Small Consolidation Breakout Method

[Roels Major]

Hi, Indo-Investasi Family.....

 

Good day for everyone

 

Just wanna get your intention about this method for a while.....As a breakout only trader i keep looking for a best breakout strategy and found this on ff. I think this is superb breakout strategy :

hxxp://[email protected]/showthread.php?t=302007

 

Or, you can Google to get more background 'bout this system :

Stairstep Breakouts

 

Do you think that we can enhance it more?

I thought the answer is absolutely Yes with all your great help.

 

The screenshot the latest version indie of the Squalou :

 

http://i600.photobucket.com/albums/tt90/RoelsMajor/Thelatest.jpg

 

 

Note : I got banned there by the owner FxH, coz a little bit "naughty", he is a good person but a little bit harsh, ups, or maybe just hard.

Sorry RoelsMajor, you don't have the credentials required to access this page. If you can't post to a certain thread, you might be blocked by the thread-starter (learn more). If you believe you have reached this message in error, please contact us. [/Quote]

Edited September 20, 2011 by Roels Major

[Roels Major]

This is the latest probability i have found :

 

Yes, Sir Wolf, i had the same thought. I feel the benefit when we know how much pips left to grab, even sometime the past do not show the future, the statistics should be right or close to reality (someone said it :domesticated fluctuations around the mean).

 

This is will make our way to determine how to exit sweetly and grab more pips, and that will increase our percentage to win.

 

Talk about what we do to exit, what is the way you prefer more :

This is my data from GU, EU, and UC in September until today (Sept 19, 2011)

1. Fix Take Profit : 1:1 R/R, 16:3 Win Loss, about 630 pips.

2. Fix TP 30 pips : 17:2 Win Loss, about 420 pips.

3. Trailing Stop method : Fail or my head crash...say 100 pips.

4. Your way of this max pips range from potential profit trades to shoot : GU range : 33pips to 78 pips, EU range : 50 pips - to 446 pips, UC 43 pips to 690 pips, I haven't count it yet cause my head will have crash too.....

[/Quote]

Edited September 20, 2011 by Roels Major

[Roels Major]

The Latest Indie :

http://www.4shared.com/file/u0GDsAZy/sqDynamicBreakoutBox.html

 

The Latest Method :

 

 

Fxh :

Here are the steps I use to setting up my charts:

 

First, I only trade using a hard pip value (ADR=False), but I use the ADR for finding that hard value as I set up my individual templates.

 

1. 24 bars/0/0/ADR=True=100/.2. Recommended for M15 charts. For other TF's, the bold settings need to be adjusted.

 

2. Make a standardized master template with the above settings which can then be dropped onto any M15 pairing.

 

3. This master template will immediately show the average height of the CZ's found on that chart. Simply look for the values painted under each CZ. Say the numbers for the last few CZ's are 27/31/29/29/30/33. So it's easy to see that 30 is a good height to go with. Maybe even 28 or 29 if you want to go for a tighter (better quality) CZ. If the values are more like 12/12/15/11/12/13, then 12 would be my hard pip setting for that pair -- and this is basically what I see when I test U/J this way.

 

4. Once you have made this master test, simply change this value: "0" to: 12 (or 30, or what ever), and switch the ADR to False. Your template is exactly the same as before, except that now you are finding CZ's based on a hard pip value.

 

5. Save this new template with the pair name. Now you have the original master template, plus one for the specific pair. The whole operation took less than 2 minutes.

 

I have about a dozen customized templates made exactly this way, which allow me to trade with a hard pip value for any pair and any time frame I am comfortable with.

 

For smaller time frames I recommend adding more bars (e.g., 30 or 40 instead of 24), and less for higher TF's.

 

Note: In all of my testing I have only seen 2 pairings where the CZ ought to be bigger than 30 pips high. One is XAU/USD, and the other is a regular pairing, which I have set to 40. Otherise, it's always 30 pips or less. (Haven't tested Silver or other metals, etc.) But no matter what, it's the ADR for testing, and the hard pips for trading.

