HYBRID: trading system within a trading system

temporary set of rules while i compile data:

minimal length of breakout bar? arbitrary +10 pips. why? no good reason.
type of breakout bar? marubuzo or one-sided, short wick marubuzo.
B/E at retracement high/low or 50% ADR or major internal trendlines of higher TF
PT= 90% adr
SL = back of bar + spread.
breakout condition: LOB parameters.
entry time frame: 1min or 5mins.


will use the weekend to review more trading setups.

(of course, bpc 1min is still operational, as usual.)

not much going on, the trend are collapsing or have collapsed, looking at the dailies and weeklies and monthlies. clearly evidenced by the increased number of polygonal breakouts. Last week, i had only 3 trades. 1 15mins, 1 lob, 1 polygonal breakout.

what i am currently focusing on are: polygonal breakouts, if a bpc can be snatched. in certain cases, LOB.(it requires 3 days of unidirectional movement, not intersecting with any major trendlines or s/r levels. )

highly trend dependent trading techniques such as 15mins scalping and standard Hector 3sma will be scarce and far inbetween until good trend resumes.

so, yeah, i am mainly focusing on polygonal breakouts and LOBs.

(you have to know when to trade and when to walk away. it has been a tremendous trending market for the past couple of months....the market is probably digesting some of that. time to take it easy and enjoy life more; when trends resume, 15mins and hector sma WIll be there to use again. i dont beleive in forcing the market. i like clear, lean trend. in the meantime, i trade LOBS and daily polygonal breakouts)

did a sweep: there is an interim uptrend in eur/chf and gbp/chf due to polygonal breakout. until, of course, the next resistance. there is an interim downtrend in chf/jpy.

which means if price continues..i will be looking for LOB or 15mins scalp trade between the red lines.

Dddd,

I've stumbled upon your thread. With great interest, I am trying to piece together the Hectortrader system. So far, it looks strikingly similar to my approach over at the GPB/JPY thread. I'm running a 77% success rate and a 46% profit for the month of August.

Will you have a look at the thread give me your input?

Can anybody share the template/s for this strategy? Thanks!

nice thread dddd

dazz

dddd,

What you are onto is precisely what interests me in my own pursuits for the right strategy. One of the reasons I think so many traders have troubles is that they often end up with a hodgepodge of variant position sizing and reward/risk ratios across their entire spectrum of trades. This skews the underlying mathematics which determine profitability. I believe in constantly monitoring my performance to make sure I am maintaining positive expectancy. For me, positive expectancy must be designed INTO the trades before the trigger is ever pulled by deciding upfront what minimum R/R trades I will accept.

I definitely believe you are on the right track by looking for setups on higher TF and entries on lower TF, without question. Doing it this way literally structures your trades with significantly favorable R/R from the ground up. As you have rightly pointed out, the main thing to overcome with high R/R trades is the usual trade-off of low hit rates. However, like you, I do not believe that we must resign ourselves to "settle" for this trade-off without a fight. My bottom-line structural requirements for my trading are to use MAX 1% risk per trade and MIN 2:1 reward/risk. These are the main factors over which the trader has total control. The remaining issue is the win/loss rate, which is largely controlled by the market. Our only real controlling power over win/loss rate lies in our ability to cherry-pick only the highest probability setups and entries.

Have you run any of the numbers on what even a 50% win rate will produce with a 5:1 RR? Assuming a trade cost of 3% of the amount at risk, you would return 573.66% every 100 trades only winning 50 trades at 5:1 R/R using 1% risk per trade.

Here is a listing of the returns for the various R/R structures from 2:1 through 10:1, all using the same factors above of 1% risk per trade, 50% hit rate, 3% trade costs, over 100 trades:

2:1 = 58.05%
3:1 = 157.46%
4:1 = 317.43%
5:1 = 573.66%
6:1 = 982.24%
7:1 = 1630.93%
8:1 = 2656.35%
9:1 = 4270.45%
10:1 = 6800.65%

I won't bore you with additional numbers, but using anything above 2:1 R/R, even slight increases of your hit rate above 50% has a phenomenal effect on your profit margin. In my book, it is FAR better to design a trade strategy that is founded on solid R/R and proper position sizing than to simply leave those factors to chance.

thanks, pipskateer for the conversation.

At this state, my inclination is to wait for weekly/monthly breakout or confluence before planning for the millipede run. My best r/r are larger and larger time frames. In my humble opinion, those are the ones with the megapips(hundred upon hundreds or +1000 pips gain.). My own personal experience and doing a followup on mortician's compilation convinces me of that.

Of course, i prefer things to be aligned with fundamentals.

To limit multiple re-entries, which sometimes drop my win rate to 50% or sometimes, 30% on the 1 minute time frame.(the higher the time frame for entry, the greater the win rate, but lesser the r/r; unfortunately, that is life for you.). I am privately interested in further researching precision entries, which is a big change because i am a confirmation obsessed trader. One method i am currently looking at right now(alien frog sent it to me) is the survivors' approach. I am trying to blend it with this concept of momentum ratio i found on trend trading all pairs. See if i can apply it on the 1minute. With total preference for the marobozu candle.

i doubt one can do more than 1 positive millipede trades per month that wont result in B/E. At least, based on what i am seeing on my end.

Hey Big D,

Nice thread you have here,. Just stumbled upon it. I will give it a read.

Funny how I had just touched on what your speaking of in here.

Cheers

Bluesteele

thanks, man.



Your approach is as good as any. I like it. Spreading the lots/units allocation overtime is really the way to go. I too, cannot psychologically withstand letting a +1000 winners run back and lead to zero. I just cant. DanUk will hold everything...and i mean, everything, until the trend shows reversal signal on the daily(reversal signal for him is h-h turning to h-l or l-l turning to l-h). h-h= higher high/ l-l = lower low.

Mortician advocates looking for break of weekly or monthly levels....those are the ones prime for the +1000 pips runs....i stole ideas from him too. I did a subsequent follow up on the charts he posted to check him out...and some of those charts DID MADE those hundred and some did +1000 pips move. His short of USD/SGD last year in july at 1.3696 was epic. USD/SGD eventually went to max low of 1.2000. I stole ideas from him.

Nightmoves and Entropylad prefer a trend collapse to happen thereby precipitating massive move of hundreds of pips in the market over a couple of days. I stole ideas from them too.

Anyways, I will have to say that i agree with you on precision entry...the lack of precision entry is some of the weaknesses of the hector style...this made me read j16; this lack of precision also made me read WMD. I still uses hector style, but i have been introducing precision modifications. Especially after studying WMD(that thread is golden) and all of yunero's posts in detail. This weakness of hector style is why i searched out WMD thread in the first place. His level of precision entry is uncanny. The continuous need for perfecting high r/r is why i am fascinated with tony112 system(i have my reservations.),

Anywho, I stated the core of my technical trading principles here

Can anybody share the indicators & template/s for this very interesting strategy? Thanks!

The HYBRID approach layers one trading system inside another, aiming to balance diverse strategies for better risk management and profit potential. By combining systems—like trend following with scalping—it adapts to different market conditions. Has anyone tested this approach? Share your results and insights; let’s see if HYBRID truly offers an edge in trading!