Best Thread Phil Newton's Range Break Out strategy

[GeorgeCotton]

Decided to give Phil's basic system a whirl this morning, Entries - Blue Dashed Line, Stops - Red Dashed Line and Targets (most already hit) - Green Dashed Line.

An uncannily lucky day.

 

[Black Swan]

Thanks for this George, nice one, 2 things; is it mainly 15 min TFs you trade off with Phil. and on that basis why is the cable trade off a 5min TF, is it a singular breakout strat?...TIA

 

[GeorgeCotton]

Firstly, I was just perusing T2W on my day off and found this rather popular thread, so i decided to give Phil's system a try this morning. Based on todays massive success (though not live I might add) I will certainly be giving it some serious consideration as a method when I do start trading full time. As for the TF, I saw Phil using the 15 min to plot the overnight range, so I did the same and like Phil, I'd zip down to the 5 min (not 89 tick as Phil suggested, as metatrader lacks this...among many other things) or maybe even 1 min TF to look at retraces as they formed, for example on the USDCHF a short term reversal formed to place pending orders off, which I could've only observed on a time frame lower than the 15 min. I must've just left the GU on 5 min as i was looking at the 14:00-14:45 breakout and retrace some hours ago. Hope that answers your question

 

[Elbie]

I've also started looking at this style on and off for a while, but I just wanted to clarify time frames. I have read Phils site and this thread but this bit doesn't seem to be clicking. Quite often what seems clear is less so when you actually try it. Most be going through a dense phase...

Anyway, ignoring overnight ranges, etc, have a look at yesterdays 15 mins -


Am I right in thinking the pullback was at 15395 and pullback to 15435, a few candles later and entry would have been past the pullback?

Or, on the 1 min chart, at 7 o'clock, the big move upwards hadn't happened but on the 15min chart it had.

Questions - do you use the time (i.e. 7 o/clock exactly) or 7 o'clock 15 min candle for the range. Are pullabacks only valid on the 15 mins? For example, on a lower tf - 1min or 5 mins, I could have had a pullback and trade on this TF but not on the higher.

I'm generally fine with everything else, but its the fine tuning of entries and managing trades which I'm a bit fuzzy about.

All help appreciated.

 

[Elbie]

Ok, no takers.

What I'll do instead for a few days is post up daily charts and see if my thoughts are anywhere near.

Todays chart -



Price has been in a range since yesterdays drop. As it's a range there is no 65% chance of continuing in a direction.

I'll stick to the 15 mins TF, and wait for breakout and pullback.

Not exactly early morning, but it breaks out of range, short side, 13:45 and then returns to range. The breakout went to 15402, and the pullback all the way back to 15473 (where its spiked at 3 times now). Ok, thats a large s/l (72 points!) but for the sake of learnig the entry levels, am I right in thinking I'd enter once price entered again at 15402, going short? At current, the 23.6% Fib appears as support at 15407, for the fifth time.

 

[goodtyneguy]

Would someone kindly clarify this paragraph from Phils first post please:

Once price has broken out of the range, to avoid getting into a false break out situation, to enter the trade I am looking for the first corrective bar or a "pullback". My current usual routine is to start looking for this pullback on the 89 tick chart. (if you dont have access to tick charts then a 2 or 3 minute chart will work just as well). After this IF the pullback develops but does not trigger the entry order I will then move up to the next time frame as price continues to develop a pullback on the 15 min chart then the 60 min charts.

1) In his video first of all he indicates that the entry order should be placed above the high of the breakout bar after the first corrective or pullback bar is seen. How could a pullback trigger the entry order in this case?

2) He then goes on to say another entry method is to use a fib retracement, is this the 38.2% measured from the low of the day to the high of the B.O. bar?

3) If 2) is correct what is the purpose of going down and then back up the time frames?

 

[caprica1]

Would someone kindly clarify this paragraph from Phils first post please:



1) In his video first of all he indicates that the entry order should be placed above the high of the breakout bar after the first corrective or pullback bar is seen. How could a pullback trigger the entry order in this case?