[/Quote]

 

Note : We are just looking for 3, 4, or max 5 breakouts a week per pair, and we are looking for beyond 30p box although sometime there is pairs that have box above 30p as "sweetspots", and this is not always in system. The Author FxH doing more strictly by just 3 breakouts only per pair to trade a week.

Edited September 23, 2011 by Roels Major

[Roels Major]

The Basic on Pics :

 

http://i600.photobucket.com/albums/tt90/RoelsMajor/ar1.jpg

 

http://i600.photobucket.com/albums/tt90/RoelsMajor/small-300x216.gif

[soundfx]

Hi Roels Major,

 

This is a thread all manual traders should be reading :)

 

The CZ (Consolidation Zone) indicator is a great piece of coding and is the first indicator of its type I've seen.

 

Normally we try to determine areas of consolidation by just "eyeballing" the charts, and to see these zones marked out clear to see with an indicator is great.

 

Typically, breakout systems tend to be based on the Asian range (yawn ;) ) or trendline or swing high/low breaks. Over the course of time these systems will be net profitable though will never make anyone a millionaire ;)

 

However, consolidation zones are hugely powerful, they are like a "coiled spring" and as soon as price bursts out of one of these zones and doesn't spike and fall right back in, we're normally looking at the very start of the next big move (which means lots of green pips for very little risk).

[Roels Major]

The Latest Indie and History :

VERSION "v1.12" "2011.09.09"

 

sqDynamicBreakoutBox.mq4, by Squalou, start 2011.07.05:

* - draws Dynamic Breakout Boxes based on consolidation areas;

* - consolidation areas are defined by a minimum period of time during which

* the Range of PA remained below a minimum Range value;

* - Inputs:

* - BoxLength and BoxTimeFrame: define the minimum duration of the congestion areas

* Better than specifying a number of bars, because this will not independ

* on the chart's timeframe;

* - BoxRange: the Box Range in pips;

* - AutoBoxRange (true/false), AutoBoxRangeDailyATRperiod(=30) and AutoBoxRangeDailyATRfactor(=0.25):

* to automatically determine a the Box size based on Daily ATR, rather than a fixed size.

* - BoxBufferPips: draws the Yellow and Magenta "breakout" lines at this distance from the actual Box;

*

* This indicator was inspired by a thread opened by "forexhard" on ForexFactory.

* Thank you forexhard for this!

*

* - History:

*

* - v1.12 (2011.09.09):

* Now that the CZ Box stretches until the breakout occurs, it will also stretch until it reaches its maximum allowed height;

* Therefore the box edges and TP levels will CHANGE in these conditions.

* Buy/sell signals could wrongly trigger when the previous 2 candles would close on OPPOSITE sides of the box (consecutive up and down long candles);

* Fixed possible zero devide error when BoxBufferPips=0;

* Cosmetic changes:

* the signal arrows are now placed at the left of the entry candle, and point to the exact entry price;

* BO and BOCont lines adjusted to where they should be starting/ending;

*

* - v1.11 (2011.09.08):

* CZ boxes now stretch until PA breaks out of the BO; the Box size label now also shows the length of the Box (e.g "36p x 26" for 26 bars);

* Buy/Sell signal arrows are printed when MinBarsClosedOutsideBO bars have closed outside the BO levels;

* added "ShowTPLevelsOnLastBoxOnly" input;

* last Fibs now extend beyond the current last candle

* price labels on last box made bigger; controled by "BreakoutPriceWidth" input;

* added "ShowDisplayPanel" input;

* fixed DaysBack=0 case (was limiting to about 578 days max)

* changed default colors to a "blueish" palette;

*

* - v1.10 (2011.08.25):

* added "MinBarsClosedOutsideBO" input: number of bars to close outside the BO levels to signal trades; 0 means "enter immediately on Breakout"

* added email and alarm options: "SignalMail" and "SignalAlert";

* added cosmetic inputs: "TP_is_pips_above", "BreakoutBoxFontSize", "SwingLabelsFontSize", "BreakoutPriceColor", "BreakoutBoxContPriceColor";

* change: TP levels should be calculated based on the Box itself, NOT counting the bufferpips;

* CAUTION: FIXED TP pips are counted based on the BUY/SELL ENTRY LEVELS,

* whereas TPs based on FACTORS are calculated from the BOX EDGE LEVELS independently from the BoxBufferPips input;

* Therefore, changing BoxBufferPips will only affect FIXED PIPS TP levels.

