stevehopwoodforex.com • European Breakout Grid Trap Strategy

Author:

ironrick [ Sat Dec 03, 2011 12:44 am ]

Post subject:

Re: European Breakout Grid Trap Strategy

Hello Dietmar, et al.,

How long have you been using this strategy? Do you have any record of how it has performed, say over a full year?

I am super interested in this method -- I hope the guys figure out a way to program a bot for it (and that will be able to make use of this method for us in the USA.)

I am also very interested in seeing if this works (or works even better) on more pairs.

Question and thoughts to George and Gary and the other coders:

Is there a way to have a single EA control 2 different accounts to get around the US hedging rules? Alternatively, is there a way to have 2 EA's "talk" to each other from 2 different accounts so that each account would know at which long or short trap level the other was at and could open the appropriate amount of orders? Seems like there are trade copiers out there that can control another account... Seems like it could work in principle.

Also, in order to keep losses from spiraling out of control on a particular day,
1) since this method seems to be profitable MOST days,
2) we are then concerned with limiting losses on the REALLY BAD days
3) What if you could put an overall pip loss limit PER DAY. An aggressive or conservative amount could be used (and testing could get us to a good, reasonable number.)
4) This could affect overall profitability of the system because it could stop you out of some trades that would eventually turn profitable. BUT, this also means you live on long enough to make it to the next "high probability day" to trade again.

Another thought. The Bot(s) could be limited in the NUMBER OF TRADES it is allowed to take per day. An EA that could be built to use this system could be used in backtester to help count how MANY trades are taken per day 1) on average and 2) median/ percentile. The 2 measurements are important so that you could get an overall average but also a potential statistical distribution that could show, for example, that one could hit 85% of all trades if limited to say 20 trades per day. (Stated another way, a day that requires over 20 trades has a greater chance of ending in the negative.)

Hope these are some helpful ideas. Let's keep the fire burning here!

Rick

Author:	forextrader-radioman [ Thu Dec 01, 2011 9:00 pm ]
Post subject:	EURUSD 1st of December
... and here the EURUSD breakout trap from today, 1st of December, 07:00 GMT , the Frankfurt opening, one hour before London opening. Calculation: Long1 = (3 x 45) = 135 Pips Long2 = (3 x 30) = 90 Pips Long3 = (3 x 15) = 45 Pips Short1 = (2 x -75 = -150 Pips Short2 = (2 x -90) = -180 Pips Spread = (13 x 2) = -26 Pips Result: 86 Pips loss

Author:	forextrader-radioman [ Fri Dec 02, 2011 6:03 pm ]
Post subject:	EURUSD 2nd of December
Hello traders, here is the EURUSD breakout trap from today, 2nd of December, 07:00 GMT , the Frankfurt opening, one hour before London opening. Calculation: Long1 = 45 Pips Long2 = 30 Pips Long3 = 15 Pips Spread = (3 x 2) = -6 Pips Result: 84 Pips

Author:	forextrader-radioman [ Fri Dec 02, 2011 6:09 pm ]
Post subject:	GBPUSD 2nd of December
... and the GBPUSD breakout trap from today, 2nd of December, 08:00 GMT, the London opening. Calculation: Long1 = (2 x -75) = -150 Pips Long2 = (2 x -90) = -180 Pips Short1 = (3 x 45) = 135 Pips Short2 = (3 x 30) = 90 Pips Short3 = (3 x 15) = 45 Pips Spread = (13 x 3) = -39 Pips Result: 99 Pips loss

Author:	forextrader-radioman [ Fri Dec 02, 2011 6:15 pm ]
Post subject:	overview
For december we are now down for a total of 20 Pips ...

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Author:	garyfritz [ Sat Dec 03, 2011 1:14 am ]
Post subject:	Re: European Breakout Grid Trap Strategy
Rick, you could probably have two different EAs on two accounts -- one long, one short. That way you'd never run into hedging issues. But the losses in one or the other might get out of hand... I agree the number of trades might be a good place to start limiting it. If the market is slopping back and forth, maybe it's better to just give up for that day instead of digging in deeper and deeper. Of course, as soon as you do that, it'll take off ...

Author:	Haggadah [ Sat Dec 03, 2011 12:51 pm ]
Post subject:	Re: European Breakout Grid Trap Strategy
Dietmar, Here I am, at last I found you. Thank you for the direction you sent me from another forum. I am followng your thread. Do you have any script for this strategy posted somewhere.?Sorry, I am still learning how to navigate around. Thank you again and to Steve as well for creating a new forum to deal with all his EA creation. Haggadah

Author:	garyfritz [ Sun Dec 04, 2011 3:59 am ]
Post subject:	Re: European Breakout Grid Trap Strategy
Hallo Dieter, I would like to see if I could restate your strategy's rules so it could be traded without hedging. I believe you start with orders at long1/2/3 and at short1/2/3. When you hit long1, you enter new sell orders at short1/2/3. (So now you have TWO orders at short1/2/3? That doesn't seem to match with your daily charts. I'm going to assume you don't enter the set of short orders when you hit long1 the first time, because you already have active orders at short1/2/3.) When you hit long2, you enter more new sell orders at short1/2/3. Now you have two sets of sell orders at short1/2/3. If the market now retraces, when you hit short1 you will open 2 short positions. You will also enter new buy orders at long1/2/3. Correct so far? Instead of opening new shorts when you hit short1, you could have the same effect by reducing your long position. You are long 2, one at long1 and one at long2. If you close those positions at short1, that will have the same effect as opening 2 new shorts. I haven't worked through all the cases yet, but it seems that we should be able to implement this by increasing and decreasing the long/short size. This will avoid the hedging. The risk is still not bounded because every time you move back and forth across the trap, you increase the size. I think. Does that sound OK so far?

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