2) He then goes on to say another entry method is to use a fib retracement, is this the 38.2% measured from the low of the day to the high of the B.O. bar?

3) If 2) is correct what is the purpose of going down and then back up the time frames?

While not having watched the video you are talking about, I feel I am fairly up to speed with the way Phil trades, so I will attempt to answer your question :-

1) A pullback is a bar preceded and succeeded by lower bar highs for long trades and higher bar lows for short entries. So it's a 3 bar combination. The 3rd bar being the corrective bar.

Once the pull back has been identified, then your entry goes above the high of the pullback bar for longs, and below the low for a short trade. Your stop would go at the lowest/highest point of the retracement prior to the trade triggering.

2) You would use fibs to look for a new entry or a re-entry on a trade. In the image below, if you were looking for long trades, you would take the fibs from the low to the high. Wait for price to come back down to a fib level you are interested in, then drop down to your lowest time frame to look for a bias change entry.

3) The purpose of using different time frames is identify new trades, and then identify the entries depending on how aggressive you want to be. The more conservative you are, the higher the time frame I suppose.

Hopefully this answers your questions.

 

[goodtyneguy]

While not having watched the video you are talking about, I feel I am fairly up to speed with the way Phil trades, so I will attempt to answer your question :-

1) A pullback is a bar preceded and succeeded by lower bar highs for long trades and higher bar lows for short entries. So it's a 3 bar combination. The 3rd bar being the corrective bar.

Once the pull back has been identified, then your entry goes above the high of the pullback bar for longs, and below the low for a short trade. Your stop would go at the lowest/highest point of the retracement prior to the trade triggering.

2) You would use fibs to look for a new entry or a re-entry on a trade. In the image below, if you were looking for long trades, you would take the fibs from the low to the high. Wait for price to come back down to a fib level you are interested in, then drop down to your lowest time frame to look for a bias change entry.

3) The purpose of using different time frames is identify new trades, and then identify the entries depending on how aggressive you want to be. The more conservative you are, the higher the time frame I suppose.

Hopefully this answers your questions.

Thank you for the detailed reply and the nice explanatory charts. I am familiar and have used fib retracements and the technique of going down a time frame or two for timing. The term corrective or pull back bar threw me.

So would you say for aggressive traders he is advocating the entry point would be to use a fib retracement with possibly increasing the position size once the break of the high of the BO bar. For less aggressive to enter on the break of the high of the break out bar?

One other question please, does the break out bar have to close above the range to qualify as a break out?

Thanks again.

 

[caprica1]

Thank you for the detailed reply and the nice explanatory charts. I am familiar and have used fib retracements and the technique of going down a time frame or two for timing. The term corrective or pull back bar threw me.

So would you say for aggressive traders he is advocating the entry point would be to use a fib retracement with possibly increasing the position size once the break of the high of the BO bar. For less aggressive to enter on the break of the high of the break out bar?

One other question please, does the break out bar have to close above the range to qualify as a break out?

Thanks again.

Q. So would you say for aggressive traders he is advocating the entry point would be to use a fib retracement with possibly increasing the position size once the break of the high of the BO bar.

A. The way I have traded this with Phil and many others in his LTR and website in the past it to use your highest time frame to identify the direction bias using price action sequence, and any ranges. Identify the overnight trading range. Identify whether that range is in the top or bottom 3rd of previous days high/low range. Identify any valid breakout pull back or range reversal setups using your 2nd lowest time frame. Then drop down to your lowest time frame to position yourself on the move at the earliest possible opportunity. Again using the price action sequence to identify any bias changes.

Again I know this sounds like a bit of a cop out of an explanation, but you can use fibs or the price action sequence or any other method how you see fit. If you wanted to strictly trade how Phil does, then the fibs would be used to identify any retracement in price, if for example more than 65% of an average days move has been done, then you can use fibs to see if price will retrace to give back some of the potential for an average days move. That is one way to use them.

