DislikedJust making sure I've got the rules right...for a short, a candle trades at least 5 pips below the 5ema of the highs(but does not touch the 5ema of the lows).
Then you need within 2 candles have a candle with a lower high that also is at least 5 pips below the 5ema of the highs but still does not touch the 5ema of the lows...you enter short 5 pips below the low of this candle.
Am I correct?
PS. Thanks for sharing this system.Ignored
1.) Price must have broken the high 5EMA by 5 pips, it doesent have to close 5 pips above it, it just has to break it by 5 pips.
2.) One of the next two candles (reversal candle) must have a lower high than the setup bar and break the setup bars low by 5 pips.
When you see a proper setup bar form for a sell you would put a sell stop in the market 5 pips below the low of the setup bar and a stop loss 5 pips above the high of the setup bar. If during the next 4 hour candle the high of the setup bar is broken this is now your new setup bar and you repeat the steps until a proper reversal bar puts you in a trade.
Another very important point is the orders to go the other direction. When you get into a trade, lets say a short, you have a stop loss 5 pips above the high of the setup bar(include spread too so its more like 8 pips above). So you have a proper setup bar form and then you have a reversal bar make a lower low and a lower high so now your in the trade. At the close of the reversal bar you put a buy stop order in the market at the exact price your stop is at. This is true with every trade long or short. Once your in any trade and the reversal bar CLOSES you put that order in. Let me know if you understand.
Im in the process of labeling every trade for last month except for the 10 trades I already did you. This will give everyone a total pip count for last month according to how you should trade it via the rules. It may seem complicated but if you stick with it for a few days and ask questions the trades will start to stand out like a sore thumb and become a very simple system.
-Sterling
Founder of Day Trading Forex Live