Thanks jim, a way to minimise the wrong calls generated by BB has to be worth a look, though I have little faith in indicators and certainly wouldn't pay money for a proprietory set-up. Still, if there's a quick and easy way to refine BB, interested to read about it when you get the chance.
This is a good question pb, and being based on price action avoids the indicator issue. I would like to add a secondary question, does anyone see the break-out from a pull-back as being not only more likely to hit target, but significantly over-shooting the regular target?
pb8856
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I guess because it pulls back and passes the entry point again before continuing its a confirmed breakout and the chances of it trending are higher (that's what I understand from the Phil Newton strategy anyway).
Another consideration could be to avoid trades where the range is near daily/hourly support and resistance areas as these are less likely to be broken...
Another consideration could be to avoid trades where the range is near daily/hourly support and resistance areas as these are less likely to be broken...
Oops. The rules of BB have always set out that you don't try to trade on days when the US market is closed. That means a big well done to those people who followed the rules (unlike me) and traded on the 3 holidays out of the 4 we just had when NY was open but London closed - you would have had 2 out of 3 winners, so well done you.
Note to self - if I make up a rule, I ought to follow it.
Note to self - if I make up a rule, I ought to follow it.
hi tomorton - just wanted to thank you for the intriguing thread - i trawled through the entire thing a few weeks back and have been following a slight variation of what you're doing for 7 weeks now. Was up 299 points until the start of week 7 (this week) - but have had a miserable start this week, stopping out today and closing in the negative yesterday, didn't trade Monday. I like this type of set and leave strategy due to work comments - and also am particulary fond of pure price base systems. So thank you very much for the introduction.
My Rules (your original BB i think):
Buy: BB High+3
Sell: BB Low -3
Stops/Limits : If buy = Buy Price + or - BB Range, if sell = Sell Price + or - BB Range
No trade if BB<85% of ATR (14)
I think the system is good - but I totally agree it can always be improved. I'm not convinced by your tighter point stops (I can't quite figure out the logic of the number of points chosen, so if you have the time perhaps you could explain - AGAIN!), but I've been toying with a few ideas - i.e. making the stops/limits a % of BB range. I think the basis of your tighter point limits was that you would often see a profit evaporate? I'm just wondering if a % say 70/80% of BB as a limit/stop might give us more room for movement to the downside, but also lock in some of those profits that I'm currently losing when price reverses before hitting limit.
Long post I know!! I really just wanted to thank you for introducing me to BB and sharing your experience.
I'm also intrigued by the second crossing of a BB range as you've been discussing - but not quite sure how I could make it work practically without watching the screens.
My Rules (your original BB i think):
Buy: BB High+3
Sell: BB Low -3
Stops/Limits : If buy = Buy Price + or - BB Range, if sell = Sell Price + or - BB Range
No trade if BB<85% of ATR (14)
I think the system is good - but I totally agree it can always be improved. I'm not convinced by your tighter point stops (I can't quite figure out the logic of the number of points chosen, so if you have the time perhaps you could explain - AGAIN!), but I've been toying with a few ideas - i.e. making the stops/limits a % of BB range. I think the basis of your tighter point limits was that you would often see a profit evaporate? I'm just wondering if a % say 70/80% of BB as a limit/stop might give us more room for movement to the downside, but also lock in some of those profits that I'm currently losing when price reverses before hitting limit.
Long post I know!! I really just wanted to thank you for introducing me to BB and sharing your experience.
I'm also intrigued by the second crossing of a BB range as you've been discussing - but not quite sure how I could make it work practically without watching the screens.
Hi doylen - thanks for your encouraging post. I'm not at my own machine right now but I will respond a little later and summarise the current rules (currently v7 but I would not be averse to a v8, v9 etc. as long as profitability increases!).
Actually, I was reviewing performances this morning and wondered myself if the fixed points target and stop distances weren't just too tight - win rate seems to be down to around 55% from 65% when I was using 100% of the BB range: also, I have recently determiend to take every single BB signal, regardless of size of the BB range. There has to be a profitable balanced position between the two.
In touch later.
