So you want a system that actually works?

Bluewave

Active member
240 2
Rubicon River said:
Hi,

I would be grateful if you could explain what you constitute as a breakout and how you calculate it.

thnx

Ditto, how are you determining what is a "breakout"? Are you judging this from previous support/resistance levels, if so, for how many days/weeks back?

It's easy to spot a breakout in hindsight, at the end of the day with the enitre chart before you, but on a candle by candle basis (hourly ones at that!), it's hard.

I would also be interested to know how you're generating trades automatically, because as FC says, this system would mean a long day infront of the screen ;)
 

JonnyT

Senior member
2,560 22
A few replies!

Bluewave: A breakout on hourly candles/bars is very easy. The market simply moves beyond the high or low of the prior hour. You don't have to sit in front of the screen all day as you can set up limit/stop orders with conditional orders attached.
Yes I have written software that can trade this system fully automated without me being present

PS are you the guy who develops systems on www.bluewavetrading.com such as zones?

Eureka: A very subjective question. How far back do you go? Do markets change? People should always but always verify any claims themselves as there have been many systems posted here that do not work. Thats why I put this one up for debate.

Crossroads: I'm aware of the 27/23 system, but this is nothing like it. This is better. The 27/23 took a single trade a day when the market moved 27 pips one way or 23 pips the other from the 07:00 GMT open. I guess they are both breakout systems but thats where the similarity ends.

DonaldDuck: Agreed the figures may not be etched in stone but every Forex system I backtest likes the 30 pip stop for some reason! Seems to be a good pointer whether you have caught the trend or not. Very few systems do not change as time progresses, I knocked this one up in an hour and haven't developed it further as yet. I just used the KISS principle.

75Again: Have a look at the IB website. If you open an account you can download the sample apps in Java, C++ and Excel. There is a discusion forum on IN and a great helpful yahoo group on http:/groups.yahoo.com/groups/TWSAPI

ColinRichie: Drop me a PM and I'll send the Hourly data. However this is tested using 1 minute data not the hourly data as you cannot say that a stop hasn't been triggered from the hourly data as this market can swing abruptly.

Is anyone develops this idea further, carries out more backtesting etc then please share the information with me. Its only fair isn't it?

HTH

JonnyT
 

Bluewave

Active member
240 2
JonnyT said:
A few replies!

Bluewave: A breakout on hourly candles/bars is very easy. The market simply moves beyond the high or low of the prior hour. You don't have to sit in front of the screen all day as you can set up limit/stop orders with conditional orders attached.
Yes I have written software that can trade this system fully automated without me being present

PS are you the guy who develops systems on www.bluewavetrading.com such as zones?

Dang! There goes my future idea to set up a "Bluewave Trading" site. lol. Alas, no Jonny, I am not the "Randy one" (sorry, couldn't resist!) who runs that company and website. In fact, on quick perusal their systems flummoxed me somewhat - great system names though: "Tidal Wave", "Tsunami" and "Area 51" ;)

Re: Candle breakout. Yes, ok, of course, a breakout must be when the previous hours low/high is breached. But on a typical FOREX market, doesn't that produce a lot of false breakout signals? Why not use a low-period EMA to catch the trends and then stay with the trade until the price jumps the EMA for 2 hourly bars?

Re: limit orders/stop orders. As a user of Finspreads, unfortunately their online system doesn't allow for conditional limits to be set up beforehand. You have to start a trade first, then set the closing stop. I think u have to telephone such orders which is a bit silly when everything else can be done via the website! I understand other SB companies do allow this though, such as City Index and IG Index.

Anyway, at least you are clever enough to have written your own software to trade for you :D
 

JonnyT

Senior member
2,560 22
Re: Candle breakout. Yes, ok, of course, a breakout must be when the previous hours low/high is breached. But on a typical FOREX market, doesn't that produce a lot of false breakout signals? Why not use a low-period EMA to catch the trends and then stay with the trade until the price jumps the EMA for 2 hourly bars?

That would be a different system. Does it work?

JonnyT
 

garyp75

Junior member
14 0
Johnny,

Looks good thanks - inevitably a few questions:

- Why the future and not the underlying? What difference does trading the spot make?

Bluewave I use IG and they don't allow conditional orders online, don't know about City though? D4F does but giving them my money makes me choke...
 

johnk49

Member
62 0
EUR/USD signals

Am I missing something here?I have the hourly bars up on FXtrek charts and the highs and lows don't match anything like the signals jonny quoted!

What am I doing wrong?
 

JonnyT

Senior member
2,560 22
Hi Garyp75,

1) The EUR/USD future has a 1 pip spread, it is cheaper
2) The EUR/USD future is traded on a proper regulated exchange
3) I am not subject to quote manipulation by a Forex Market Maker
4) I can automate easily and for free through www.interactivebrokers.com API
5) The system works on the spot, it moves in a very similar manner to the future albeit the quotes are usually 10-20 pips different.

JonnyT
 

johnk49

Member
62 0
EUR/USD Futures

Aah I see!!Thought I was going crazy!

Btw,does the EUR/USD futures move the opposite way from the USD/CHF as in Forex?Just thinking if they did,you could have 2 sets of signals.Could you not?
 

garyp75

Junior member
14 0
Wow! A 1 pip spread!

I guess that using my IG Index account is really going ruin this system then. They have a 12 pip spread on the EUR/USD March.
 

eureka

Junior member
19 0
ok Johnny / others - we can spend eons fretting over the details of this system here - there are professionals out there whose business is to test these rigorously - they have the resources and expertise in doing just that, and have been for decades - for example, check out www.futurestruth.com - yes you will have to pay them to get it backtested properly if you wish - but hey, it's your choice or otherwise you keep trading it BLINDFOLDED FOR FREE - or why not get one of their systems that has been tracked for years? - ...actually having thought about this more for a minute here - i did have a period when i spent months testing various systems...gave it all up, none test out profitable long-term - i have been a discretionary trader since - so perhaps this was not the place for me to post at all - it's just that Johnny's description of "actually works" made me look here - i hope this system works for you.
 

JonnyT

Senior member
2,560 22
Eureka,

Futures Truth proves nothing!

There are systems that blow away these. I have one that I will never ever submit to Futures Truth or to the public, it is simply way too hot. It has been backtested over 3 years and has safely produced 400%+ per annum using the futures truth criteria and not increasing the number of contracts etc.

Abberation I believe that has a good record on futures truth suffered a massive drawdown this year...

Don't beleive all that you read, there are ways to make money systematically but it isn't with index futures...

JonnyT
 

darrenf

Well-known member
481 3
jonnyt

do you know of any software I could buy specifically for backtesting strategies on fx?

I don't need a full trading package, and I don't want to automate a system, but I would like to be able to back test my own ideas to see if they work over a reasonable historic time period before going live and actually trading them.

Also, once you have the software to analyse, where do you get the data from?

PS you should bear in mind that I am "technologically challenged" and anything requiring programming would not be ideal!

Cheers

Darren
 
 
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