Use Coupon Code “ClosingDown”
AIMS The Box Indicator
AIMS Box is derived from the MT4 Standard Indicator under the Bill Williams Category. It is one of the best MT4 Forex Trading Indicator for identifying Support Resistance, Entry Point and Stop Loss Levels and one of the best Trailing Stops mechanism. One Indicator to rule them all. The AIMS Box indicator has been derived from the Bill Williams Fractals Indicator.
Definition of Fractal Indicator:
“The fractal indicator is based on a simple price pattern that is frequently seen in financial markets. Outside of trading, a fractal is a recurring geometric pattern that is repeated on all time frames. From this concept, the fractal indicator was devised. The indicator isolates potential turning points on a price chart. It then draws arrows to indicate the existence of a pattern. The bullish fractal pattern signals the price could move higher. A bearish fractal signals the price could move lower. Bullish fractals are marked by a down arrow, and bearish fractals are marked by an up arrow”. (Investopedia)
Introduction to iTradeAIMS The Box Indicator
Here I will attempt to give a brief introduction to this amazing indicator that has revolutionised my trading since 2009. Everything in the universe is energy and energy follows the path of least resistance. When it moves it heavily influenced by a structure. When energy flows it reacts to the underlying structure. Electricity flows through copper wires easily compared to “my arm”.
A river flows smoothly on flat plains of the land but becomes violent when flowing down a mountain. Why is this? Why does it change its behaviour? The Science of Chaos Brings us here. Everything in the universe has an internal or underlying structure. That structure is often, but not always, hidden.
The Market has an underlying Unseen Structure. And it can be revealed by using this indicator.
The AIMS Box or Fractal Box is made of upper and lower fractals. It consists of a minimum of five bars with the top of the box being the upper Fractal; the bottom of box, the lower Fractal
The AIMS Box Upper and Lower Levels are the high and low of the AIMS Box – the upper and lower Fractals.
This indicator, by itself, provided the concept that revolutionized my forex trading for good.
AIMS Box Indicator – A Complete Trading System
The AIMS Box indicator can be used as a complete trading system because it can gives you objective information about everything a trading system needs. A Forex Trading System must have answers to 3 questions.
- Where to Enter?
- Where to Exit?
- How to Calculate Risk per Trade?
AIMS Box gives you all the answers. Forex traders use AIMS box for the following:
- Where to Enter the Market?
👉 Traders use AIMS Box Levers for Crystal Clear Entry Levels. - Where to Put Your Stop Loss?
👉 Traders use AIMS Box Levels for Setting their Stop Loss Orders. - How to Calculate Risk Per Trade?
👉 Traders use AIMS Box Levels for calculating how much to risk per trade. - Trailing stop loss mechanism.
👉 Traders use AIMS Box for trailing stop loss and lock in profits.
Besides that, AIMS Box Indicator generates the following additional information about the market:
- The market always creates an AIMS Box before it turns around. Every trend starts and ends with an AIMS Level.
- Entries are always taken on the breakout of the AIMS Box. We don’t take entries inside the AIMS Box on the timeframe that produced the Setup. When price is inside the grey shaded zone, it is inside the AIMS Box; it is within the AIMS Levels – we look the breakouts
- We prefer a short AIMS Box: a tight range between the AIMS Levels. New trades are preferably taken on the break of tight AIMS Levels. AIMS Levels are considered tight, shallow or narrow when the distance between upper and lower AIMS Levels, on M1, is less than 15 pips.
- The stop loss is always set on the opposite side of the AIMS Box from where the trade was entere
- We do money management using the number of pips distance between upper and lower AIMS Levels.
- We use the AIMS Box for trailing our hard stop loss – basically behind the obvious support and resistance.
- It is the structure of the structure of the market. Elliott Wave is the structure of the market and the AIMS Box is the structure of Elliott Wave.
What is the Underlying Structure of the Market?
The underlying structure of the Market is Elliott Wave.
And the Underlying Structure of the Elliott Wave is the Fractals.
This BOX is an indicator based on the Fractals.
The Upper and Lower Levels require a minimum of five bars with the top of the box being the upper Fractal ; the bottom of the box, the lower Fractal
The AIMS Levels are the high and low of the AIMS Box – the upper and lower Fractals.
