Traders Corner Blog

Back



Summary of 30 minute breakout system - by Gert Beytel

Posted by: Garth Mackenzie Posted on: 2015-03-30


This contribution has been made by Gert Beytel who is a subscriber to TradersCorner.co.za.

 

A summary of the 30 min break out rules:

 

  • Use 30 min chart.
  • Do not trade at all during 1st 30 min of the day.
  • Mark the high and low of the 1st candle for the day (I prefer to use 08h30 candle i.s.o. 09h00).
    But 09h00 is the rule!
  • The first candle thereafter to close below the low which you marked is a trigger to short.
  • First candle to close above high that you marked is a trigger to go long.
  • Enter immediately – as soon as the close above or below occurs.
  • 1st target is the range of 1st candle.
  • If you are conservative, you can use 50% of that range as your first target. Full range will
    then be regarded as 2nd target
  • You open 3 positions.
  • Your initial stop is a close above or below the low or high of 1st candle.
  • When 1st target is reached you close one position and place a stop on one
    position at break-even (entry level), and then trail a 75% stop on the other position.

 

It is more prudent to trade this system every day, and make sure to keep your trades constant,
i.e., don’t open 3 R 4 contracts one day and 3 R 10 contracts the next, because you might incur
a loss when you take the bigger exposure. Be consistent!

 

Trading it (some practical aspects):

 

At the Face 2 Face session, it was suggested that the method is too screen
intensive and requires a lot of time to be spent monitoring the price and open trades.

 

You can do the following to minimize screen time;

 

  • You only need to look at the charts at about 09h20 (if you use 08h30 candle) or
    09h50 (if you use 09h00 candle);
  • When analysing charts at 09h20 or 09h50, mark high and low of the first candle
    and determine range – eg. 200 pips.
  • If a close then occurs at 09h30 or at 10h00 (depending on which candle you elect to use),
    you can immediately open your 3 positions;

 

Note – open 3 individual positions / trades, unless your trading platform allows you to apply
stops and limits on portions of one trade.

 

  • When opening first position, place your limit target already when opening it (eg. 100 or 200 pips).
    That means when target is reached, whatever it may be, that position will be closed by system.
  • I receive a sms and a “push notification” on my phone when this occurs.
  • As soon as I am notified that my first position is closed at profit limit, I access the platform
    and place a trail stop on one position and a break-even stop on the other. I can then no longer
    incur a capital loss and I only need to look at the screen again at 17h00 to close remaining
    positions if they have not been stopped out by system. If remaining two positions are stopped
    out, you don’t need to look at the platform again until the next day.

 

To enable you to enter positions later in the day (because its not always the very next candle,
after the first one, to give a trigger to open trades), and / or to stop yourself out (because you
cannot use an automated stop before targets are reached), I do the following
:

 

  • After marking high and low of the first candle, and / or if trades are not opened at 09h30 or 10h00,
    and / or to stop open positions, I place system alerts at the high and low levels that I marked.
  • If an alert is received that high or low has been breached, I know that price is trading at that level,
    and I can then access the system at the half hour (10h25, 10h55, 11h25…..etc, to see if a close occurs
    above or below that level. If no close occurs (i.e., price spikes up or down, but retraced again), I place
    alerts again.
  • You then only need to look at the charts if an alert is received, and you only need to do this at
    the half hour. This might be once or twice a day.
  • When looking at the charts as stated (after alerts are received), you can stop yourself out
    (close all open positions) i.t.o. rule, or open trades as above, and follow steps outlined.

 

I work from home and I do not mind looking at the charts every 30 min, but if you don’t want to do that,
use the system price alerts as described above (it’s a great tool). This eliminates screen time.

 

You will only look at the screen at the following times: 


  • When marking high and low of 1st candle and / or placing first alerts, and / or opening
    trades at 09h30 or 10h00
  • After receiving a notification that first position is closed, so that you can place automated
    stops on remaining positions.
  • When receiving price alerts, so you can enter trades at the half hour or re-activate triggered alerts.

 

SEE EXAMPLE BELOW OF TODAY’S TRADE – 30/3/2015:

 




Posts on this thread

Click on the 'Post' button to make a comment, or use the Arrow next to a Post to reply to that specific post.


Reply to this post 1 Gert Remember also that a trigger to stop existing positions, will necessarily be a trigger for a trade in the opposite direction. Use your discretion whether you want to act thereupon. I do not execute a trade if a trigger occurs after 15h00. 

Reply to this post 2 Tinus Thanks for the system Gert, may I ask if you have backtested this and your results? 

