Developing a system #8 (Three line break fofo strategy)
Submitted by Edward Revy on November 5, 2008 - 11:51.
Submitted by dr.fawwaz
A simple but powerful strategy but needs improvement for exit and take profit, sometimes it will have losses(very few) but all in all u will always be in profit, I'll describe it here and lets all improve it and beat the brokers together, here it is:
It's called the three line break fofo strategy (i made it my self).
Open a 15 min chart eur/jpy (u can use other currencies also but i like this currency) then let your chart type be THREE LINES BREAK INSTEAD OF CANDLESTICKS, that's all what u need, no indicators at all just the plain chart.
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Dachel, when you say to enter and reenter when bars switch back and forth etc , do we keep all positions until their SL is hit or do we cancel an old order in favor of a new one ?
A screenshot would be extremely helpful. Not everybody has a Fxsol account. An accuracy of 90% just because of a chart repainted in a special way? Highly unlikely. Btw what does fofo mean?
An accuracy of 90% just because of a chart repainted in a special way? Highly unlikely. Btw what does fofo mean?
yes , fofo from fawwaz
*Dachel, when you say to enter and reenter when bars switch back and forth etc , do we keep all positions until their SL is hit or do we cancel an old order in favor of a new one ?*
We should keep our opened positions
Three line break chart is one of japanese techniques. As with others charts it's not the holy grail. If You interested should read Steve Nison's books. Below is quote from his "Beyond Candlesticks
"A Japanese trader described the three-line break chart as a "more subtle
form of point and figure charts where reversals are decided by the market
and not by arbitrary rules. That means we can gear it to the strength and
dynamism of the market.
As shown in Exhibit 6.1,, the three-line break chart looks like a series
of white and black blocks of varying heights. A new block is in a separate
column. Each of these blocks is called a line. Using the closing price, a
new white line is added if the previous high is exceeded and a new black
line is drawn if the market reaches a new low for the move. If there is
neither a new high nor a low, nothing is drawn.
If a rally (sell-off) is powerful enough to form three consecutive white
lines (three black lines), then the low of the last three white lines (the
high of the last three black lines) has to be exceeded before the opposite
color line is drawn (this procedure is explained in detail later in this
section). The term "three-line break" comes from the fact that the market
has to "break" above (or below) the prior three lines before a new opposite
color line is drawn. Here again, as discussed in my first book, we
see the importance of the number "three" in Japanese technicals.
A major advantage of the three-line break chart is that there is no
arbitrary fixed reversal amount. It is the market's action that will give the
indication of a reversal."
Regards,
Andrew
Is it possible taking Heikin-Ashi and when there three candles in follow are black or white I enter?
Probably. Then if to use Heikin-ashi, while waiting for 3 candles, try setting a limit order somewhere 50% away from the currently traded price - this way, if your order gets filled, your risk/reward ration should be outstanding.
..also while waiting, you can decide to enter on a candle which closed against a trend suggested by heikin-ashi candles, again, this way you'll be lowering your risks.
Has anyone tested this over a certain period of time? What time-frame seems to be the best? What TP and SL?
Thanks
Claude
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