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-   -   A "new" simple system based on MA (http://www.forexfactory.com/showthread.php?t=278211)

hmaoui Jan 27, 2011 9:57am | Post# 1

A "new" simple system based on MA
 
Hello! I am a FF member for many years noow but I never posted a thread or only one started but avorted because it was a little bit similar to ichimoku360, and I didnt want to confuse anybody.

So, firstable, I am a trader whose the first question is how I can limit the risk? So my system is developped with this bias.I prefer to be flat than in a bad trade. I prefer to trade the trend than countertrend trading. So maybe the system will not suit your personnality, so feel free to get away or to criticize in order to improve it not to destroy it.

The ideas behind this system is simplicity, low risk, identify the trend. So, about simplicity I will use simple indicators everyone can understand : it means price action / MAs / Oscillator

The system can be used in any TF and currencies. But hte longer is the TF, the more reliable it is as it reduce the risks of false signals. Also, according to the pairs you will trade, MM will be different because of volatility.

So here is the system :

Guppy MAs : ST (3/5/8/10/12/15) LT (30/35/40/45/50/55 instead of 60 because it is a Fib number)
Oscillator : Use one you master -> I use Slow Stochastics (5/3/3) or RSI (9) but it tells you the same thing, overbought oor oversold.
Price Action : look at candlesticks patterns in Google or search in the forum if you dont know.
TimeFrame (TF) : Use the one which suits your personnality and your balance account -

The rules :

1/ Identify the trend if there is one : we will use the MAs (ST>LT and pointing up then Bullish - ST<LT and pointing down then bearish - LT flat then no trend)

2/ If the trend is bullish you will only go long. Then wait for compression of ST MAs and Oscillator in oversold zone - the best is when you get a candlestick pattern such as a hammer. In this case, you can enter with a tight stop (depends on the pair and the TF) and let your profits run away. Reverse for Shorts (Trend bearish, etc....).

3/ If there is no trend, then you will trade with oscillator : Sell when you are in the overbought zone and buy when you are in the oversold zone. Also draw your support and resistance lines because after few volatility, high volatility will come and so a new trend will start, and then you will change the way you trade (go to the first point)

4/ Exits could be different according to many things : if you trade on short TF maybe you expect to get a fixed amount of pips, but if you trade on longer TF you should let your profits run until the market is giving you a sign of reversal. It can be a divergence on the oscillator, a candlestick pattern, or simply a cross of the LT MAs by the price. In any case, be careful when you reach round numbers, and when there is a divergence on the oscillator. You can also exit when your oscillator is in the overbought (long) or oversold (short) zone and wait for a retracement to re-enter again and again until the trend is over. I insist : it depends on your personnality.

As every systems....it will fail ! But as you can put tight stop, you can often lose while your profit will grow your account. Be very strict on MM ! Personnally, I put a stop as tight as 5 pips on 1mn TF for scalping and get 12 pips profit. So the W/L ratio is around 2:1. So if the rate of success is over 50% (and sure it is if you follow the rules), your account will grow up !

I will post charts later, but feel free to give a feedback and to rate the system !

hmaoui Jan 27, 2011 10:12am | Post# 2

Forgot
 
For exits, you will also be aware of pivot points, especially if you trade on short TF !!! Very important !!!!

pornificator Jan 27, 2011 2:12pm | Post# 3

can you post your template and indicators?

Frying Jan 28, 2011 4:29am | Post# 4

Simple
 
Hello,

I also trade guppy MA with stoch for confirmation. Looking forward to seeing charts of how you handle the flat MA range periods with the overbought / oversold criteria. This is one area that has always caused me problems.
Thanks

hmaoui Feb 22, 2011 10:06am | Post# 5

Sorry for my late answer...
 
I was very ill, but that's another problem. So when you identify there is a range bound trading period, you only use oscillators. But use only oversold and overbought level with very tight stop because after a low volatility period will come a new high volatility period (cycle), which means that a trend will develop. And then, you use the MAs system.

Hello,

I also trade guppy MA with stoch for confirmation. Looking forward to seeing charts of how you handle the flat MA range periods with the overbought / oversold criteria. This is one area that has always caused me problems.
Thanks

hmaoui Feb 24, 2011 4:28am | Post# 6

A chart on 1mn TF
 
1 Attachment(s)
You can see the system
Click to Enlarge

Name: GMMA.jpg
Size: 201 KB

hmaoui Feb 24, 2011 6:18am | Post# 7

In the example above...
 
....you can see that we identify a trend with the GMMA (also the DMI that I add sometimes but not necessary - just to avoid fake signals on short TF) and when the trend is bearish (prices under the GMMA and ST under LT - here I use only 3 MMA to keep it very clear and because on my Web PF I can't put more than 5 indicators), we wait for the price to retrace in the MMA and Stochastics to be over 50 or in overbought territory. When the price is near the MMA and the Stochastics are in overbought level or over 50, then we can jump in with a tight stop and let the profits run. I usually wait until it crosses over the LT MMAs when I trade on short TF as 1mn. You can easily make 30-50 pips a day using this system, with a high leverage without a big risk because of a tight stop (no more than 10 pips spread inculded on 1mn TF).

