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yuan83 Jul 10, 2009 11:21am | Post# 1

1 MA 1 TF my humble system
 
Hi, I will like to a system which I thought out. But before posting, i must say about my background. I want to claim that I am no professional trader. I will admit I am a noob to begin with. I blew my 1st live acct in 1 mth (after doubling my demo acct in less than a mth). For my 2nd account, I gain close to 20% in 1 month, before losing my profit in just 1 trade! in 2 days, followed by losing another 20% trying to gamble.

Why am I saying all these? just wanted to say that I am too vulnerable to greed and fear. And I dun really have a system. I will say for me, only mechanical system will work for me. And I am here to want to share one such system to you.

I must apologise it is not totally complete. Hence might need your help to perfect the system.

Here it is: you only need 1 line. 250EMA.
TF: M5
pair: any, but low range pairs might not be that suitable

How it works,
basically when the m5 candle closes on the opposite side of the 250EMA, if above, LONG, if below, SHORT.

How to prevent whipsaw? You may ask.
You need at least 15 m5 candles to be on the opposite side to enter.
Example, candle closes below 250EMA, you need to check that there are 15 (can be refined) m5 candles above the line before you can SHORT. and vice versa.

SL: for less volatile pair, eg EU and GU, 50pips
volatile pair eg EJ and GJ with larger daily range, 80pips.(hope someone can improve these numbers).

TP: no TP,
for EU, when 50 pips is hit, move SL to BE. Keep moving. (Maybe using a trailing stop will be an alternative to lock in profits)
for GJ, use 80 pips

Re-entry.
Sometimes the move might retract all the way to the 250EMA after 50 pips, so probably you will be stopped out. It will normally find support there. Hence it is definitely a good place to re-enter.

Position sizing
Based on your % of risk, just set number of units to trade, based on number of pips risked

Sorry I dun have trades to show, but u can just set according to what I say and you can see it for yourself.

Good luck. Comments and suggestions are welcome

doshur Jul 10, 2009 12:17pm | Post# 2

screenshots of sample trade would be nice.

Turveyd Jul 10, 2009 12:28pm | Post# 3

Thats definately the simplest system known to man

Quick check of your SMA, if you change your 250 EMA to a 250 Smooth, you'll suffer from alot less chop on GU for a quick scan back comparing to to.

Do you want a Alert which will scream at you every time the 250ema / smooth is broken cause it's only downside is I bet you won't be around for most of the crosses.


Good luck!!

yuan83 Jul 10, 2009 12:55pm | Post# 4

1 Attachment(s)
Ok i m bad with this, but I attached an image of just GJ trade.

From the looks of it, the current EU long is valid
Click to Enlarge

Name: trade.JPG
Size: 95 KB

yuan83 Jul 10, 2009 1:06pm | Post# 5

Thats definately the simplest system known to man

Quick check of your SMA, if you change your 250 EMA to a 250 Smooth, you'll suffer from alot less chop on GU for a quick scan back comparing to to.

Do you want a Alert which will scream at you every time the 250ema / smooth is broken cause it's only downside is I bet you won't be around for most of the crosses.


Good luck!!
that's a good suggestion, simple should be better against whipsaw but just now I tried changing to SMA but hmmm, looking just like that, it might not have much of a difference.

Anyway, EU m5 candles crosses 250ema, enter at 1.3949 (though I hesitated and entered 10 pips late). Better entrance is of cos to wait for retractment, maybe can enter 5-10 pips better. But given it's Friday, I will take a 50pips profit if there is.

Turveyd Jul 10, 2009 1:14pm | Post# 6

that's a good suggestion, simple should be better against whipsaw but just now I tried changing to SMA but hmmm, looking just like that, it might not have much of a difference.

Anyway, EU m5 candles crosses 250ema, enter at 1.3949 (though I hesitated and entered 10 pips late). Better entrance is of cos to wait for retractment, maybe can enter 5-10 pips better. But given it's Friday, I will take a 50pips profit if there is.

No the bit which your setting the EMA has a SMOOTH option, thats what I've moved to recently, seems much stronger at getting trends interestingly.

But both on the chart at once and score them, then fiddle again against the best and score it to you get optimal.

grillbritt Jul 10, 2009 1:18pm | Post# 7

1 Attachment(s)
I like the simplicity
However, as with most of the systems based on MA's they don't work great during choppy seasons (attached) . I think the 50 pip SL at E/U 5 m chart is way too high.

I would go down to 20 max, and also divide the TP into 2 or 3 levels. First at 15-20 pips, and the rest could be trailing stops.
Click to Enlarge

Name: ema.jpg
Size: 44 KB

yuan83 Jul 10, 2009 1:31pm | Post# 8

I like the simplicity
However, as with most of the systems based on MA's they don't work great during choppy seasons (attached) . I think the 50 pip SL at E/U 5 m chart is way too high.