The size you trade again depends on your personal circumstances, and how adverse to risk you are. Phil's way of trading is to trade 6 positions and scale out at set levels, rather than start out small then add into trades, but again that is his personal preference.

Q. One other question please, does the break out bar have to close above the range to qualify as a break out?

A. No. A breakout is simply as the name suggests. A break out of that range. Whether that be by .5 of a pip, 1 pip or 10 pips. Whether price closes above or below the range boundaries is irrelevant. It is simply price action, and if price goes through that range, that can be called a breakout.

Once you have the confidence of identifying and using the price action sequence, you can pretty much build your own method of trading around that to suit your personal makeup.

I personally haven't traded the range breakout strategy of Phil's for a while. We've moved on to other strategies over on his trading community, but the raw basics I'm trying to explain of price action still remain.

Ultimately goodtyneguy, I think if you re-read Phil's description on page 1 of this thread and re-watch the accompanying video, it should hopefully answer your questions in a better way than I have been able to. I would advise watching all Phils videos on this strategy from his YouTube page with a pad and pen handy to make notes along the way.

Phil Newton YouTube page

 

[forexnetworth]

Hi Caprica1,

Thank you for your very informative post. It was quite helpful. My question relates to pivot points. Did yourself or Phil use them at all to confirm support and resistance levels, or as potential take profit levels or did you just execute the trades regardless and exited at the levels mentioned in your post/completion of daily range.

I have found the daily pivot points to be quite useful and very often price tends to respect these levels.

Also, do you still actively trade this strategy or are you using Phil's new strategy.

Regards

forexnetworth

 

[caprica1]

Hi Caprica1,

Thank you for your very informative post. It was quite helpful. My question relates to pivot points. Did yourself or Phil use them at all to confirm support and resistance levels, or as potential take profit levels or did you just execute the trades regardless and exited at the levels mentioned in your post/completion of daily range.

I have found the daily pivot points to be quite useful and very often price tends to respect these levels.

Also, do you still actively trade this strategy or are you using Phil's new strategy.

Regards

forexnetworth
www.forexnetworth.blogspot.com

Hi forexnetworth, while I was trading in the live room, I didn't personally use pivot points to trade off. All my trade levels were determined by the price action patterns, and fibs, and previous days/weeks high/lows. A few people did request that Phil show pivot points, but to be fair, the way we were trading more often than not they tended to line up with the fibs any way.

I'm not actively trading the range bo strrategy myself anymore, I've moved on to the new strategy, and expanding my knowledge with the help of Phil on some more traditional TA methods to determine where price is and what it's doing, and what it may do.

 

[forexnetworth]

Hi forexnetworth, while I was trading in the live room, I didn't personally use pivot points to trade off. All my trade levels were determined by the price action patterns, and fibs, and previous days/weeks high/lows. A few people did request that Phil show pivot points, but to be fair, the way we were trading more often than not they tended to line up with the fibs any way.

I'm not actively trading the range bo strrategy myself anymore, I've moved on to the new strategy, and expanding my knowledge with the help of Phil on some more traditional TA methods to determine where price is and what it's doing, and what it may do.

Hi Caprica1,

Thank you for your response. Have yourself and Phil moved on to other strategies because this strategy no longer works? From every indication, this range breakout strategy is a robust and solid strategy that still has great potential. I have reviewed Phil's videos and it is clear that he has put a lot of time and effort into perfecting this strategy.

forexnetworth

 

[caprica1]

Hi Caprica1,

Thank you for your response. Have yourself and Phil moved on to other strategies because this strategy no longer works? From every indication, this range breakout strategy is a robust and solid strategy that still has great potential. I have reviewed Phil's videos and it is clear that he has put a lot of time and effort into perfecting this strategy.

forexnetworth

I don't really think it's a case of it not working. I know Phil was using it for quite a while, so I don't think something just stops working. I think it's more of an evolution based on Phils' continuing research. I have heard him say that there a still a few members using the range BO strategy. I also know that he wouldn't start using a different strategy if the results were not an improvement on what he was already getting.