After the bearish trend, near 8h23, you can see it closes over the LT MMAs at 1.3724, so we exit for a profit of 40 pips (entered at 6h13 at 1.3765 according to the rules). After that the ST MMAs went over the LT MMAs and confirmed by the DMI, so we wait for Stochastics to be in oversold zone and the price to close near the MMAs. So, then we can enter at 8h36 at 1.3724 with a tight stop. I took this trade and exited at 10h34 at 1.3788 for a 62 pips profit !

I didn't take the frst trade because it was too early for me (lol), but with 62 pips for the day in around 2 hours, I am happy. I could continue, but you know...I trade to live not live to trade (this is my philosophy).

hmaoui Feb 24, 2011 6:29am | Post# 8

All critics accepted...
 
....if it is to improve the system. So do not hesitate to post your comments and charts ! Try it in demo before in real of course (or with a mini account)

hmaoui Feb 25, 2011 1:05am | Post# 9

Look at charts
 
I dont use MT4, so I do not have templates nor indicators. But you are welcome if you can post it for those who use MT4.

can you post your template and indicators?

hmaoui Mar 2, 2011 10:53am | Post# 10

Another day with good profits...
 
1 Attachment(s)
Look at the chart attached : 3 entries with 3 mini lots each time for a total profit of 495 pips....and I never risked more than 2% of my capital !!! Nice day....not always as today but very often !!! You can really upgrade your account balance being sharp and following these strict rules with a good MM...
Click to Enlarge

Name: CHART3.jpg
Size: 349 KB

dappa Mar 2, 2011 11:27am | Post# 11

Fellow trader Trying to understand your system
 
hey my friend, how long have you been trading this system, you trade on the 1min time frame only?

dappa Mar 2, 2011 12:48pm | Post# 12

Fellow trader Trying to understand your system
 
"MAs (ST>LT and pointing up then Bullish - ST<LT and pointing down then bearish" What is st and Lt, are we using the two different ma set for a long and ansd a short, Im a little confused as to which mas we are using to look for trend, you posted stating st and one stating Lt, dont know what that means

hmaoui Mar 3, 2011 1:52am | Post# 13

All Time Frames are possible
 
hey my friend, how long have you been trading this system, you trade on the 1min time frame only?
Only the SL has to be different and your money management. The idea behind this system is to buy cheap in an uptrend and sell high in a downtrend.

I trade this for about 3 years now.

hmaoui Mar 3, 2011 1:54am | Post# 14

"MAs (ST>LT and pointing up then Bullish - ST<LT and pointing down then bearish" What is st and Lt, are we using the two different ma set for a long and ansd a short, Im a little confused as to which mas we are using to look for trend, you posted stating st and one stating Lt, dont know what that means
I use ST (Short Terms)and LT (Long Terms) MAs of Guppy system. But as I can't draw more than 5 indicators on my Webplatorm, I use the 12, 30, and 60 MA with DMI (to confirm the trend) and Slow Stochastics (5/3/3).

hmaoui Mar 3, 2011 2:47am | Post# 15

1mn TF
 
hey my friend, how long have you been trading this system, you trade on the 1min time frame only?
When you trade on 1mn TF, you have to be very careful and check the trend on the 5mn TF to be sure.

hmaoui Mar 3, 2011 9:16am | Post# 16

News
 
One exception you have to be aware of is the news which are important Today, interest rate of ECB and the speech of JC Trichet should influence a lot trading systems....Especially on short TF such as 1mn and 5mn TF. So you avoid trading about 30 mn before and after the news release. Tomorow it will be the NFP....

hmaoui Mar 9, 2011 1:04pm | Post# 17

No replies / No questions
 
Maybe everyone has a very good system which works on every TF, every pair etc...or maybe you are all looking at the best rated and the most famous threads. But I can guarantee you that it's worth it !!!

ukcool Mar 9, 2011 1:21pm | Post# 18

Post your template plus your indicators. Along with chart examples of your entries.

That should get people involved in your thread

hmaoui Mar 10, 2011 5:53am | Post# 19

About templates and charts
 
Yes you are right ! I will try to post more charts to show the potential of this system. As I trade on 1mn and 5 mn TF, it will be after my entry because it is more important for me to trade in real than post on FF ! - But I will try to post my entries everyday.

About templates and indicators, I do not use MT4 so I dont have any template or indicators to share. But it is very simple ! You put the GMMA template which you can find on FF (Perosnnaly I put only the 12EMA on 5mn or 15EMA on 1mn + the 30EMA and 60EMA as a tunnel because it is clearer for me) + DMI14 + Stochastics 5/3/3. These indis are available on all PF !

Post your template plus your indicators. Along with chart examples of your entries.

That should get people involved in your thread

ukcool Mar 10, 2011 6:00am | Post# 20

No problem buddy.


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