Trading Daily High/Low breakouts inline with Weekly & Monthly Candles

[erebus]

Dale / others,

Has anyone heard of this concept?

Look at previous Month candle e.g. Up or Down

Look at previous Week candle e.g. Up or Down

IF Month candle was DOWN and Week candle was DOWN

Don't trade Mondays, but if that candle is UP, then trade the breakout to the DOWN side

If no entry Tuesday due to another UP candle, set breakout trade below that candle, and so on

Until entry into the hopefully, resuming trend

Some pictures to follow, this is the EUR/USD

Some guys on another forum reckon they are cleaning up

Sadly, they will be missing out on EUR/JPY as it had UP month in February

Stops, take profits all up to your own experience / risk tolerance / confidence

Questions / comments / criticisms / your thoughts ?????

 

[hafizhanif84]

i had seen this method before in forex forum called carigold..similar setup as u mentioned above

 

[erebus]

Interesting, are you still active there? Can you check if they are claiming any sucess?

As it turns out, EUR was up on Thursday, gives another breakout entry point.

Disappointing that this method excludes EUR/JPY for this month due to the last UP month

Maybe back with vengeance next month, plenty of room below!

 

[erebus]

How easy is this?

This is a longer term method folks !!!

 

[TheForexGuy]

Yes I can see the value in this way of thinking. As I've said you always see that 'early week' retracement. That's why Friday Close signals / Monday price action can generally be a pain in the ass.

 

[erebus]

The EUR-USD never worked out, I can't find any pair that did, and now with an UP week, it will be out of contention for next week

Which is how this method keeps you trading with the trend only, March will never be an UP month

So if first week of April is Down Week, opportunity may present itself during the second week

Otherwise, wait for complete change of trend

 

[hafizhanif84]

How easy is this?

This is a longer term method folks !!!View attachment 1395

hi erebus..mind if u share the indicator candlestick each tf that u have there at the low of chart?

im still active in that forum..but i dont know anyone who use this kind of idea have a good result or not..

 

[erebus]

Sure no problem, I stopped using it, seems to have extra text on top of the writing, I deleted Objects and saved new templates but still it appears

You can try it and see

 

[TheForexGuy]

I always thought of a weekly breakout strategy that lined up with the previous candle direction, and during london hours.

In your strategy Erebus, you suggest waiting for a monthly and weekly candle to line up in the same direction. Don't trade any monday breakouts, but take any downside, or upside breakout depending on the w1 & m1 candle direction?

Ill check out the indicator and see if I can clean it up.

 

[TheForexGuy]

Here is a cleaned up version. This is what I did...

• Removed unnecessary objects
• Set the default time frames to W1 & M1 only
• Changed the color theme to blue and red candles
• Changed default background color to LightGray

The code is very messy and has a lot of junk in it. I think someone has tapped into a Heiken Ashi candle indicator and injected code to mold it into this.

But it works.

Another Idea is to could make an alert function that waits for breakouts that meet the conditions

• No breakout alarms on Monday
• Bearish breakout alarm if price breaks below prev D1 Low if W1 AND M1 prev candles are both bearish
• Bullish breakout alarm if price breaks above prev D1 High if W1 AND M1 prev candles are both bullish.

 

[erebus]

Don't worry about alerts, got a Dashboard for that, O look, there is ADR also

On Steve Hopwood forum they have robot to trade this strategy

 

[erebus]

I always thought of a weekly breakout strategy that lined up with the previous candle direction, and during london hours.

In your strategy Erebus, you suggest waiting for a monthly and weekly candle to line up in the same direction. Don't trade any monday breakouts, but take any downside, or upside breakout depending on the w1 & m1 candle direction?

Ill check out the indicator and see if I can clean it up.

Sure no problem, I stopped using it, seems to have extra text on top of the writing, I deleted Objects and saved new templates but still it appears

You can try it and see

Yes, take a break on Daily at recommended 20 pips below or above, so it has to be good move

Myself, I reckon using the Monthly is too much, data will be from 5 to 8 or 9 weeks out; I think looking at the previous 5 weeks gives current situation of trend

Is last week's Close higher or lower than the Open of 5 weeks ago? Check on Weekly chart, watch for retracement on Daily.

But this week I'll be following Weekly, Daily and trade 4 H bars

Robot can do this on demo, I will choose best pairs and setups for live.

 

[TheForexGuy]

Myself, I reckon using the Monthly is too much

Agreed it might be a bit too much. The weekly candle is the important piece of data here.

I think the anatomy of the weekly candle should probably affect trading decisions here too. A weekly Indecision candle might need more condition for just taking breaks of the daily highs/lows. But a strong bodied weekly candle could suggest more aggresive approaches like the daily breaks.

If the weekly candle didn't look so healthy, then one might not take breakouts unless price breaks the previous weekly range also

 

[erebus]

Absolutely, that was in my mind, but you use those big words better than me!

Only have to look at the previous monthly candle of GBP-AUD, now that screened out trades for 3 weeks now, because it was up

And yet weekly / daily are giving good signals, 10 + 20 MA crossed over

 

[TheForexGuy]

Yeah the monthly candle is just too sluggish. Most of the move is probably over if you get a beefy MN1 candle.

The other question is where stops should be placed. I would be inclined to put them above the current day high/low, or if you want to be more aggressive use h4 swing high/lows for stop placements.

 

[TheForexGuy]

So we're waiting for a bullish breakout here.

In line with lasts weeks bullish candle, not taking the monthly candle into account because it's overkill and lags the system too much.

Interested to see how these breakouts play out.

 

[erebus]

Here are the 16 pairs I'm watching for Daily trades, alerts for GBP-JPY and GBP-USD


The columns are Month, Week direction; and then Mon Tue Wed Thu

with your chart, you do not have a pullback day, apart from the the fact Month & Week do not match

 

[TheForexGuy]

I am just going to exclude the monthly candle at this stage and just go with a weekly/daily combination to see how we go.

Monday wasn't a down day here, but since this is the first bullish weekly candle in a while - I think the market has plenty of room to correct upward. It's only play money anyway.

 

[exterior]

@erebus
I missed something on your explanation.

1. Is the breakout only traded, if the previous daily candle is in the opposit direction of the monthly and weekly candles?
Example:
Previous Month: bearish; Previous Week: bearish;
Monday:
- bullish --> trade breakout on Tuesday
- bearish --> don't trade breakout on Tuesday
?

2. is only a breakout of the monday candle going to be traded?
Example (assuming that only the breakout of an opposite daily candle is traded):
Previous Month: bearish; Previous Week: bearish;
Monday: bearish - no trade;
Tuesday: bearish - no trade;
Wednesday: bullish - trade breakout on Thursday;

 

[tjenarvi]

Have you ever backtested this for 10 years back?
How is the win probability?