3 in a box plus 2 ends
3-in-a-box screen shots
Here is a screen shot showing a few examples of the two trade setups. The white arrows show the 3-in-a-box trade setups and the orange arrows show the 2-ends trade setups:-
Very interesting setup. Thanks for sharing.
FerruFx
Very simple and very interesting!
Could this be used on higher timeframes as well?
Thanks for introducing!
What timeframe and currency pair is best to use this setup?
What timeframe and currency pair is best to use this setup?
There is no hard and fast rule governing timeframes or pairs for this method. All pairs are fair game ...
The CustomCandle indicator can draw any size candlestick given the appropriate value so it's simply question of adjusting the method to find values that are suitable.
I've monitored the method using the EURUSD pair with settings of 15-5-M1 as this has the smallest spread. However all pairs are worth looking at.
Very simple and very interesting!
Could this be used on higher timeframes as well?
Thanks for introducing!Bear in mind that the method has been conceived as a scalping strategy but there is absolutely no reason why it can not be tested and used on any other timeframe.
Back-testing pairs and other timeframes is an easy affair as the method relies on solely on price so other combinations of CustomCandle time and different pairs can be made offline and at the weekend. It also means that the results shown are accurate.
Back-testing pairs and other timeframes is an easy affair as the method relies on solely on price so other combinations of CustomCandle time and different pairs can be made offline and at the weekend. It also means that the results shown are accurate.
Thanks. A couple of questions on how you trade this system.
1. Do you take all trades indicated by both the 3 in a box and 2 end?
2. If you do, do you then wait until the aggregate trades are positive to exit or do take your losses as they come and move on to the next setup?
3. If you are using 3 in the box, would you exit at opposite 2 end?
At the moment I'm concentrating on taking just an initial trade of either type rather than adding to a position should another trade setup present itself in favour of any exisiting trade. If a trade setup appears contrary to an existing position then the trade could be taken or the exisiting position held - it's entirely up to the trader to decide whether or not the existing position can continue with any degree of success. Bear in mind that this method is attempting to signal the occurrence a high probability trade setup the result of which is entirely unknown.
With regard to your second question, hypothetically if I were to add to a position I would most likely pyramid into higher prices and at the same time reevaluate the stop loss level. Whilst not part of the setup just yet this is something I am looking into.
Does this help?
With regard to the above paragraph, the indicator that I'm looking at to reevaluate and set stop loss level is the RickD's i-HighLow.mq4. I have added this to the first post.
There were several trade setups today of both the 3-in-a-box and the 2-ends type which I've copied here to demonstrate the trades as they came. The white arrows point to the 3-in-a-box trade setup and the orange arrows the 2-ends trqade setup, along with their relevant direction:-
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Introduction
The idea behind the 3-in-a-box method is to catch high probability trade setups with the emphasis solely on price. The method uses one indicator, CustomCandle and a M1 chart. Given the resolution of the chart it's perhaps best suited for scalp trades.
Setting up the chart to trade from is simple and straightforward. The method requires an M1 chart and the CustomCandle.mq4 indicator. Place the indicator on the chart and set the 'TimeFrame' property to 15. Then place the same indicator on the chart and set it's 'TimeFrame' property to 5.
By using CustomCandle and creating an outline of a 15 minute candlestick and by adding outlines of 5 minute candlesticks it's possible to observe the price action over multiple timeframes at higher resolutions and that of the closing state of each timeframe's candlesticks.
The 3-in-a-box trade setup
Method 1
The trade setup is clear when all CustomCandle candlesticks indicate identical direction which is represented by a similar colour. A trade is then made in the same direction. Such a trade setup would be shown on the chart as four candlesticks: A 15 minute candlestick outline and three 5 minute candlestick outlines. This is shown as three 5 minute candlesticks which consecutively close at higher prices within a 15 minute period in the same direction; 3-in-a-box.
The 2 ends trade setup
This trade is shown as having a predominant number of candlesticks in one direction but more importantly the second and third 5 minute candlesticks must indicate the same direction as the 15 minute candlestick.
3-in-a-box + 2 ends template
The 3-in-a-box plus 2 ends template indicates long trades in green and short trades in red.
Exiting the trade
Should another trade setup present itself which indicates a change in direction then stop and reverse.
Stop loss
Site your stop loss at a point above or below the 15 minute candlestick depending on whether you are long or short. All said, it is a scalping tool so grab what you can.
As an alternative way of adjusting the stop loss, I am looking at the i-HighLow.mq4 indicator to offer possible stop loss settings. This indicator will plot the high and low of a timeframe set in the properties which I have currently set as 15-0. This indicator may offer other possibilities when it comes to deciding on whether to enter or exit a trade.
Addendum
In addition to both trade setups, I am looking at other ways of increasing the probability of a successful trade by use of the i-HighLow.mq4 indicator which at the moment is primarily being used to set stop loss levels. It's use involves monitoring breaks either above or below the levels it has drawn on the chart in order to gauge momentum and possible price level breaks. Should either a 3-in-a-box or 2-ends trade setups occur along with a break of either a high or a low as indicated by the i-HighLow indicator levels then this ought to signal a stronger move in the direction of the trade setup. It may also help prevent initiating trades when volatility levels have dropped and so avoid weak moves.
Latest uber cool additions:
- Template designed by fxbs in post #52
- Translated version of CC_Shift by fxbs in post #53
- 3 In A Box type EA in dznmrd's post #42 although this EA unfortunately does not follow the rules I've outlined above.
- Added mankurt's newer version of CustomCandle called CC_Shift
- Added Rick D's i-HighLow.mq4 indicator - with preset properties.
NB: A special thanks to:
mankurt for the CustomCandle indicators.
Rick D for the i_highLow.mq4 indicator
dznmrd & Ronald Raygun for the expert advisor
fxbs for the new template and translation