The saying is more pips less work, for the new strategy. The new strategy certainly fits in with my lifestyle a lot better, but that's me personally.

If your interested, I would recommend having a look at the website membership to start with. I know there is still the pay monthly offer, and the 7 day free thing as well, because I don't think there is a lot of info in the public domain around the new strategy.

 

[caprica1]

Beena pretty good week overall this week. Had a very shaky last 2 weeks or so, and it's only towards the back end of last week that I found out why. I had not been sticking to my trading plan. I had been getting lazy and complacent, and not doing the simple things.

And also maybe a little bit of a broker/trade platform change as well. The data from the new broker comes through at a different time, and it suits the strategy a lot better.

I haven't got exact point values at the moment, but I know for a fact it's a positive week to the tune of 500+ pips.

 

[forexnetworth]

Beena pretty good week overall this week. Had a very shaky last 2 weeks or so, and it's only towards the back end of last week that I found out why. I had not been sticking to my trading plan. I had been getting lazy and complacent, and not doing the simple things.

And also maybe a little bit of a broker/trade platform change as well. The data from the new broker comes through at a different time, and it suits the strategy a lot better.

I haven't got exact point values at the moment, but I know for a fact it's a positive week to the tune of 500+ pips.

Hi Caprica1,

Good job earning 500+ pips. Were those pips made using the Range Breakout Strategy or Phil's new system?

 

[caprica1]

Hi Caprica1,

Good job earning 500+ pips. Were those pips made using the Range Breakout Strategy or Phil's new system?

Hi. I'm trading the new system only. I haven't traded the range breakout for quite a while now.

 

[Tullibody]

500 pips. Jeez! I'm finding my way into the B/O strategy and feeling really good about it. Cant see me being able to afford kicking off a position with six trades as (a poster said earlier) is currently the form. Suppose that means the risk incurred for a 500-pip week is considerable. Is it? Or have I got the wrong end of the bat as usual? I risk max 20 per trade and at the end of the week, reckon a net profit of 5/6 times risk (100-120) is pretty good going. Don't know how that compares with results from an entirely different approach to trading/betting. Whatever way, reading Phil's posts (and trying to follow his advice) has transformed my attempts at trading. I am enternally grateful.

 

[caprica1]

500 pips. Jeez! I'm finding my way into the B/O strategy and feeling really good about it. Cant see me being able to afford kicking off a position with six trades as (a poster said earlier) is currently the form. Suppose that means the risk incurred for a 500-pip week is considerable. Is it? Or have I got the wrong end of the bat as usual? I risk max 20 per trade and at the end of the week, reckon a net profit of 5/6 times risk (100-120) is pretty good going. Don't know how that compares with results from an entirely different approach to trading/betting. Whatever way, reading Phil's posts (and trying to follow his advice) has transformed my attempts at trading. I am enternally grateful.

If your only able to risk 20 pips per trade, then that's fine. Work with what you can afford to start with. There is nothing wrong with that at all.

At the end of the day everyone is different. Different circumstance, different tolerance for risk and different capital.

No sense in running before you can walk. That's when you trip up and smash your face on the sidewalk lol

 

[Tullibody]

"No sense in running before you can walk. That's when you trip up and smash your face on the sidewalk lol "

How true, how true. I have been stumbling about for yonks (see joining date). Mostly in the dark.

 

[caprica1]

"No sense in running before you can walk. That's when you trip up and smash your face on the sidewalk lol "

How true, how true. I have been stumbling about for yonks (see joining date). Mostly in the dark.

It's taken me 2 years to get to where I am now. And it's only now that I realise that I don't actually know as much now as I thought I did a year ago, and my results have improved as a result. :smart: