Buy Zone on Hour Bars?

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greaterreturn
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Buy Zone on Hour Bars?

Postby greaterreturn » Wed Mar 05, 2008 12:39 pm

How can I trade Buy Zone on hour bars instead of daily bars?

Is there some way to filter our the bars based on trend?

At the moment, I'm backtesting on NT using a 4 pip4 above and below the open of hourly bars on USDJPY as my entry points and 8 pips target with a maximum one trade in either direction per bar.

But it wins less than 50%.

So again, any ideas how to selectively take long or shorts to increase the odds?

Or am I totally on the wrong track here?

Thanks!
Wayne

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Postby greaterreturn » Wed Mar 05, 2008 8:20 pm

Some improvements make it better. Add in a 3 bar tailing stop increased winnning odds. Since USDJPY has been in a down trend, I removed all longs. That had the odds up above 57%. Oh, one more thing, I only allow it to try a long a short per hour since previously, it had 2 chances to lose per hour but only one short at winning.

All this puts the odds over 57% but I need to replace with a trend filter. Also, the profitability is almost nill since it the average $ win and average $ loss are so close - commissions. I'm using NT, with MB Trading for my commission rate.

It seems like with some more tweaking it can work? Any other ideas?

Wayne

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Postby eudamonia » Thu Mar 06, 2008 1:34 am

You need to be selective about which hours to trade. Do some analysis about what hours are best to trade this vehicle. My bet is that the London and NY open is the best.

Edward
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Postby khalid » Thu Mar 06, 2008 2:45 am

Wayne,

Consider this: ONLY trade long if a short set up has (just) failed and ONLY trade short if a long set up has (just) failed.

TRO, Edward, and those with exprience,

I think Buy Zone is extremely good as it is. But how about renewals every half-hour. Then one could trade on the hour OR the half-hour, and avoid the high risk (and, yes, high opportunity) data release times; stock indices can be rather nasty on the hour at data times!

Thank you.

Khalid

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Postby eudamonia » Thu Mar 06, 2008 9:23 pm

Khalid,

You are welcome to trade the BuyZone anyway you like. There are probably many ways to succeed trading in this fashion.

What I've noticed is that the traders who trade this methodology successfully are adept at adapting the method to their own style of trading.

For example I really like to look at what type of macro market we are in. For the past two weeks we've seen a drastic decline in the US$. So my bias is to short the $ and to let those shorts run a bit. My style of trading will shift when the market sentiment shifts.

Edward
Eudaimonia (pron.: you-die-moan-e-a) (Greek: εὐδαιμονία) is a classical Greek word commonly translated as 'happiness'. The less subjective "human flourishing" is often preferred as a translation.

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Postby khalid » Fri Mar 07, 2008 8:00 am

Yes, as long as the mathematical logic of the BuyZone is NOT violated, any adaptation to fit one's personality should be profitable.

Khalid

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Postby RicG » Fri Mar 07, 2008 9:46 am

khalid wrote:Yes, as long as the mathematical logic of the BuyZone is NOT violated, any adaptation to fit one's personality should be profitable.

Khalid
Edward and khalid,

Are you saying that the Buy Zone should be filtered in some way when trading?

Thanks,
Ric

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Postby khalid » Fri Mar 07, 2008 11:11 am

Ric,

NO!

BuyZone needs no addition or alteration ? no drugs!!

However, before entering a trade one should:
? know oneself;
? be mindful of the market direction.

As TRO says, one must understand, and master, BuyZone to profit from it.

Khalid

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Postby khalid » Fri Mar 07, 2008 11:22 am

Adaptability simply means knowing oneself and be mindful of the market direction.

Khalid

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Postby greaterreturn » Fri Mar 07, 2008 6:56 pm

Thanks for all the help guys. I'm setting up to use the New York open. I see that it consistently has big volatility at that hour without the sideways action that stops out with losses. So Eudamonia, it seems you're right.

Also, after studying other threads on the Buy Zone and $TRILLION strategy it appears distretionary filtering to some degree IS necessary.

For example, Avery (TRO) says a good rule of thumb is to never trade against the direction of the one hour bar in the $TRILLION strategy. I assume the same goes for the Buy Zone, right?

One other post in the $TRILLION strategy, Avery explains why one trader's loss bounced to a stop loss before hitting the TP. He said it was because the trader didn't look at the previous weekly high and low. There was a weekly low just below the $TRILLION trigger point. So after entering, it bounced.

TRO said it's best to be aware of those big support/resistance and adjust your trades accordingly.

As soon as I get NeoTicker setup to use the New York open for daily bars on Forex, I'll try this out on Monday morning.

Sincerely,
Wayne

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