Reply to this post 3 ChrisS March was quite a good month for Jake Bernstein's 30 MBO system. I’ve been keeping track of the theoretical results that I would have achieved during March if I had followed Jake Bernstein’s methodology religiously as set out in his book: "All about day trading" and traded it every day. (In practice I wasn't able to trade it every day because of life's commitments and, as luck would have it, I actually missed out on the best trading days. Cést la vie!). My interpretation of the methodology is to take a profit as soon as profit target 1 is met. Similarly, I close a trade as soon as the stop level is breached. My first profit target is 50% of the range of the 09:00 candle. On some days two trades were entered into (if the first trade was closed and then a trigger in the opposite direction occurred). During March, 25 trades were evaluated of which 80% were profitable and 20% were not. If all 3 contracts were established for each trade, the accumulated profits generated would have been R55 400 and total losses incurred would have been R26 010, i.e. a net profit of R29 390. The largest profit on any one trade was R5640 (2 March) and the largest loss was R6 930 (17 March). If one considers the 3 contracts individually, the first contract generated profits of R15 140 and losses of R8 670, ie a net profit of R6 470. The second contract generated total profits of R21 290 and total losses were also R8 670. The third contract generated a result on 16 out of the 25 trades. For the remaining 9 trades it was closed at break-even. Of the 16 trades for which it generated a result, it was profitable 69% of the time. Total profits generated were R19 080 and total losses were, again, R8 670. (The loss on all 3 contracts is always the same because they’re always closed at the same time when the stop is triggered).  

Reply to this post 4 Gert Tinus - I have on a few occassions posted my results on the daily forum, but I will post it here every end of week, for the coming month. It will give you an idea then of whether I am trading it successfully or not. 

Reply to this post 5 Tinus Great thanks Gert. 

Reply to this post 6 Gert 30 min b/o trades - Week 1 April Trades done with 3 mini (R 10) contracts. Mon 30/3 Long at 09h30 (range candle = 08h30). Last position closed at day end. Total profit for day R 5260.00 Tues - 31/3 Long at 09h30 (range candle = 08h30). Trigger to stop at 12h30. Loss -R 5180.00 Short trade opened at 12h30. Last position closed at day end. Profit R 7030.00 Total profit for day R 1850.00 Note – had 1 extra contract during short trade due to fat finger! This added R 1000.00 to profit. Wed 1/4 Long at 09h30 (range candle = 08h30). Last position stopped at break-even at 14h45. No trigger occurred to go short. Total profit for day R 2290.00 Thurs 2/4 Long at 09h30 (range candle is 08h30). Trigger to stop at 15h30. Loss - 6120.00 Did not take trigger to go short at 15h30 – too late in trading day and price was at 50ma support. Biggest daily loss was -R 6120.00 Biggest daily profit was R 7030.00 Total profit for this week (4 days) was R 3 280.00 Method yielded 3 winning trades vs 2 losing trades. 

Reply to this post 7 Gert 30 min b/o trades - Week 2 April Trades done with 3 mini (R 10) contracts. Tues 7/4 Short at 10h00 (range candle = 08h30). Last position closed at day end. Total profit for day R 1930.00. No trigger to go long. Wed – 8/4 Long at 11h30 (range candle = 08h30). Last position closed at day end. Total profit for day R 2600.00 Thurs 9/4 Short at 09h30 (range candle = 08h30). Positions stopped at 12h00. Did not do a long trade at 12h00. Total loss for day - R 5620.00 Frid 10/4 Long at 10h00 (range candle is 08h30 / 09h00). All positions closed at day end (17h17). Total profit for day R 500.00. This includes the dividend adjustment at 16h50. Biggest daily loss was -R 5620.00 Biggest daily profit was R 2600.00 Total loss for this week (4 days) was - R 590.00 Method yielded 2 winning trades and 2 losing trades (10/4 was losing trade, but div adjustment made up for the loss). 

Reply to this post 8 gert 30 min b/o trades – April – Week 3 Trades done with 3 mini (R 10) contracts. Mon 13/4 Long at 09h30 (range candle = 08h30). Last position closed at day end. Total profit for day R 3020. No trigger to go short. Tues – 14/4 Long at 09h30 (range candle = 08h30). Positions stopped at 12h00. Trigger to go short occurred at 12h00, but I did not trade it as I was not at my screen. Total loss (long position) for day - R 6850.00 If one took the reversing trade i.t.o. rule – it would have yielded approximately R 3000.00 profit. Wed 15/4 Long at 10h00 (range candle = 08h30 or 09h00 Last position closed at day end. Total profit for day R 3040. No trigger to go short. Thurs 16/4 Trigger to go long at 10h00 (range candle = 08h30) or long at 10h30 (range candle 09h00) , I did not take either trades as I felt uncomfortable with market at record highs. Trade would have yielded approximately R 4000.00 profit. No trigger to go short. Frid 17/4 Long at 09h30 (range candle is 08h30). Last positions closed at 20h12. Total profit for day R 9030. This includes the dividend adjustment at 16h50 of -96 pips. Biggest daily loss was -R 6850.00 Biggest daily profit was R 9030.00 (includes dividend of R -960) Total profit for this week was R 8240.00 Profit could have been R 15 240.00 (if one followed the rule and traded the reversing short on Tues and the long on Thursday) Method yielded 5 winning trades and 1 losing trade this week. 

