Price is Everything (Long Term and Semi-Auto Edition)

I am starting this thread to talk about long term supply and demand zones (at least H4 but preferably D1 or W1). I like to see some sort of daily PA confirmation (i.e., pin bar or momentum candle) before I enter. My method of entry will be via the attached EA.

The EA works like this:

1. Place it on a chart
2. Choose only one of green or red rat (green = bullish and red = bearish).
3. Once a direction is chosen (i.e., bearish), the EA will wait for the high of the day, wait for a bearish close, and enter via sell stop at the low of the bearish close.

Pros: This happens on M5, M15, M30, H1, and H4 TF candles. So if you have chosen wisely, you will have 5 entries in relatively good positions compared to the daily close. If the trend continues over more than one day or there is a big momentum bar, then you roll in significant unrealized gains.

Cons: The EA basically searches for the daily high/low until it finally gets it right or until you have decided that the chosen direction is incorrect. This leads to drawdowns. For instance, it might take 500-800 pips over multiple currencies before you catch a few correctly.

Conclusion: Despite these drawdowns while searching for the daily high/low, if you are correct in picking direction and there is some momentum, the gains will far offset your losses. And this EA is perfect for those who cannot stare at the computer due to work or other commitment.

So I have attached the EA and all the other files that must be included in expert/files. You should not need to change settings. I currently use 0.1 lots for $25k account.

Ideally, I would like us all to collaborate on which setups provide the right entries for this EA. I generally use supply/demand zones with PA and momentum candles as confirmation.

Check my signature for current performance of this EA.

The EA is currently trading two pairs for me. I have currently gains 700+ pips in unrealized gains (that does not count the pips lost in searching for these entries).

This is EURJPY. It already touched supply zone and showed bearish momentum candle. I started the EA today after I saw retracement. The target is nice and far away. I don't know if I will have the balls to keep it until then though.

http://i51.tinypic.com/90yrzt.gif

This is EURCHF. It also hit supply. I got into this one a little late. But I am hoping that it goes past the first demand zone that I marked. I will be careful not to take any losses

http://i53.tinypic.com/omn49.gif

I wussed out and placed my stop (i.e., purple line) a little too close to the action. So instead of being significantly in profit. I was taken out at around BE.

http://i53.tinypic.com/1057eaw.gif

The second pair I have this EA trading is doing well. Right now, up over 700 pips.

http://i51.tinypic.com/15gs9km.gif

does your EA works intraday, scanning for the high and low?

Yes place it on a chart and it will look for the daily high or low before entering. If you want to start mid-day (i.e., you think price will move relatively soon), then you can change the start time to make the EA believe the day started later (i.e., 15:00 rather than at 0:00).

This is still a rather rudimentary tool. But if you don't have the time to watch the screen all day (due to work or sleep) but you have targets in mind and expect momentum soon, then use this. Please keep in mind that you are looking for LT targets.

Hello newark18,

looks good, is it possible to just possible identify the demand and supply zones and draw it out and we excute manually?

Not sure of your question. I manually draw my zones and then I wait for some sort of confirmation on direction when prices reach those zones. Once I get that confirmation, I place the EA on the chart.

oh, i was hoping that your indicator can identify the proable supply and demand zone. so we still need to manaully identify and draw the supply and demand zones, then use your EA right

The second half of this week was down. I searched for long term trades with some momentum. I found two more (in addition to the ones I carried over from last week). I played it a bit scared as I was more manually intensive because I was scared to give back what I earned this week. That made me breakeven essentially instead of making at least 1,500 pips. Then I kinda took aggressive trades to make up for that. I lost a ton of pips with that crap.

So after making around 6,000 pips since the end of last week and early this week, I only made 4,000. I still can't figure out if I am getting lucky with my long term directional calls or whether this is a good system so long as you can trade LT supply and demand zones.

This may sound like tons of pips, but it might take me 500-1500 pips to find 2 or 3 positions that may net me a total of 4-6,000 pips. So it is really 1:8 risk/reward.

I will start experimenting with: (1) playing both sides of the market after you see a period of prolonged consolidation (this EA has shown that it has the ability to generate increased equity even if I played both sides of the market. all you need is one direction with some momentum), (2) and increasing my risk while trying to be more picky with calls (much easier said than one for me).

Anyway, I hope some people can benefit from this. All you need to see is the direction and this EA will help you find the entries.

I am having a down week as I did not pull the trigger on some exits after significant momentum. On the bright side, trading both sides of the market seems like a good strategy provided that you can time a breakout.

Hi there,

A few questions:

Have you tried running the Rat on the strategy tester?

What, in a nutshell, makes this better the Snowball ea?

Will there be a version that runs both directions available anytime?

Many thanks.

Yes I have tested on strategy tester trading both directions. It depends on the pair but some pairs go deep into profit but eventually lose it because there is no TP functionality.

The EA right now can trade in both directions.

I don't know if this is better than the snowball EA. I guess I need to test that more. This is for larger TFs I think. But I think it is your preference on what you like more. Snowball is the anti-grid. Rat is takes smaller bites at extremes and hopes for momentum in the right direction. Once in position, your entries will not get stopped out unless there is a new daily high/low set. With snowball, a mild retrace can take out some entries.

As for my testing, I think I need to restart even though I am in good profit in one instance. I need to be extremely selective in one and trade both sides in the other. Right now, I am mixing things up and that is not what I think I should be doing.

In the past two days, the EA took some time to find good positions and they went into good profit but I didn't TP. Now they have retraced all the way back. I didn't think we hit the supply and demand zones. Once I get some really good momentum I really need to consider closing out at least some of my position.

I wish there was a way to backtest this strategy better. This is mostly manual so I can't really use MT4.

Does anyone want to help me make a shorter term version where we can use H1 or H4 supply and demand zones for entries? Please?

Interesting thread - keep up the good work & I am sure The Rat will get noticed soon ....

Thanks. It means a lot especially coming from you.

This is what happened with EJ. Two good days of momentum...signficantly in profit but I got greedy. I need to take some profit next time. When there is this much momentum, the likelihood of continuation is...well, not likely.

http://i53.tinypic.com/rigaq0.gif

Bulllish engulfing rejection of demand zone? Green rat is on.

http://i55.tinypic.com/2dumi5w.gif

I have stopped testing as I noticed some entry issues. I will get that fixed first and start again.

The reason why I stopped testing is because the entries were off and thus hurting profitability. Let's say that we played both sides of the market. At the end of the day, there should be at least 5 entries in the direction of profit (i.e., 5 buy entries at close to the low of the day if the D1 candle was bullish). Right now, the EA is missing some entries so that only 3-4 entries are made in the direction of profit. These errors are reducing the leverage of positions that are in the direction of profit which defeats the purpose of this concept.

The reason why trading both directions work is this. For example, once the daily direction is determined (i.e. bullish), you have 5 buy entries at relatively good prices in the direction of profit. The EA will continue to make sell entries when prices reach the high of the day. But it will test with one entry so if price continues to move up then you have 5 orders to 1 on your favor. If it is a reversal, then sell entries build up and you have your position for the run down.

The real profit is when you can hold your positions over a few days and the daily chart moves in one direction. The amount of unrealized gains is unreal. Like I said, I've backtested a similar version to this (one that makes all the entries) and more often than not, the EA piles up unrealized gains after a certain point. But since there is no TP function, profits deteriorate.

I have an idea for TP and am discussing it with some people. I hope one of them take me up on it because I think it can be a good one.