I would go down to 20 max, and also divide the TP into 2 or 3 levels. First at 15-20 pips, and the rest could be trailing stops.
wow ok that's choppy! That's actually my point of having the minimum no. of candles as a filter so we wun enter incorrectly. Is 15 a good number? I will say it requires more testing.

I wun say 50/75pips is alot, remember the trade I posted give 200 in the end. This shifting of 50 and 75pips is also a way to prevent retractment before going in ur direction, from closing out ur trade too early.

So though i did consider smaller tp/sl, however small tp might make u miss out on a very large trend. But I must admit I dun like to have a 99 pips gain close at breakeven. That's quite sad isn't it,

yuan83 Jul 10, 2009 1:39pm | Post# 9

1 Attachment(s)
the EU trade entry. As I say, it's Friday, and at such a timing, it might be better locking profits early though
Click to Enlarge

Name: trade2.JPG
Size: 60 KB

mary4x Jul 10, 2009 1:48pm | Post# 10

Yuan, what Moving Average indicator are you using? I need to learn how to use moving averages.

Mary4x

yuan83 Jul 10, 2009 2:04pm | Post# 11

Yuan, what Moving Average indicator are you using? I need to learn how to use moving averages.

Mary4x
250 exponential MA. though turveyd suggested above using the smooth MA. idea taken.

yuan83 Jul 10, 2009 11:06pm | Post# 12

No the bit which your setting the EMA has a SMOOTH option, thats what I've moved to recently, seems much stronger at getting trends interestingly.

But both on the chart at once and score them, then fiddle again against the best and score it to you get optimal.

Hi turveyd, sorry sometimes i read things half way. ok i just tried the smooth. It looks WOW!. will fine tune it. Thanks alot!

But then again either line has it's own flaws if u look at it, because though 250 smooth can help to reduce whipsaws in a way, but sometimes the bars closes above 250 smooth, you buy then it move down later on, while if you have used 250EMA, the trade might have come out as BE

toshi Jul 11, 2009 2:07am | Post# 13

50/80
 
Hey man,

I agree that's about as "simple" as you can get. 1 MA, 1 TF and all mechanical.

Now, I've been doing this a while and I'd like to share something.
It's strictly an opinion based on what I feel comes from experience.

And here it is: We are all market students

Even the so called pros who, in great number over the past year, summarily had their head handed to them.
Many accounts down 20, 30, 40 percent. And these are professional money managers.
They have staff and HUGE amounts of capital and extremely complex and sophisticated systems

And they still lost their ass !

My point is: Do not feel bad that you have lost.
In fact, be grateful that you have lost and lived to trade another day.

So, I like your system. I like it because it IS simple. I don't even know if it's profitable.
A little backwards and forwards testing could help answer some of that, but,
either way, the simplicity of your approach is going to open the door for you to make money.

My approach is also simple: Buy the green candles, sell the red candles.

I feel I'm well read and fairly well skilled in applying technical analysis.
And it has seldom ever made me a dime! Keep it simple. Like shopping for a loaf of bread or something.
Why make it complicated ? The biggest (and wealthiest) players don't use all that stuff.
If they see momentum, they buy it or sell it. When momentum fades, so do they.
Off into the sunset with everyones else's money who traded with 50 indicators on their chart
and tried to explain why the market should go down when it went up, or vise versa.

So, my freind, keep doing what you're doing.

I hope for you 2 things.

1) I hope you find out by testing if your system or method has a positive or negative expectancy.
I hope you learn this sooner, rather than later. It's probably not profitable.
Sorry. Truth is, most of them are not. But that's okay, because:

2) I hope you will continue to rethink the way you see the market and continue to simplify you view(s).
One day you'll pop open a chart and go, " hey, that's where the market reversed and now
it's going up... I'm gonna buy some here, with a reasonable stop here and
I'll check the trend in a couple hours or in a few candles and see if I need to do anything at all..."

And win, lose or draw, you'll be okay with whatever happens because you got prepared
before you ever clicked the button and you are confident that you'll win more than you lose,
so this trade is, "just another trade".

And you kept it simple.

Good luck to you, not just in trading, but in all things.

Toshi.

P.S. the 50 E/U and 80 G/U is good for swings, a little too much for scalps/st daytrades
and too small for anything lasting longer than a day because of ATRs, but for what you're doing,
I think the 50 E/U is good. Try testing this: +50 and +100 or -50 and -100 from NY close.
See what the price action does each and every day at or near these levels. You might be surprised.

yuan83 Jul 11, 2009 6:19am | Post# 14

Hey man,

I agree that's about as "simple" as you can get. 1 MA, 1 TF and all mechanical.

Now, I've been doing this a while and I'd like to share something.
It's strictly an opinion based on what I feel comes from experience.