Actually, I was reviewing performances this morning and wondered myself if the fixed points target and stop distances weren't just too tight - win rate seems to be down to around 55% from 65% when I was using 100% of the BB range: also, I have recently determiend to take every single BB signal, regardless of size of the BB range. There has to be a profitable balanced position between the two.
In touch later.
Hi doylen - Current (v7) rules are basically,
take FTSE100 0800-0900 High (BBH) and Low (BBL)
at 0900, set entry orders long at BBH+2, sell at BBL-2
set long target BBH+13, short target BBL-13
set long stop BBH-11, short stop BBL+11
cancel unexecuted entry orders at 1300
close positions still open at 1300
don't trade on days when US market is closed
one BB trade per day.
For the time being I'm pressing on with these rules, though the rather narrow distance from entry to target or stop leaves the position vulnerable to false starts and reversals. On the other hand, I very am just not finding positions open and in the money at 1pm that I need to close before they have made full distance, so a win is always the full points total.
I like the idea of a more ambitious target: BB ranges 0800-0900 over the last 11 and a bit weeks have averaged 28pts, so I'm going for just under 50% of this as a target.
Very interested to learn how you progress your version of BB.
take FTSE100 0800-0900 High (BBH) and Low (BBL)
at 0900, set entry orders long at BBH+2, sell at BBL-2
set long target BBH+13, short target BBL-13
set long stop BBH-11, short stop BBL+11
cancel unexecuted entry orders at 1300
close positions still open at 1300
don't trade on days when US market is closed
one BB trade per day.
For the time being I'm pressing on with these rules, though the rather narrow distance from entry to target or stop leaves the position vulnerable to false starts and reversals. On the other hand, I very am just not finding positions open and in the money at 1pm that I need to close before they have made full distance, so a win is always the full points total.
I like the idea of a more ambitious target: BB ranges 0800-0900 over the last 11 and a bit weeks have averaged 28pts, so I'm going for just under 50% of this as a target.
Very interested to learn how you progress your version of BB.
Doomberg
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Hey tomorton what does BBH / BBL mean? I did a few Google searches and got stuff like:
Bound by Honor, Bros Before Hoes, Bouncing Busy Hour & Big Black Hole
Also im a bit confused, the rules you explained... did you mean that when the FTSE opens and reaches 13 points up on the day you long, and when it opens and goes -13 you short?
Bound by Honor, Bros Before Hoes, Bouncing Busy Hour & Big Black Hole
Also im a bit confused, the rules you explained... did you mean that when the FTSE opens and reaches 13 points up on the day you long, and when it opens and goes -13 you short?
Rugby Trader
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BBH = Big Ben High
BBL = Big Ben Low
going by the current rules that's the high and low of the 0800-0900 candle
BBL = Big Ben Low
going by the current rules that's the high and low of the 0800-0900 candle
Doomberg I'm going for Big Black Hole! lol.
BBH = Highest point FTSE reaches between 08.00 and 09.00, BBL being the lowest point between 08.00 and 09.00. (Pretty sure that's right tomorton!)
Sorry I just noticed a mistake in what I posted yesterday. I said "No trade if BB<85% of ATR (14)
" however I meant to say "if BBR<15% of ATR(14).
I like you're idea of closing at 1pm. I've had a few winners at 2pm/3pm/4pm - so I'll need to take a look at the numbers and see if they were profitable.
One thing I'm toying with on the targets is a target of 38 points a week. Simple logic really - being very basic and assuming 52 weeks a yr and 5 days a week = 1976. I aim for 1000 points a yr, so this allows for the bad weeks. Once I hit the 38 (using BBR as target most days, unless that will take me over the 38 for the week, but always using BBR as stop) I stop for the week. This might sound like complete nonsense - but I'd be interested in your thoughts?
20 point range today - fingers crossed after a bad Tues and Weds for me!
BBH = Highest point FTSE reaches between 08.00 and 09.00, BBL being the lowest point between 08.00 and 09.00. (Pretty sure that's right tomorton!)
Sorry I just noticed a mistake in what I posted yesterday. I said "No trade if BB<85% of ATR (14)
" however I meant to say "if BBR<15% of ATR(14).