* fix: TP9 was not showing;

*

* - v1.9 (2011.08.22):

* added "ShowTPLevels" input to allow hiding them;

* changed the display panel a bit;

* changed default settings:

* DaysBack is set to 100(days) to limit the cpu load;

* all TP levels are now set to the last fib factors proposed by Mer;

* the minimum value for a TP level to be taken as a pip number is 20 (was 10);

* optimized cpu load;

*

* - v1.8 (2011.07.25):

* added drawing of "Fib levels" for up to 9 TP targets on each side of the CZ Breakout areas;

* new inputs: TP1..TP9 values: when <10, they are taken as a factor of the "Breakout Extent" (=Box extent + BufferPips), else they are in pips;

*

* - v1.7c (2011.07.22): more cosmetics... new inputs: "SwingLabelsColor","Fonts";

* - v1.7b (2011.07.21):

* more cosmetics... added a "box continuation rectangle" on each Box (selectable color with BreakoutBoxContColor),

* and price labels at the right of the last box continuation rectangle;

*

* - v1.7a (2011.07.20):

* - added various cosmetic inputs (StatsColor,StatsBGColor,StatsCorner,BoxVerticalLineDelimiter,BoxVerticalLineColor);

* added a "background" to the Stats area;

*

* - v1.6 (2011.07.20):

* - Display each Box size in pips;

*

* - v1.5 (2011.07.12):

* - added "AutoBoxRange" (true/false), "AutoBoxRangeDailyATRperiod"(=50) and "AutoBoxRangeDailyATRfactor"(=0.20) inputs:

* when true, will use AutoBoxRangeDailyATRfactor*daily_ATR_value as the BoxRange value;

*

* - v1.4 (2011.07.11):

* - added saving of statistical data into a CSV file saved in (mt4)/experts/files folder;

* the CSV file name is on the typical model "EURUSD-sqDynamicBreakoutBox(4x60min,30p).csv"

* Controlled by "CreateStatisticsFile"(true/false) input;

*

* - v1.3 (2011.07.08):

* - added statistical data on maximum Buy/Sell expenctancy for each "Session";

* max Buys and Sells for each Session are indicated on the chart itself,

* the total and average maximum pips are displayed in the upper right corner;

*

* - v1.2 (2011.07.07):

* - added drawing of vertical lines marking the bar on which the Box initially formed;

* This helps locate the Boxes compared on other indicator windows.

*

* - v1.1 (2011.07.06):

* - added "BoxBufferPips" input, draws the Yellow and Magenta lines at this buffer away from the formed Box;

* These are your real breakout lines;

*

* - v1.0 (2011.07.05): initial version;

[Diesel 10]

Thanks for sharing this Roels. I would say in looking at this on EU, 1/1 = 30 pips risk to reward (i.e 30 pips tp and 30 pips sl) and if you get in a trade that hits the stop loss, immediate reverse direction. That indicator is awesome. Thanks especially for that.

 

Cheers!

Edited September 20, 2011 by Diesel 10

[Roels Major]

Thanks for sharing this Roels. I would say in looking at this on EU, 1/1 = 30 pips risk to reward (i.e 30 pips tp and 30 pips sl) and if you get in a trade that hits the stop loss, immediate reverse direction. That indicator is awesome. Thanks especially for that.

 

Cheers!

 

I would say no more trade per pair if you hit your stoploss, just take the first signal after breakout only, but afterall, the choice to reverse or swing trade is yours. You can trade anypair you like after find the sweetspot, eg : use the master template and me prefer look back for 30 day, to find the magic number (the method described on post #3), i prefer the biggest size or number on the last 30 day to limit the breakout, then i will restart this on the first day next month.