And here it is: We are all market students

Even the so called pros who, in great number over the past year, summarily had their head handed to them.
Many accounts down 20, 30, 40 percent. And these are professional money managers.
They have staff and HUGE amounts of capital and extremely complex and sophisticated...
Hi, thanks for the encouraging post! out of curiosity, where are u from? ur nick sounds slightly Japanese! ha, anyway, well losing is part of this "game", but probably the bad thing about myself is probably I dun like to lose! hence I allow a small loss turn big. This I know must be curbed.

Anyway, I wun hate myself to lose if I trade properly, but bad thing is, alot of those stupid big losses are gambles! My account I will say, is definitely small compared to many in this forum so relatively I am still ok. Anyway if you have a proper system is enough, what is more impt is to have the psychology and trade with a plan.


anyway this system is not yet mechanical, though I m trying to make it...problem is still the whipsaw, how u know if it's really to be a new trend forming. That is probably a reason why i use 50 as the SL, because if it's a wrong trend, u will be very very wrong. But yes I'm trying to use ATR to better tune the system

toshi Jul 11, 2009 1:03pm | Post# 15

Hi, thanks for the encouraging post! out of curiosity, where are u from? ur nick sounds slightly Japanese!
You're welcome.

Actually, I am in and from the US. I see that you are in Singapore.

I used to send many Exchange For Physical trades thru SIMEX.
The cost was a bit higher back then, but the convenience was worth it.
Nowadays, US traders can off-set currency futures via globex 23 hours a day and for
a fraction of the cost, so I'd expect SIMEX has become more competitive these days.

Anyway, don't forget to cut those loses or use very small leverage.
If you use less than 10:1 leverage, it's less likely that you'd get a margin call
or get forced out of a position, even if it was deep in the red.
There are times when I've traded without using leverage at all.
Certainly don't make as much profit, but the loss limit factor is the key there.

But, first choice is to cut the loss, when it's small. That way you can make the money back
rather quickly and without so much time spent.

For whipsaws, you could consider checking the over/under 250 MA price action
against some measure of momentum. ADX above/below 25 with either +DI or -DI rising is popular.
But this is adding yet another indicator and is not keeping it simple.

Can you create tick charts ? If you use only metatrader it's not an easy programing task.
If you have another chating package and can customize your charts, you might want to see
if 100 tick candles act any dfferent than 5 minute candles and tend to smooth out the choppy times.
However, this will also affect the 15 candles parameter somewhat, check and see.

yuan83 Jul 11, 2009 2:18pm | Post# 16

You're welcome.

Actually, I am in and from the US. I see that you are in Singapore.

I used to send many Exchange For Physical trades thru SIMEX.
The cost was a bit higher back then, but the convenience was worth it.
Nowadays, US traders can off-set currency futures via globex 23 hours a day and for
a fraction of the cost, so I'd expect SIMEX has become more competitive these days.

Anyway, don't forget to cut those loses or use very small leverage.
If you use less than 10:1 leverage, it's less likely that you'd get a margin call
or...
Wow, are you a full time trader or sth? ha SIMEX no longer around, it's changed to SGX..ha.

A stupid question but tick charts are different from if I use a 1min chart?
I will say I am not familiar with ADX though I read it before, and yes it will make it less mechanical, but well I will go and re-understand about this indicator.

But I think it will test what I have first, after what the aim is to capture trend, so even if the success is not high, but with high R:R, it can still be profitable. But current markets shows not enough whipsaws, so I can't comment as yet.

Turveyd Jul 11, 2009 2:58pm | Post# 17

Hi turveyd, sorry sometimes i read things half way. ok i just tried the smooth. It looks WOW!. will fine tune it. Thanks alot!

But then again either line has it's own flaws if u look at it, because though 250 smooth can help to reduce whipsaws in a way, but sometimes the bars closes above 250 smooth, you buy then it move down later on, while if you have used 250EMA, the trade might have come out as BE
Nothing is perfect sadly you'll get less trades and have to enter more near with the direction rather than crosses only

run both see which you prefer mess around with 250 might find a better setting still

totally moved to smooth on my system this week huge improvement

Turveyd Jul 11, 2009 3:02pm | Post# 18

Current Market is very trendy has been for ages do milk it while you can and if you start taking losses stop movE to demo until it's profit able again and repeat easy

toshi Jul 11, 2009 6:27pm | Post# 19

1 Attachment(s)
Regarding whipsaws, Friday (yesterday) July 10 was a texbook perfect day for your system.

1 MA / 1 TF

15 candle setup / 50 pip stops

This would have, could have, should have made money.

Here's 5 minutes w/ 250 EMA
Click to Enlarge

Name: 250ema.PNG
Size: 39 KB

toshi Jul 11, 2009 6:31pm | Post# 20

1 Attachment(s)
And here is the same segment of time ( ~ 24 hours worth) using 100 tick candles.

The entry signal was triggered somewhat earlier and the crossovers were a bit more predictive.
Click to Enlarge

Name: 100tick.PNG
Size: 45 KB


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