The Flow plus ALR

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Dewey McG
Trader
Posts: 435
Joined: Sat Nov 26, 2011 4:20 pm
Location: Tampa FL

The Flow plus ALR

Post by Dewey McG »

I have been working on the ALR concept for a while but it has been slower than I would have liked with a hectic schedule. I felt this would be best with a good breakout strategy but finding one I liked hasn’t been easy. Before asking one of our illustrious programmers to code something I wanted to test the strategy and be fairly confident it was a winner first, especially since the ALR part of the strategy might be time consuming.

I have been testing this one since the beginning of the month and it has been working pretty well so far. Here is the myfxbook link: http://www.myfxbook.com/members/deweymc ... lr/1204820

Originally I was going to wait at least a month but I decided to go ahead and share now so others can test it and offer any input (as long as they don’t go off on wild tangents) before we ask for an EA. I think you will find this strategy to be simple, effective and perfect for those who work crazy hours and cannot be in front of their computer all day. It is based solely on price action and on the daily chart.

We don’t need any indicators but since I am lazy I use the MTF MA to draw the monthly open and the NEW Market Open simply because I like having that information at my fingertips. However you could do this with a naked chart.

Here are the rules:

1. Open a Daily chart and use the template and indictors below. We only look at potential BUY trades above the monthly open or SELL trades below the monthly open

2. We are trading breakouts of the previous bar. For buys, we set a buy stop for a breakout above the high of the previous bar (I add a buffer of 2 pips). For sells we set a sell stop for a breakout below the low of the previous bar (plus an optional buffer). If the new bar does not achieve the breakout we cancel the pending order and set a new one based on the high (or low) of the new bar

3. Once the trade is opened, if the bar closes with at least 5 pips of profit we close the trade and set a new pending order. If not the trade stays open. Depending on the pair, I set a TP of either 120 or 150 PIPS so if that TP is hit the trade will close for a nice profit and not wait until the end of the day.

4. No Stop Loss. If the trade goes against me by either 40 or 50 pips, depending on the pair, then it goes into ALR Mode

5. I use the ALR @ Trade Manager which Spider coded and is available here: http://www.stevehopwoodforex.com/phpBB3 ... 792#p97774 (if you want a full discussion of ALR please go here: http://www.stevehopwoodforex.com/phpBB3 ... 682#p94504 There are commercial products out there for over $2000 that are not as good. This one works better and at a far lower risk, plus it is compatible for US based brokers).

6. IMPORTANT: Either use a script like the one found here: http://www.stevehopwoodforex.com/phpBB3 ... 20#p114281 to generate a magic number which you then need to input into the EA properties under magic number, or set magic number in the trade manager to 0. However if you set to 0 you cannot have other open trades on that pair.

Look at the examples this month from the EURUSD. There were three trades that the bars closed in a nice profit after the breakout was taken (note—we don’t know from the chart whether the trades went against us first or not but this is to illustrate how the strategy works). There is a 4th trade that might have opened depending on the size of your buffer which definitely would have triggered the ALR. It was a nice strong move which would have closed the basket in a small profit after being triggered.

Now look at the EURAUD trades which were taken live. I picked this one because there were a lot of trades this month so far with one open still. You can see how the first trade was a nice easy 120 pips. The next trade went against me so ALR was triggered. On the 4th leg of ALR the basket was concluded for a small profit.

Don’t worry f your broker’s Daily bar closes at a different time. Mine closes at 5 PM EST which is 10 PM in London or GMT -2. I know many brokers use midnight London or GMT = 0. The Asian session usually doesn’t have that much activity where it will make much difference.

OK, now which pairs and what settings for the ALR. Ideally, we want to trade pairs with more volatility. Start by looking here: http://www.myfxbook.com/forex-market/volatility Then click the Daily tab twice so they are ranked by highest volatility. I do the same with weekly and then monthly. I eliminate any pairs with CHF and any exotics. GOLD and SP500 are also good ones if you have those on your broker but you will have to play with the settings. I would do this each Sunday before the week starts to add or remove pairs. For the most volatile pairs I use a TP of 150 pips and set my ALR to trigger at 50 pips. The others I will set for 120/40 or even 90/30 if the volatility is low.

If you look at the myfxbook link you might notice I screwed up at the beginning of the month as I forgot to change the magic number to 0 on the EA so the ALR did not trigger. I just took the losses. It is early yet but I think this shows real promise. Pull up any chart for any month and I think you will see this would have made money.

edit June 7, 2015. The EA version is working just fine so am discontinuing the manual test. Please follow the EA myfxbook link to follow a forward test. Information on the EA is here: http://www.stevehopwoodforex.com/phpBB3 ... 55#p121377
make sure you understand the strategy first
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SteveHopwood
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The Flow plus ALR

Post by SteveHopwood »

Beautifully constructed post 1 Dewey. :clap:

:xm:
Read the effing manual, ok?

