One more question do you only take the bounce of the 89 ema most of the time...or any ema bounce...
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DislikedOne more question do you only take the bounce of the 89 ema most of the time...or any ema bounce...Ignored
DislikedSick stuff...what your prefence of time frame....i see you hav 4 hour charts and 1 hour charts...Ignored
DislikedHi SoulTrader,
"if moving averages weren't invented, would it make a difference".
I love your thought provoking questions.
Let me ask (and reply) to a slightly different question.
What do the moving averages do for me?
Nothing more than help me define a trend. Everyone says its easy to see a trend. "If the price on the left of screen is lower than the price on the right, then the trend is up". But I have often struggled with that idea because the the trend changes depending on the length of time (number of bars) you have on your screen.
So - the moving averages are my crutch to mathematically define the direction of the trend. (Which means I am not confident in my ability to look a chart and determine the trend.....fear poking its head through?). I am making no judgement about how right or wrong that is. For example, I have used the 21, 55 and 89 ema - but I have no evidence to say they are any better than 5 8 13 emas or the 200 ema, or if a simple trend line would do.
I think people poo-poo the moving averages as being "historical" and therefore irrelevant. But the same people will then draw a trend line.....from historical numbers......to define the trend. :-)
In a nutshell - the moving averages are used because I am not confident that I can look at a screen and tell the future direction as accurately as I can interpret 3 lines being in the same direction and above or beneath each other.
That's my rambling for the moment - SoulTrader, thanks for stopping by.Ignored
Dislikedtell ya what Stewart - here's an excercise for you for when you are bored....
Find me a moving average between 1 and 300 that price DOESN'T bounce off
The answer will tell a story for youIgnored
DislikedI have not traded this pair before.
Trend is down (emas)
Pull back is sufficient (stoch way up high).
Took the entry - now its out of my control.
(Interesting that I have little confidence in this trade becuase I know nothing of the fundamentals. I have no 'reason' for this to go down further. But in all reality I have little knowledge of anything fundamental about any of the pairs).Ignored
Disliked21 55 and 89 ema on 4 hour are down
same on daily
so trend is down
bearish candle after a pull back
So I'm in (short at 99.84)Ignored
DislikedNice i have question though...it does not bother your entry knowing that ema 21 crossed 55 to go bullish....?
since I enter on pull backs, the 21 will often be pulled back with the price and sometimes cross the 55. I dont mind though - especially if the daily trend is confirming the 4 hour trend.
Another qestion would be what if in the daily you get a cross of the 55 with 21....would that make you look at another currency right
very likely - yes.
However I will sometimes enter on a 4 hour chart (against the daily trend) if it looks like the daily is at an area of support/resistance or a clear pin bar/outside bar, and the 4 hour conditions are met (ie 21<55<89 and stoch at extreme)
If I trade against the daily trend, I will try to time the entry by looking at the 1 hour chart.
DO you ever take trades of the daily chart even if the ema are now against you in the four hour chart?
Not very often. If I saw a great pull back on the daily with an excellent pin bar or outside bar and the stoch was at an extreme, then I would happily enter with a stop at the previous swing.
THE ENTIRE REASON THIS METHODOLOGY WORKS IS BECAUSE TRENDS HAVE A TENDENCY TO CONTINUE, AND ENTERING AT AN EXTREME OF A STOCH TENDS TO GIVE YOU A CHANCE TO MOVE TO BREAK EVEN, EVEN IF THE BIGGER TREND HAS REVERSED. So the losses are small and the potential for big wins is always there.
And last question...would you show me how you would view the gbp/usd starting from the one hour chart and bringing it down all the way to the daily...?
yes - in the coming posts
And whats your stop from start...
I am trying to get into a trend - so I put the stop where I think the trend would have reversed. (So I put it at the previous swing h/l which is almost always within 5 few bars of the entry trigger - or I put it at 2x ATR(100) which is twice the distance that currency would move on average over 100 candles)
Thanks ...sorry for asking so many questions lolIgnored