I like you're idea of closing at 1pm. I've had a few winners at 2pm/3pm/4pm - so I'll need to take a look at the numbers and see if they were profitable.
One thing I'm toying with on the targets is a target of 38 points a week. Simple logic really - being very basic and assuming 52 weeks a yr and 5 days a week = 1976. I aim for 1000 points a yr, so this allows for the bad weeks. Once I hit the 38 (using BBR as target most days, unless that will take me over the 38 for the week, but always using BBR as stop) I stop for the week. This might sound like complete nonsense - but I'd be interested in your thoughts?
20 point range today - fingers crossed after a bad Tues and Weds for me!
Thanks for BBH and BBL definitions, RT, that is quite correct.
Hi doylen - you've probably noticed I like the idea of a fixed quantity of points as BB target/stop, and using BBR certainly made me a profit in 2010: using a percentage of BBR as discussed might do better.
However, as for stopping trading when a certain return is reached, I don't understand this in the context of trading. If the odds are against you, such as at roulette, sure, quit while you're ahead, as the longer you play, the more likely those odds will assert themselves and you will be a loser. But quitting when ahead using a system that puts the odds in your favour is surely like being the casino owner and closing when your first punters through the doors this evening have just made a loss - so what, that's what is supposed to happen.
e.g. I didn't trade Monday (foolish error) but am 3-0 up this week so far. That's a handsome return even though I don't use a single week as an accounting period. So I will go ahead and trade tomorrow as the worst that can happen is I will go into the weekend 3-1 up, all trade sizes being identical. After all, the odds are in my favour such that if I made the same decision every week for a year, I would be a winner.
Onwards and upwards!
Hi doylen - you've probably noticed I like the idea of a fixed quantity of points as BB target/stop, and using BBR certainly made me a profit in 2010: using a percentage of BBR as discussed might do better.
However, as for stopping trading when a certain return is reached, I don't understand this in the context of trading. If the odds are against you, such as at roulette, sure, quit while you're ahead, as the longer you play, the more likely those odds will assert themselves and you will be a loser. But quitting when ahead using a system that puts the odds in your favour is surely like being the casino owner and closing when your first punters through the doors this evening have just made a loss - so what, that's what is supposed to happen.
e.g. I didn't trade Monday (foolish error) but am 3-0 up this week so far. That's a handsome return even though I don't use a single week as an accounting period. So I will go ahead and trade tomorrow as the worst that can happen is I will go into the weekend 3-1 up, all trade sizes being identical. After all, the odds are in my favour such that if I made the same decision every week for a year, I would be a winner.
Onwards and upwards!
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I'm reading this with interest and think I might give the system a try. I'm new to trading and the other systems I'm working on are either longer term or require that I sit and watch the market - so something I can do early in the day and leave is appealing.
I haven't read all the thread and maybe I should before asking questions but I'm going to ask anyway. Firstly what % of trades are in the right direction? Also the risk reward seems pretty tight, stops at 11pts and targets at 13pts. Are those figures arbitrary and what effects does changing them have?
I also noticed someone mentioned not taking trades when the opening range was less than 15% of ATR(14) - Given this I was wondering if there was a range of opening range as a % of ATR where the system performed better?
I haven't read all the thread and maybe I should before asking questions but I'm going to ask anyway. Firstly what % of trades are in the right direction? Also the risk reward seems pretty tight, stops at 11pts and targets at 13pts. Are those figures arbitrary and what effects does changing them have?
I also noticed someone mentioned not taking trades when the opening range was less than 15% of ATR(14) - Given this I was wondering if there was a range of opening range as a % of ATR where the system performed better?
Doomberg
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Sorry for not understanding all the terminology here guys, this is really interesting but i am confused a bit about the rules even though i have read back... So if i have it right you set a long TP target +13 above the BBH and also set a a short? Think i may have this wrong, sorry for being slow with this lol
As I understand it you set both orders but if one order is implemented the other is automatically cancelled. So if your long order that buys at 2pts above BBH is executed then your short order to sell at 2pts below BBL would be cancelled and vice versa.
tomorton words of wisdom as always! You even found my penchant for the roulette table lurking somewhere in my trading. I bought a Roulette strategy for 60quid in my university days, based on the law of large numbers (yes, the law of large numbers!)..... proceeded to win 4k (which for a uni student was a lot!) then dumped 2k in 40mins - realised the 4k had been pure luck and vowed never to play roulette again! Spent the remaining 2k on getting very drunk for 2 weeks.
