No Name Trading System

Greetings fellow traders,

Today I would like to share with you a trading system I developed a while back. I have been using this method since October 2009 with consistent profits. System performance can be viewed at my MT4stats page by clicking on the link in my signature below

I will present to you this system in the simplest format possible so that it is easy to understand and will include tips that will help in your implementation.

In short, the system consists of four indicators and those are:

1) Triggerlines2 (20,5,300)
2) Close Line (20,5,300)
3) Zerolag MACD (12,26,9)
4) Cycle_GJH4

The system utilizes 3 time frames to represent short, medium and long-term trends. The time frame of the trend could by anything you are comfortable trading; the only rule is that each progressively higher frame needs to be at least 4 times the prior frame. Personally I use 1Hr, 4Hr, and Daily charts. Since I am not able to be in front of the screen at all times, I have chosen time-frames that will allow me to swing trade the market at a comfortable pace.

I use the long-term time-frame to determine trends, the medium-term time-frame to determine setups, and short-term time-frame to determine entry.

Types of Trades:

1) Trend Trade: a market position in the same direction of the long-term and medium-term trends; position taken at the start of the trend
2) Trend Continuation Trade: a market position in the same direction of the long-term and medium-term trend; position taken after a corrective move or counter-trend to the main trend exhausts itself.
3) Counter-trend Trade: a market position in the opposite direction of the long-term trend. Utilized short-term and medium-term trends to trade; position taken at the start of the corrective move or counter-trend on the short-term time-frame.

Tip:
- Counter-trend trades are of highest risk.

Market Evaluation:

The first thing I do is determine long-term trend using the Daily chart. I am looking for descending/ascending Triggerlines, with bar closes below/above the fast Triggerline. In addition, I am looking for descending/ascending Zerolag MACD and Cycle_GJH4. This tells me that a trend has been established.

Tip:
- Trade only when trend is established on highest time-frame. If trend is unclear, stay out!

Next, I evaluate the medium-term trend on the 4H chart. Initially I determine whether the indicators on this time-frame are in agreement with the longer time-frame or in contradiction. If medium trend is in synchrony with the long-term trend I only trade trend and trend continuation trades. If medium trend is not in synchrony with the long-term trend, I then either stay out of the market, or capitalize on counter-trend setups.

Tip:
- Trend and trend continuation trades should always be in the direction of the highest time-frame.
- Trend in the second highest time-frame will last longer when in the same direction as the trend in the highest time-frame

Once the state of trend on the long-term and the medium-term is determined, I use the 1Hr time-frame to time my entry in the desired direction of the trade. This means I attempt to obtain best entry price by timing the tops and bottoms.

Tip:
- Never base your trades on the lowest time frame alone, only use the highest two frames to determine trade setup.

Types of Setups:

Whether I am trading trend, trend continuation or counter-trend trades, I always look for 3 setups to trade and those are:

1) Fresh Cross: (Trend Trade)
a. Cross on second highest time-frame in same direction of trend on higher time frame
b. All indicators are changing directions on the same bar (i.e. fresh cross or turns on all indicators)
c. Cross must occur on previous bar or higher (bar 1+) and not current bar ( bar 0)
d. Entry is on bar 0 once the cross has been established.

Tip:
- A cross is when the two signal lines (Zerolag MACD and Triggerlines) have crossed over each other one bar ago. Crosses on current bar do not count.
- Never trade after a long candle

2) Fast Retracement (Trend Continuation Trade)
a. Triggerlines are well separated with steep angle of separation.
b. Zerolag MACD Fast line is well separated from Slow line
c. Price retraces main move sharply in the same candle and in opposite direction of trend.
d. Enter in direction of main trend
e. This is the only trade that takes place on current bar or bar 0 in real-time
f. Will require you to be in front of the screen to catch it

3) Slow Retracement
a. Triggerlines are well separated with steep angle of separation.
b. Zerolag MACD Fast line is well separated from Slow line
c. Price retraces main move over several bars and in opposite direction of trend
d. Enter in direction of main trend
e. Entry is on the open of bar 0 once bar 1 retraces to touch the fast Triggerline

Important Points to Understand:

1) Trade setups should be used as guidelines. As you practice and gain experience you will be able to determine the strength of the setup.
2) Zerolag MACD and Cycle_GJH4 indicators are susceptible to divergence (i.e., they will go one way and price will go another way)
3) If observation 2 above occurs on the long-term time-frame, stay out of the market or take counter-trend trades.
4) ZerloLag MACD will always respond first to changing market conditions and thus is more susceptible to whipsaw/fake-outs as time-frame decreases.
5) Triggerlines will respond second (most reliable)
6) Cycle_GJH4 will respond third
7) Triggerline and Zerolag MACD separation, the wider and steeper the slope, the stronger the momentum and trend
8) Cycle_GJH4, the steeper the slope, the stronger the trend.

Money Management:

Personally, I only trade at 1:5 leverage. This allows me to risk up to 2% of my trading capital without significant loss to my account. Furthermore, I average cost my entry to allow greater room for entry errors. For example, with a $10,000 account, I will only trade 0.5 lots total at any given trade. I enter the market with 0.25 lots and place a limit order 20 pips away from previous order. The stop-loss for both orders would be the same and set at 2% of account balance (which would be $200 in this case). My take profit is usually based on previous highs/lows or support/resistance levels. Furthermore, when entering a trade, I look for at least 1:2 risk to reward ratio.

Exit Strategies:

Specifying a single exit strategy I consider is a futile exercise and thus I utilize an arsenal of exit methods. Each method is used at a specific situation which only I deem is appropriate depending on my position, time of day, time of week, news releases, etc. Only you can determine which method suites your trading most appropriately. Below is a list of those methods:

1) Set account %
2) Set point target
3) Time of day or week (e.g. close at end of day or close at end of week)
4) Previous Highs/Lows
5) Trend-line support/resistance
6) Fibonacci support/resistance
7) Reverse signal
8) News release time

Please note that this list is not exhaustive, but those are the methods that I employ.

Important Trading Tips:

1) Resist the urge to catch bottoms and tops
2) A safer entry is on pull back, hesitation points, or MACD divergence
3) Do not trade on anticipation, only facts
4) Indicators on higher time-frames supersede indicators on lower time-frames
5) Do not over-trade, wait for setups, you may not, and most likely will not, have a trade everyday.


Further Development:

I have recently been tinkering with the application of Fibonacci support and resistance levels in a whole new way to complement this strategy. I don't have more details on it for you at this time, but will do when the time is right.

I hope you found this post easy to understand and follow. If you find any point unclear or require further expansion on the subject please do not hesitate to leave your comments with your questions and I will be happy to revise the post to address them.

Happy trading.

Cheers,

Latest update 6-25-2010: Added exit methods.
Latest update 7-15-2010: Added updated Close_Line indicator

P.S. This post serves the purpose of helping members of this forum to develop their knowledge base and to test new strategies that may fit their trading style. You are free to use this strategy for your own personal use but you are not, under any circumstances, are allowed to hijack or re-package and commercialize or market this strategy for your own gain.

Greetings Members,

I am posting the trade I took today.

Currency pair: EURUSD
Entry time-frame: 1Hr
Trade type: Trend continuation on 1H
Trade Setup: Slow retracement
Entry price: 1.23819
Exit price: 1.23150 (projected Fibonacci support)
Stoploss: 1.24150
Profit: 66.9 Pips
Profit: $6690

Cheers,

Greetings members,

Please review the attached chart showing the Long-term, Medium-term, and Short-term charts that I use.

This is a situation where I am sitting idle waiting for a setup to happen before I jump in.

Long-term trend analysis: Overall inclination - Short

1) Price closed below resistance level (Short)
2) Trigger lines loosing momentum and are closing (Short)
3) Price bouncing off 34 MA (Long)
4) Zerolag MACD crossed to the down side and well above zero line (Short)
5) Cycle indicator started to loose momentum and curve down (Short)

Medium-term trend analysis: Over all inclination - Neutral

1) Price well below resistance level (Short)
2) Trigger lines strong momentum to the down side (Short)
3) Price extended far from 34 MA (Long)
4) Zerlolag MACD crossed to the up side and well below zero line (Long)
5) Cycle indicator with weak momentum and curve down (Flat)