 

The signal or arrow in the indicator produce by 2 consecutive closed candles beyond or above the buffer line no matter what candles they are (bullish or bearish).

 

I prefer to set the buffer : 3 pips.

[Roels Major]

My sweetspots for pairs this month :

 

1. GBP/USD : 28

2. EUR/USD : 34 (too big, but the number of the breakouts just okay, about 2.7 per week)

3. USD/CHF : 26

[soundfx]

Hi Roels Major,

 

Not that I'm paranoid about brokers being out to continuously skin us alive like some traders lol...

 

Out of interest, have you tried looking for two consecutive closed candles which are not standard MT4 candles?

 

e.g. if you normally trade 5m charts, instead create a 10m chart and attach the sqDynamicBreakoutBox indicator to that instead and look for 2 consecutive closed 10m candles. Ideally those candles need to also close with High, Low and Close above or below each other depending on which direction you're trading the breakout.

 

Attach this indicator (Period_Converter_Opt ) to a 5m chart:

 

http://www.multiupload.com/UV15ZTWX7S

 

Ensure that "Allow DLL imports" and "Allow external imports" are ticked.

 

Then in the main MT4 menu go to Open -> Offline and double click on the 10m chart.

 

You can attach whatever indicators you like to the 10m chart.

 

The parameter PeriodMultiplier in the Period_Converter_Opt indicator determines your timframe.

 

If you want 3 minute charts, then attach it to a 1m chart and set PeriodMultiplier to 3 and you should see a 3m chart appear in the offline charts list.

 

Note that although these charts are called "offline", the indicator ensures that they're updated with every tick in the same way as a normal chart :)

 

I see so many failed breakouts (aka head fakes, fakeys etc.) that I suspect that using unconventional timeframes we can nail the true breakouts more accurately.

 

For anyone who wants to experiment with this idea for this system (or any other system which is determined by candle closes) try using 13m charts for starters because 13 is normally considered an unlucky number, so if brokers/dealers wanted to catch out your average "joe punter" they'd be sure to use something like this which the vast proportion of traders would steer well clear of...

Edited September 20, 2011 by soundfx

[Roels Major]

Hi Roels Major,

 

Out of interest, have you tried looking for two

 

consecutive closed candles which are not standard MT4

 

candles?

 

No, I have not. The only TF I have tried is 15M. My only Frame is 15 minutes.

Maybe this reviews could help answer that problem :

 

Mahnooj :

Hi Imran,

Thanks for the feedback, however could you please clarify

 

would you be following the main rules of FH if you would

 

have sold at a higher level (I mean to say you would have

 

shorted within the box itself or within the buffer line),

 

as of now I'm trading exactly by the rules and am trying

 

to find a way to minimise my losing trades as you

 

said...[/Quote]

 

 

Imran :

That's a good question!

 

With due respect to FH, I believe I'm still following the

 

rules in spirit. There WERE two closes outside the

 

buffer, so I filtered the set-up further based on my own

 

way of trading M5 charts.

 

Let's not forget, most everyone here are trading M15.

[/Quote]

 

FxH :

Imran, your last message leaves me with a question for

 

you. According to my basic rules, on the M5 you are

 

waiting for at least 2 consecutive closes outside the

 

buffer (10 mins). On top of this, you are waiting for a

 

Fractal to form, which is at least another 2 to 4 bars

 

(10-20 mins), for a grand total of 20 to 30 minutes of

 

waiting time after price has crossed the buffer line. On

 

M15 you would be waiting just 15 minutes and no more. So

 

my question is, what benefit is this extra time giving

 

you exactly?

[/Quote]

 

RoelsMajor :

I got the same problem Squalou.....USD/CHF TF15 shows two subsequent CZ's but when i switch to TF30, it only shows one CZ's.....

My set is 24x15/ADR 50x0.20

 

TF15 (30 box = 1.6 per week)

TF30 (20 box = 0.5 per week)

[/Quote]

 

Squalou :

 

@FH: i will still reply to this one because it needs clarification, and it may be that there actually is a flaw in the indicator code around this.