Afterprime is the official SHF broker. Read about them at https://www.stevehopwoodforex.com/phpBB3/viewtopic.php?p=175790#p175790.

I still suffer from OCCD. Good thing, really.

Anyone here feeling generous? My paypal account is always in the market for a tiny donation. [email protected] is the account.

To see The Weekly Roundup of stuff you guys might have missed Click here

My special thanks to Thomas (tomele) for all the incredible work he does here.
Dewey McG
Trader
Posts: 435
Joined: Sat Nov 26, 2011 4:20 pm
Location: Tampa FL

The Flow plus ALR

Post by Dewey McG »

SteveHopwood » Sat Apr 11, 2015 12:10 pm wrote:Beautifully constructed post 1 Dewey. :clap:

:xm:
Thanks!

I figured you might like this part, "Before asking one of our illustrious programmers to code something I wanted to test the strategy and be fairly confident it was a winner first"
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SteveHopwood
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Posts: 9754
Joined: Tue Nov 15, 2011 8:43 am
Location: Misterton - an insignificant village in England. Very pleasant to live in.

The Flow plus ALR

Post by SteveHopwood »

Dewey McG » Sat Apr 11, 2015 4:13 pm wrote:
Thanks!

I figured you might like this part, "Before asking one of our illustrious programmers to code something I wanted to test the strategy and be fairly confident it was a winner first"
:clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap:

:xm:
Read the effing manual, ok?

Afterprime is the official SHF broker. Read about them at https://www.stevehopwoodforex.com/phpBB3/viewtopic.php?p=175790#p175790.

I still suffer from OCCD. Good thing, really.

Anyone here feeling generous? My paypal account is always in the market for a tiny donation. [email protected] is the account.

To see The Weekly Roundup of stuff you guys might have missed Click here

My special thanks to Thomas (tomele) for all the incredible work he does here.
coolsnake
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Joined: Mon Feb 13, 2012 12:40 am

The Flow plus ALR

Post by coolsnake »

Nice. Thanks.
Dewey McG
Trader
Posts: 435
Joined: Sat Nov 26, 2011 4:20 pm
Location: Tampa FL

The Flow plus ALR

Post by Dewey McG »

I thought I would discuss this week so far. What we have going on is several ALR Baskets open. If all goes as planned each "basket" will close for a small profit. For purposes of ALR trades by basket I mean ALR trades on the same pair. if you look at the PIC from the myfxbook link (you can sort history by symbols) you can see how this worked for the EURCAD basket. It took 8 turns (I set max to 15) to work.

When the market opened at the beginning of the week it was Sunday night my time (EST). Normally that is not the most recommended time to trade but since this is a demo and I am testing, I decided to set the pending orders and watch. Going forward I will wait. Even though I expect each basket will probably close for a small profit, by tying the pair up I can't take new trades so it is best to wait for the Monday candle and start trading the breakouts from that point.

This week is actually a good test of the ALR and this system. There will be some weeks where this makes a lot and other weeks with choppy markets where ALR kicks in like this one. If it works as expected, ALR will keep us from losing money like we would with other systems.
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Dewey McG
Trader
Posts: 435
Joined: Sat Nov 26, 2011 4:20 pm
Location: Tampa FL

The Flow plus ALR

Post by Dewey McG »

Here is a tease of something I am working on to add to this. Since we are trading daily charts we can look at what the big boys are doing to know when the wind is at our backs. One of the tools for this is the COT report which shows us what the asset managers, banks, big speculators, leveraged funds etc. are doing.

Now this isn't perfect since the numbers are always a little behind, but also remember these guys don't make complete reversals on a dime. It does help to get an idea of sentiment for longer term trades. Here is a weekly chart Showing the EURUSD and what the big guys have been doing. You will notice how the black line (EURUSD line chart) tends to follow the red line (Big guys).
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Dewey McG
Trader
Posts: 435
Joined: Sat Nov 26, 2011 4:20 pm
Location: Tampa FL

The Flow plus ALR

Post by Dewey McG »

Two more baskets closed for a small profit--the EURUSD and AUDJPY
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hooshoo
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Joined: Thu Dec 19, 2013 9:12 pm

The Flow plus ALR

Post by hooshoo »

thanks for the great effort dewey .... i am following
may i ask why u didn,t open a trade on the gbpusd today ..i guess its on the volatile list ...why we didn,t trigger a buy today ? ....
Dewey McG
Trader
Posts: 435
Joined: Sat Nov 26, 2011 4:20 pm
Location: Tampa FL

The Flow plus ALR

Post by Dewey McG »

hooshoo » Thu Apr 16, 2015 5:46 am wrote:thanks for the great effort dewey .... i am following
may i ask why u didn,t open a trade on the gbpusd today ..i guess its on the volatile list ...why we didn,t trigger a buy today ? ....
Good question. For some reason when I went through each chart I somehow missed the GU and didn't place a pending order on that one
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