Absolutely take your point on the 38 points - i suppose it reflects my silly irish belief in lebrachauns and not pushing ones luck! Although statistically I do believe in BB - I'm not sure if the number of times we trade will allow the statistics to fully play out and that there could be some element of a "lucky day/week". Spin a roulette wheel 2million times and statistically you should get each number appearing the same number of times, but spin it 100 times and I guarantee some numbers will repeat themselves given the small sample set. So although I believe the statistics, I don't play enough to necessarily let them play out to the full. Sorry, I'm rambling now!
I'm going to do some testing on the % of BB. Can I also raise the ugly head of an MA please? Ever considered using an MA to filter some of our signals? For example only putting the high or low entry point in depending on where the EMA(20) on hourly bars is heading. Think it might dilute a very good price only based strategy? By the way I havent made a single change to the strategy ive traded for 7 weeks - and I'm happy with the performance - I'm really just thinking out loud!
I'm 2-1 down this week (picked up 20pts today), so hoping for a good finish to the week tomorrow. Ballot for Champions League final opens tomorrow, lets hope my luck holds....
Absolutely take your point on the 38 points - i suppose it reflects my silly irish belief in lebrachauns and not pushing ones luck! Although statistically I do believe in BB - I'm not sure if the number of times we trade will allow the statistics to fully play out and that there could be some element of a "lucky day/week". Spin a roulette wheel 2million times and statistically you should get each number appearing the same number of times, but spin it 100 times and I guarantee some numbers will repeat themselves given the small sample set. So although I believe the statistics, I don't play enough to necessarily let them play out to the full. Sorry, I'm rambling now!
I'm going to do some testing on the % of BB. Can I also raise the ugly head of an MA please? Ever considered using an MA to filter some of our signals? For example only putting the high or low entry point in depending on where the EMA(20) on hourly bars is heading. Think it might dilute a very good price only based strategy? By the way I havent made a single change to the strategy ive traded for 7 weeks - and I'm happy with the performance - I'm really just thinking out loud!
I'm 2-1 down this week (picked up 20pts today), so hoping for a good finish to the week tomorrow. Ballot for Champions League final opens tomorrow, lets hope my luck holds....
I'll try and explain - I'm thinking that if the MA is pointing up at 9am, I'll only put a buy order on the BBH+3 and ignore the sell of BBL -3. If it's pointing down i'll do the opposite. If it's flat I'll stick to normal BB rules. (I'm trading CFD with Capitalspreads by the way) Please please please don't take that as a suggestion! I'm just raising it to the boss to see what he thinks - i really like the simplicity of BB.
Doomberg
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doylen, i think i understand now.. thanks, so if its up at the close of the 8 o'clock hour candle you put the Order at 3 pips above the close of this, so BBH + 3.. but what about stop losses and profit taking? Where abouts do you expect to close winners, and where do you close a losing trade.. thanks, and hello all to those that don't know me :cheers:
Hi Doylen - I really like the simplicity of it as well - I'm paper trading a spread betting account for now and if I've learnt anything its that having simple rules to follow is good for me. Of course one wants to improve the rules but that takes away from the simplicity of the thing.
My concern with a MA at 9am is that it would reflect overnight trading and that might not be a good indicator of how things will go during market hours. I'd wondered about using a pivot point - so if the BBR was more than 50% above the pivot one would go with the buy order and if it was more than 50% below go with the sell order - might actually work better with thirds - middle third being normal BB rules.
My concern with a MA at 9am is that it would reflect overnight trading and that might not be a good indicator of how things will go during market hours. I'd wondered about using a pivot point - so if the BBR was more than 50% above the pivot one would go with the buy order and if it was more than 50% below go with the sell order - might actually work better with thirds - middle third being normal BB rules.