Reply to this post 9 Brian Gert you will find that your results improve dramatically if you trade your 30min system in the direction of the trend in the higher time frame & be cautious of opening trades when the higher time frame momentum is o/b or o/s. Incidentally this system can be used on daily & 60min time frames or weekly/daily time frames as long as you trade in the direction of the higher time frame trend 

Reply to this post 10 ChrisS Brian, your comment makes perfect sense and are in line with intuition. However, when testing your suggestion against my record of the 30 MBO system over the last couple of months (9h00 candle, the following emerged: Losses were incurerd on 6 occasions when trading in the direction of the trend and on 4 occasions when trading in the opposite direction to the trend. Winning trades resulted on 7 occasions when trading in the direction of the trend and on 11 occasions when trading in the opposite direction to the trend. 

Reply to this post 11 gert Thanks Brian and ChrisS. This week (1st week of May) has yielded very good results. I combined the 30min b/o with some macswing trades during the day. Have had an excellent week so far. I must still update the trades for last 2 weeks of April. Have not had time to do so yet. 

Reply to this post 12 rod 8 gert - Your results for month of may?  

Reply to this post 13 ChrisS The following results were derived in June 2015 using the 30 MBO methodology: Triggers to buy and sell were based on closing prices of candles on the 30 minute chart. All positions closed at 17h00 if not stopped out earlier. For the second contract, a trailing stop employed using 75% of the range of either the 8h30 candle or the 9h00 candle. All prices were based on the actual screen prices on the 30 minute chart, i.e. the IG trading margin was ignored. Using the 8h30 candle, during June, 26 trades were evaluated of which 73% were profitable and 27% were not. If all 3 contracts were established for each trade, the accumulated profits generated would have been 5 669 pips and total losses incurred would have been 4137 pips, i.e. a net profit of 1 532 pips for the month. The largest profit on any one trade was 800 pips (10 June) and the largest loss was 1 116 pips (15 June). If one considers the 3 contracts individually, the first contract generated profits of 2380 pips and losses of 1 379 pips, ie a net profit of 1 001 pips. The second contract generated total profits of 1 921 pips and total losses of 1 379 pips. The third contract generated a result on 14 out of the 26 trades. For the remaining 12 trades it was closed at break-even. Of the 14 trades for which it generated a result, it was profitable 50% of the time. Total profits generated were 1 368 pips and total losses were 1 379 pips. The results obtained using the 9h00 were disappointing and all 3 contracts produced a net loss for the month. 25 trades were evaluated of which 52% were profitable and 48% were not. If all 3 contracts were established for each trade, the accumulated profits generated would have been 5 245 pips and total losses incurred would have been 7 371 pips, i.e. a net loss of 2 126 pips for the month. The largest profit on any one trade was 864 pips (2 June, opposite trigger) and the largest loss was 1 173 pips (30 June). Again, if one considers the 3 contracts individually, the first contract generated profits of 1 880 pips and losses of 2 457 pips, ie a net loss of 577 pips. The second contract generated total profits of 1 605 pips and total losses of 2 457 pips. The third contract generated a result on 20 out of the 25 trades. For the remaining 5 trades it was closed at break-even. Of the 20 trades for which it generated a result, it was profitable only 40% of the time. Total profits generated were 1 760 pips and total losses were 2457 pips.  

Reply to this post 14 Gert ChrisS - thanks for your feedback stats on the 30 min b/o system. You have put in a lot of effort. I gave up towards the end of April, because it became very time consuming to keep separate and detailed stats on the method, especially as the end of April proved a very busy time for me outside the trading. I found myself keeping trading stats, and trying to keep records to post on the blog - and where the method gave more than one trigger on some days, it became rather problematic. Either way - have you traded it, and what was the end result? Did you make some profit or not? 

Reply to this post 15 ChrisS Gert, I don't trade it religiously because to do so means staying glued to the screen for most of the day. I also don't have much stomach for holding on to a losing trade until it gets stopped out at the opposite trigger as that can lead to some horrible losses! Instead I use the triggers and trade them if they move in line with my gut feel for the market. And, once I've entered a trade, I usually set a much tighter stop than the opposite trigger if the 8:30 or 9:00 candle is quite a long one! I've made small profits only but have also avoided the large losses. But, I find the method a useful tool for helping to determine market direction.  




Add a comment:


Your name 
Your comment
Please verify