This indicator, by itself, provided the concept that revolutionised my trading.
What are the Benefits of Using AIMS iTradeAIMS The Box?
1. Identify Trend:
The Box will also help you identify Trending Markets.
The Stepping Up pattern it creases is an indication of UPTREND.
The Stepping Down pattern indicates DOWNTREND.
2. Identify Entry Points
The Box will help you identify Entry Points into the market.
There are two ways it helps you make entries into the market.
a) breakout entry
b) trend following entry
3. Identify Range-Bound Market
The Box helps identify a sideways range-bound market.
When the box is not creating either a stepping up or stepping down pattern, it usually indicates to a sideways or rangebound market on that time frame.
4. Help you Make Entries: Calculate Correct Positions Size and Risk Size
The BOX is the structure of the market that offers the best method of How to calculate Risk Per Trade based on the market generated information.
Calculate your Entry Level and Stop Loss level using the Box Levels on either side of the box.
Buying the Box:
Set a Buy Order a Point above the Box and Stop Loss a point below the Box Low.
Selling the Box
Set a Sell Order a Point Below the Box Low and Stop Loss a Point Above the Box High.
5. Stop Loss Trailing Mechanism to Lock in Profits
The box levels are used for Trailing Stops.
For Long (Buy) Orders use the box low as a stop loss level for trailing and locking-in profits.
For Shorts (Sell) Orders, use the Box High levels for trailing stop and lock in profits.
6. Support and Resistance
The Box Levels (upper and lower) clearly shows support and resistance – where price approached a level and could not go further, forcing it to retrace on itself.
Pay attention to how box levels create ranges and also indicate trends.
How to Use this Indicator with other Indicators?
This indicator is great on its own but even greater if used in conjunction with iTradeAIMS The Wave and The Gator and The Magic Purple (Script Available FREE to use on iTradeAIMS Profile)
👉 The market always creates an AIMS Box before it turns around.
👉 Every trend starts and ends with an AIMS Box.
👉 Entries are always taken on the breakout of the AIMS Box.
“Within an AIMS Box there is always an Elliott Wave of a certain degree”
If you understood this concept you are in line with the structure of the market. The market cannot turn around without creating an AIMS Box. There is always always always an AIMS Level at the top or bottom of a wave.
Now let’s study the anatomy of the AIMS Box and its Levels.
Anatomy of the AIMS Box Indicator
As mentioned earlier, the AIMS Boxes are formed using high and low Fractals. A new AIMS Box will be created whenever price makes a new high or low Fractal.
The Bottom of the AIMS Box – the Lower AIMS Level – is created when a low Fractal is formed i.e. the low of a candle is lower than two candles to the left and two candles to the right.
The AIMS Level clearly shows support and resistance – where price approached a level and could not go further, forcing it to retrace on itself.
Pending Sell Order is set 1 pip below the lower AIMS Level (provided it’s a correct Setup).
The top of the AIMS Box – the Upper AIMS Level – is created when a high Fractal is formed i.e. the high of a candle is higher than two candles to the left and two candles to the right.
Pending Buy Order is set 1 pip + spread above the AIMS Box (provided it’s a correct Setup).
Does the AIMS Box Repaint?
The Standard MT4 Indicator Fractal Indicator in MT4 does repaint. But AIMS Box Indicator Does NOT repaint. The Standard MT4 indicator, Bill Williams Fractal, is coded to paint a tentative Fractal Level marked with an arrow, at the end of the 4th candle. But a Fractal formation is only complete when there are 5 candles. The AIMS Box prints a level only after the close of the 5th Candle.
Do Not Sell AIMS Box Lows if Level is Above AIMS The Gator Lines
AIMS Box Can Show Trend
AIMS Boxes create an excellent visual trend direction pattern. When there is an uptrend, you will see a Stepping Up Pattern. Likewise, during a down trend, you will see a stepping down pattern on the AIMS box indicator.
Where To Set Stop Loss Orders using AIMS Box Levels?
Setting a stop loss is a must. Professional forex traders never trade without setting a stop loss order. Forex Traders use AIMS Box levels for setting stop loss orders.
