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Clearly, if you have an initial SL of, say, 40p, which you convert to a TP of 70p on the very next trade, do you not see how doing that will prolong the life of the trade set? Not only that, but instead of losing 80p if that second trade hits SL, but you are now losing 110p due to the increased R:R ratio? What’s the next move, adding yet another 30 pips to the 3rd trade in that set, making the next TP 140p? In my opinion, these are not the actions of a skilled trader.
I think there is a misunderstanding (maybe due to the language barrier on my side). I am currently trading a set of max. 2 with a R:R 1:1.8 in eurusd for example. If the first trade closes in profit, great. If not( IE -30p) the R:R ratio stays the same for the second trade. If i lose again (-60p) i’m looking for a new set.
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First, I do not believe you actually traded those examples in real life. I think you are looking back at historical data and cherry picking your examples, looking for best case and worse case scenarios.
You are correct, i didn’t trade those examples but i ran into the second one (usdcad). The indicator “went silent” because it had to wait until Profit or StopLoss .
Second, your R:R ratios are off. In about half of those examples you gave, trading those sets my way with a strict 1:1 ratio I would have ended in profit many bars earlier than as you see in those pics. The one pic – the last one, that shows a -39p on the first trade of the set, and then re-opened on a massive downward spike – finally closes more like 75p down, not 39. Had that been one of mine, it would have closed out when that second trade of the set reached the 40p sell zone. If my breakout trade loses 40p, I don’t expect the second/third/fourth trade to give me more. I try my best to have the follow-up trades of a set to match the breakout trade, keeping my ratio as close as possible to 1:1.
You are keeping your ratio 1:1 and not let your winners run? This is a new piece of information for me. Although it makes sense for the second/third/fourth trade. I will keep it in mind, thanks!
Fourth, some of those examples show the spike on the later trades of a set, not on the breakout trade. In which case there is nothing you can do to avoid them, since the actual breakout trade of the set has already committed you, and you already have equity at risk. Not even the mod you asked Xux to make for you will correct this situation, because his mod only affects the breakout trade, not any that come after. The very most you can do in this particular situation, is to cut your losses once the spike hits if it makes you too anxious, and call that one trade set a loss and move on.
You are right on this one. There will always be loses, thats part of the game.
If it is your intention to qualify every single trade of a trade set as though it was the breakout trade, you are going to have a lifetime of disappointment!
That’s the tricky part. Currently i am working with MaxTrades per Set of 2. To trade the third and fourth after losing the first two trades requires a lot of training and experience in my opinion ( and i am not there yet).
All that matters is Price Action, and how we respond to it. Nothing else matters. Nothing. Anything else is just static noise in the distant background, as far as professional trading goes, and that includes how long a particular trade/trade set is active.
Thanks for the reminder.
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But now, YOU TELL ME, how that becomes a trade set that will now take “weeks or months”, as you said, to close, instead of just a few hours, or next day, as per the usual? Why the hyperbole?
Ok fair enough, the month part maybe a bit extreme, point taken. But there are trades like you can see in the attached screenshots where a trade may take up a week.The indicator will not show any other CZ’s during that time. Yes, they are rare events but they do happen and influence the CZ’s statistic.
I am not here to argue, Stairstep Breakouts are working and xux99 was kind enough to add this feature. So thanks again.
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I don’t understand this comment. Why do you think that the distances you are referring to would create open trades that would take weeks or months to complete? If anything, a quick burst of volatility immediately following breakout would lead to a quicker closing of a trade or a trade set, not a slower one. So again, I’m not understanding your comment. Also, those spikes you are highlighting in your pics are actually quite rare on time frames of M15 or higher. So if you don’t like seeing them, stay away from the lower time frames and then no indicator tweaks are necessary. And you will see far less spikes if you stay away from the exotics, too. So just stay with the 2 or 3 most common pairings… and use M15 or above… and those spikes will become almost non-existent on your charts.
Hello forexhard, it’s good to know you are still around. Let me take this opportunity to thank you for this great method, hats off!
I am using the SLMultiplier Option which means the distance between Stoploss-bottom-CZ-Area and Trade-Entry is used to calculate the QuickTakeProfit. For example if i am using a risk-reward Ratio of 1:2 with a large spike like you can see in the above screenshot, double distance would be my profit. Of course no one would enter this trade (i guess?), but with the new option i am able to filter these nonsense trades. Like you said those spike are rare but they still happen. So i get more refined statistics (xx CZ’s over 100 days) and more NetProfit ( i already tested it). Besides it’s only an option anyway. I hope this makes sense?
Did you test Stairstep Breakouts for stock market indices or do you trade forex only?
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I have added a MaxEntryDistance option and updated the first post. It defines the maximum distance of entry price from breakout level.
You are just awesome, thank you!!
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Thank you xux99 for this awesome indicator!
I am using the Setting: QuickTakeProfitType: SLMultiplier
It works great but in combination with the Setting MinBarsClosedOutside= 2, it creates situations like you can see in the attached screenshots. There is a large range between Trade Entry and CZ-Area so the trade will never complete or it takes weeks or months.
Would it be possible to add an option, to ignore these trade entries, for example: If MinBarsClosedOutside= 2 >20pips from the top/bottom of the CZ buffer zone = Ignore Trade Entry ?
Edit: Or even easier: MinBarsClosedOutside_Max. Pips = (PipVariable)
