of course, individual judgment calls could still be made).

148

rpotor, we appreciate the efforts you are making and are in your debt. thank you.

149

so, i am live tonight with trades. wait! don’t get so excited! it’s one of my smallest accounts and i am trading so small it barely even shows up. but, live it is. went with two pairs, a/u and e/j. so far, only e/j has triggered short at 96.40.

edit 10 pm. my little e/j trade fell close to 96.25. it is monday, all stops moved to 96.50, risking -10 X 3 = -30.

150

looks like we have 3 shorts in our system portfolio:
g/j, short 123.25
a/u no signal, likely to short 1.0447
e/u short 1.2285
g/j short 1.5714

it is monday following a very good week for us. as the sergeant used to say, “let’s be careful out there.”

151

I am also trying this strategy. I am using Hot Forex data. There day opens at GMT+3. On June 29, My buy stop entry was triggered at 1.2527 based on Day Break Entry and my result was +48, +74, +74. (Of course in Demo Trading). Total Result using Hot Forex data for EURUSD for the month of June was only +264. But in July, till now it is up by1200 pips.

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bijoymj, excellent! appreciate you sharing your research with us. keep it up until it gets so compelling you just have to trade it.

your e/u must be on steroids. our take for july so far is +385.

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g/j, short 123.25. has traded to 123.10. move stops to 123.25, risking be.
a/u no signal, likely to short 1.0447.
e/u short 1.2285. move stops to 1.2300, risking -15 X 3 = -45.
g/u short 1.5714. move stops to 1.5725, risking -10 X 3 = -30.

yes, i know they’re tight. you don’t have to agree. it’s just monday and it’s just me.

edit 11:15 pm:
g/j trades to stop, be, be, be.
g/u stopped, -10, -10, -10.

edit: 5:45 am
well, were you as “monday jumpy” as i was? if you weren’t, you have this advantage over my discretionary calls on these two pairs:
g/j, short 123.25. tp hit at 123.00 +25. prints below 122.50, reverses and air out at 122.75, +50. retrace stop at 123.00, locks +25.
g/u, short 1.5714. prints below 1.5675. tp +35. reverses, air and retrace both out at 1.5700, +10, +10.
so, if you chose to play it a little looser, congrats. but, i can’t play it both ways and, for results reporting, will show the outcomes of those judgment calls.

so, here’s where i am:
g/j short 123.25, trades to judgment stop, be, be, be.
g/u short 1.5714, trades to judgment stop, -10, -10, -10.
a/u long 1.0493, all open.
e/u short 1.2285, all open.
this will be the “official” position of the system.

fyi, i did choose to trade the a/u and e/j live this morning:
a/u long 1.0493, sl placed at 1.0475, risking -20 X 3 = -60.
e/j sell 96.40, tp hit at 96.00, +40. both remaining stops moved to 96.25, locks +15, +15.

whatever you decided, gl to all.

edit 7:30 am:
e/j short 96.40. trades below 95.75, both stops moved to 96.00, locks +40, +40.
e/u trades below 1.2250. tp +35. remaining stops moved to 1.2275, locks +10, +10.

“officially”:
g/j, be, flat.
a/u, buy 1.0493, 3 positions open.
e/u, short 1.2285, closed tp +35, locks +10, +10.
g/u, short 1.5714, stopped -10, -10, -10
total closed: +35, -30 = +5.
total locks: +10, +10 = +20

edit 7:35 am:
e/u, short 1.2285, trades below 1.2225. tp +35, air and retrace stops moved to 1.2250, locks +35, +35

Read more: 301 Moved Permanently

154

EURUSD Daybreak July with TT.pdf (185 KB)

Please see the above statement, Which shows gain of +1154 pips in EURUSD in July based on Daybreak & Tripple Treat.

Please note the following.

  1. I used Hot Forex Data
  2. Hot Forex won’t provide any Sunday candles and hence I took Friday as previous day for Monday.
  3. I entered long @ Prev day High + 1 pip + Spread including on Mondays
  4. I entered Short @ Prev day Low - 1 Pip including on Mondays.
  5. I kept trades open on weekends.
  6. I moved stop loss to BE or Few pips profit only after getting 1st position hit TP.

Hope It helps.