The settings do include the TF parameter for finding the boxes, which should NOT affect the resulting boxes drawn on the screen, whatever the TF you choose to display your chart;

When boxes are to be found on M15, they should show up the same on M15, M30, or H1 TFs, because the boxes should not depend on the displaying parameters.

So there is something wrong with the indicator here.

 

sashadeol also had similar remarks earlier;

my answer was just an explanation of how the indicator handles the BoxTimeFrame input, without giving any justification that it is how it should be handled.

 

Analysing again these particular cases clearly shows an issue.

 

I have the same behavior on my charts as what both sashadeol and RoelsMajor reported, so hopefully i can work on fixing it.

 

Taking RoelsMajor last report as the basis:

settings are 24xM15, which convert to exactly 12*M30 bars, so there is NO round-down effect in this example (as opposed to sashadeol's report), but still we get this unexpected behavior.

"The Truth is Out There"

 

I'll find it !

 

Sq

 

[/Quote]

 

FxH ;

Are you saying that if the TF setting is set to a hard number (e.g., M1), then any (and all) CZ's painted on the M1 chart should then also show up on any higher TF as you click higher and higher up the TF scale in addition to the CZ's found naturally on the higher TF? Or that all H4 objects should translate downwards all the way to M1, in addition to all the CZ's found naturally on the lower time frames in between?

[/Quote]

 

Squalou :

not exactly: the BoxTimeFrame sets the TF on which the indi looks for CZ;

This should be independent from the charts TF.

The indi will only look for CZ of the BoxTimeFrame input, not the ones for the chart's TF.

Unless you set BoxTimeFrame to 0, which means "search CZ on the current chart's TF".

Example:

BoxLength =24, BoxTimeFrame =0:

chart TF=M15: => this would be eaquivalent to 24 / 15

chart TF=H1: => this would be eaquivalent to 24 / 60

 

But with BoxLength =24, BoxTimeFrame =15:

chart TF=M15 or M30 or H1 or M1 should NOT make any difference: both should show the 24/15 CZ boxes only.

 

I think it's more consistent like this.

 

Sq

 

[/Quote]

 

Ahhh....That was the Story....But anyway thanks for the period converter....It is the great work....

Edited September 20, 2011 by Roels Major

[Roels Major]

New CZ's on GU

 

Anyone experiencing it?

 

http://img577.imageshack.us/img577/1741/songu20sep.png

Edited September 20, 2011 by Roels Major

[Roels Major]

My style on taking breakout :

 

First i turn off the consolidation zone extension price, than adjust buffer line to 3 pips.....I put the stop loss on the other side of the buffer line and count it from the open price to determine 1:1 R/R target pips shot.

[Roels Major]

A new version coming :

sqDynamicBreakoutBox.mq4 v1.13 !

Here is the v1.13 version of the indi.

 

It mainly provides improvements on the statistical area:

 

- the indicator now simulates "trades" taken from the trade signals, and cumulates the "best result" for each "trade", not just the best-buy/best-sell per session/box;

An "open trade session" is "closed" when trade would hit the SL, but the actual "pip count" taken for this trade is its best positive extension (best swing before the SL is hit);

A new box forming also closes any open "trade session".

Only ONE trade is taken at any time, even when multiple consecutive signals appear for the same direction;

The stats summary now displays the total number of TRADES taken, the cumulated best "pip count", and the average "best pip count" per trade;

 

- added "MaxBreakoutTradesPerBox" input (default=1);

this is the maximum number of "trades" taken and shown for each CZ Box session;

Any additional signal past this number of trades is ignored until a new box forms;

Defaults to 1: only 1 trade per Box is counted, then wait for the next CZ box.

Set it to a very high number (999 for instandce) to count and show all breakout trades;

Set it to 0 to disable trades plotting and counting -- this will also disable statistical results, though.

 

- added "SL" input (default=1.000);

this is a factor of the Box size, or a fixed-pips amount if greater than "TP_is_pips_above";

The SL is converted to a pip count, then applied to the trade open price;

There is no option to set the SL at the opposite CZ Box;

 

 

There is no BreakEven option in the indicator.