Short-term trend analysis: Over all inclination - Neutral

1) Price at resistance level (Short)
2) Trigger lines consolidated and tight (Flat)
3) Price bouncing off 34 MA (Long)
4) ZerloLag MACD flat with consolidation (Flat)
5) Cycle indicator started to loose momentum and curve down (Short)


Possible scenarios:

1) Long-term trend to continue the impulse wave to the downside with a possible support target at 1.9667
2) Long-term trend to continue the correction wave with a possible target of 1.26037 with divergence on ZL MACD.
3) Medium-term trend to retest price level 1.23168 before continuing down (ideal for entry and could confirm scenario 1 above) for a possible target of 1.21539
4) Medium-term trend to close above 1.23168 with a potential target of 1.24538, then 1.26037.
5) Short-term trend is irrelevant at this point since Long-term and Medium-term trends are not in sync.

My instinct tells me that the EURUSD will continue its dive for a potential target of 1.9667, but we don't trade on instinct and so I will wait for my setups to happen (closed)

Please note that I am not providing recommendations to act on, I am simply sharing with you my personal opinion on what I think will happen. I could be wrong and I have been wrong in the past, so make sure to make your own analysis as well.(nerd)

Cheers,

Looks nice mate, mind uploading the template.

Here you go!

Cheers

Pip_Fx, great thread!

I don't mean to offend anybody, but you explained your system MUCH BETTER than ANY forexfactory's topic-starter!

Thank you very much!

It looks very interesting, I'm going to download your indicators and template and start using your system on demo M-15, H-1 and H-4.

I have a question. Your statement shows that you trade mostly EURUSD and GBPUSD. Have you ever tried other pairs? Something like GBPJPY and EURJPY?

Pip_Fx, I'm sorry for bothering you, but I downloaded everything you provided and the chart doesn't show the Triggerlines2. What did I do wrong? When I go to the Indicators List, the List shows 4 indicators, including the Triggerlines2...

Here's my chart

great system !!! subscribing to it

Hello Fokusnik,

First off, I am humbled by your kind remarks. Thank you.

Theoretically the system could be applied to all pairs since the basic concept is universal. I happen to have an affinity for EURUSD, GBPUSD, and Gold. I played with stocks too and the system proved useful their too.

Trade the pair you are familiar with most that would be my advice.

To your success,


Pip

Ahhh...I know what the problem is. I missed one important indicator to upload. It is attached it to the original post. My apologies.

Cheers,

Thanks Roundrock. I hope you benefit from it.

Pip_Fx, thank you for your explanation about the pairs.

I downloaded the last indicator and now everything works just fine. Thank you!

Hii looks nice but what are the lines you drew in the chart horizontal line
could you explain that too?

hhii
how can we get pipmasterpro indicator . the most advance fib price level indicator?

Hello Hoichoi

The lines are Fibonacci price projections. It is a new indicator that I have been tinkering with. It is not available to the public yet. That is all I would say on the matter at this point.

With that said however, you can use the native Retracement and Expansion indicators in MT4 to determine most immediate and relevant Fibonacci price levels to use as stop loss and profit targets. I certainly did so for a while and indicated that in the original strategy post.

The use of the Fibonacci projections is an advanced step for the trading method. The strategy as per my description is usable and I have been using it for the past 6 months plus without the indicator in question. I am just starting to incorporate the indicator into the strategy so I have no details to report.

Cheers,

Please refer to my previous post.

Hello Everyone,

Going forward I will post trades using standard Fibonacci projections that are native to the MT4 platform. This will help you understand how Fibonacci can be incorporated into the strategy.

Fibonacci projections is not the only thing you can use, you can use trend lines, set profit %, pip count, previous highs/lows or other methods at your disposal to define stop-loss and profit target. The idea here is that I am presenting you with the method; you need to make it into a system that fits your personality.

Cheers,

Hi and thanks for this interesting thread. One question please: is there a difference between the Triggerlines and Triggerlines2 indicators?

If this is the case then Triggerslines2 indicator was not attached to the thread.

John from Durban

Hello John,

Thank you for pointing this out, yes there is a small variation in the calculation. I use Triggerlines2. I have updated the initial post accordingly. Again, thank you for pointing that out.

Cheers,