Traders can set a stop loss order on the opposite side of the AIMS Box. e.g. If your entry is a Buy Order then your order will be a pip above the AIMS Box Upper Level and at the same time you will set a stop loss order on the next available AIMS Box Low Level.
Stop Loss for Buy Order: 1 pip below lower AIMS Level
Stop Loss for Sell Order: 1 pip + spread above upper AIMS Level
Distance between Upper and Lower AIMS Levels
The height of the AIMS Box – the distance between Upper and Lower AIMS Levels – should be considered before deciding whether or not to enter a trade.
For Trading the M1 or M5 Time Frame generally 15 pips or Less:
- We prefer to trade with tight AIMS Levels – a Tight or Narrow AIMS Box.
- For an M1 chart on EUR/USD, at the time of writing, 15 pips or less is considered tight and tradable.
When AIMS Levels are more than 15 pips apart, the potential risk-reward ratio decreases.
What is a Flat or TIGHT Box?
A tight box is horizontal rectangle. It’s highs and lows are within the highs and lows of the previous levels to the left. We often refer to this as “Flat Boxes”.
What is the A Big or TALL Box?
A tall box is vertical rectangle. It’s highs are higher than highs to the left and lows are lower than the low to the left. We often refer to this as “Tall Boxes”.
Example: Suppose we have a Setup and AIMS Levels are 15 pips apart from each other, we would require an 18-pip stop loss (assuming a 2-pip spread plus our 1-pip margin). With an 18-pip stop loss on M1, you will obviously have to gain at least 18 pips to just make it to 1:1 risk-reward. We would like to see enough space for at least a 1:2 to stay consistently profitable, so be cautious when you want to take a trade that requires a stop loss larger than 15 pips.
- We set a hard stop loss on the opposite side of the AIMS Box.
- If price immediately turns around we can exit on Blue/Red Dot before the stop loss is hit.
- or we can stay in it until stopped out.
What is Bracketing?
Bracketing is the placing of pending buy and sell orders, either side of the AIMS Box.
We Bracket when: –
- Market is going sideways and there is no obvious trend (Alligator asleep)
- AIMS Levels are tight
- AIMS AO is close to the Zero Line with short histogram bars
Bracketing is used only when
- Alligator is asleep on both M5 and M1 (Current and 5 times higher time frame)
- AIMS Levels on M5 and M1 are both tight
When we have all the lines intertwined, like in the above picture, we bracket the market each side of the AIMS Box. A stop loss for the buy order is placed exactly at the sell order level and vice versa. See the picture on the next page.
Important:
- Do not bracket if the trend direction on M5 is clear.
- If the Alligator is open on M5, we would usually be biased to take trades only in that direction.
- Remember that we only trade in the direction of the trend on M5.
- For beginners, I recommend waiting for Alligator on M5 to open and then wait for a Setup on M1.
Note: We have stopped using this technique. We only trade in line with the Purple Line of The AIMS Gator Indicator
What is ‘Stop and Reverse’?
Bracketing and the ‘stop and reverse’ are similar things. When we bracket the market our stop loss is on the other side of the AIMS Box, exactly at that level we have an order to go in the opposite direction.
For example, if triggered long but the breakout fails and our stop-loss is hit, a sell order is activated as soon as we are stopped. This is called a ‘stop and reverse’ order, whereby when one order triggers and reverses; it stops at the other side of the AIMS Box and triggers a trade in the opposite direction. This ensures that we don’t miss a trend.
What if both Entries Fail?
It is possible that it might happen. There is nothing one can do about it; it’s part of the game. Wait for next Setup.
Advantages of Bracketing: You will never miss a trend again. You must do your money management correctly – please read Money Management in Chapter 4.
Rules for Bracketing:
- We bracket only when the Purple Line is also inside the AIMS Box. If Purple is away from us, we take trades in the direction going away from the Purple Line.
- We place bracket trades when the Alligator is asleep on M5 as well. If the Alligator is awake on M5, trade long/short in line with where the mouth is pointing – “the trend is your friend”.
AIMS The Box Indicator – TradingView Version: FREE For You
Below is the link to the TradingView Scrip. Click on this link and add this script/indicator to your favourites.
https://www.tradingview.com/script/VOrhrepL-iTradeAIMS-The-BOX-Indicator/