 

 

You can of course play with the "MinBarsClosedOutsideBO" input to see the impact on the trades expectations.

 

Possible improvements:

 

- separate max trade count for buy and sell directions ?

 

- determine the win% based on a set R:R ratio ?

 

- collect win% for each TP level, in order to adjust TP levels so that we get specific win% ?

- set TP1 to get a 90% hit

- set TP2 to get a 80% hit

- set TP3 to get a 70% hit

etc

Just an idea.

 

 

- I haven't fixed the issue with the chart's TF yet... will do in another version; for now, just use a TF that is consistent with "BoxTimeFrame";

 

 

Have fun!

 

Sq

[/Quote]

 

hxxp://[email protected]/attachment.php?attachmentid=789138&d=1316535398

 

http://www.4shared.com/file/8xIDKwrD/sqDynamicBreakoutBox_2.html

Edited September 21, 2011 by Roels Major

[Roels Major]

New CZ.s forming on GU ad EU....

GU had a succesfull trade yesterday for banking 42 pips.....

 

But after using the new version, my information numbers on breakouts has increased to 4.5 in GU and 4.8 in EU, UC still have 3.5 per week.

 

http://i600.photobucket.com/albums/tt90/RoelsMajor/Contoh1.jpg

 

http://i600.photobucket.com/albums/tt90/RoelsMajor/Contoh2.jpg

Edited September 21, 2011 by Roels Major

[Roels Major]

Perfect break example on GU just now, it can bank 37 pips as the R/R 1:1

EU still fighting for 50 TP.....

 

Perfect picture of the month :

 

http://i600.photobucket.com/albums/tt90/RoelsMajor/PerfectbreakexampleGU-1.jpg

Edited September 21, 2011 by Roels Major

[Roels Major]

Part of our is lose, almost win with 47 pips, but the price has reversed

 

Lost 51 pips in EU.

 

http://i600.photobucket.com/albums/tt90/RoelsMajor/Lost.jpg

Edited September 21, 2011 by Roels Major

[csn]

Do you have a pdf/doc outlining your strategy?

[Roels Major]

Do you have a pdf/doc outlining your strategy?

 

This is not my strategy, is everyone strategy inspired by Forexhard in another forum, but if you read from the post #1, I am pretty sure you will have more background about outline of this strategy. The small consolidation is all about, unfortunately I don't have that pdf here.....

 

Try to google this : stairstep breakouts, you will have more information about this.

[Roels Major]

Look at these perspective :

 

http://i600.photobucket.com/albums/tt90/RoelsMajor/NewPicture-59.jpg

 

http://i600.photobucket.com/albums/tt90/RoelsMajor/NewPicture1-23.jpg

 

http://i600.photobucket.com/albums/tt90/RoelsMajor/NewPicture2-7.jpg

[Roels Major]

Add new USD/CAD sweetspots for waiting list, so my sweetspots for pairs this month :

 

1. GBP/USD : 28

2. EUR/USD : 34

3. USD/CHF : 26

4. USD/CAD : 19

[Roels Major]

837 viewer, but only 20 replies already, i got no luck people to attract you post your depth here.....

[Trader99]

Hey Roels...

 

You have got my attention :-) ....I am currently reading the original thread on FF.

 

T99

[shabz]

If you think of the consolidation areas as the place where Buyers & Sellers are battling each other and there is a stalemate, until one party steps forward with enough conviction to bid the price higher or lower to break out from this range. It is this increase in conviction from one side that will move the price. It could be a news event that causes this to happen.

Basic Supply & Demand, I think Sam Seiden stuff is similar, he talks about Drop Base Drop/Rallies and Rally Base Rally/Drop, the Base being the congestion zone.

[mangiare]

Hey Roels...

 

You have got my attention :-) ....I am currently reading the original thread on FF.

 

T99

 

Hi, me too Roels Major! it's interesting read. Thankyou for sharing here.