5/13/62 Ema

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Non topic insults and comments have been removed. The thread is reopened for discussion... Please remember rule #1... thanks very much, Scott

SORRY!

Rob Booker has suggested using the MACD indicator with this system. Does anyone else have a favorite indicator to add to the 5/13/62?

Thanks in advance

I do you use MACD along with this method. Not too sure though what's the correct settings...I'm just using the default...on 1H timeframe...Still trying to understand/learn/grasp more of this method along with MACD...

Use the Default Settings 12,26 and 9. I have read that some people were using other indicators. I will do research and see if I can find out what they are.

Happy Trading!

Thanks for the pm really REALLY nice of you.Tick.Happy trading to you as well!.

The PM was deserving Milk...glad you approved of my suggestions. I have many more ideas if you would like.

Several good trading opportunities coming according to my charts. Watch out for them. I wish you a very profitible trading week ahead.

CTGUY<!-- / message --><!-- sig -->

Good link for the PDF for this system

http://www.robbooker.com/books/5_13_62.pdf#search='rob%20booker%205%2F13%2F62'

CTGUY

According to 5/13/62 rules, whenever EMA 13 crosses below EMA 62, there is a downtrend situation. If you look at my USDCAD screenshot, don't you think it is too late to enter the market (SELL position) at that crosses since the price started to rebounce.

Now I've only just started looking at this system, but...

The system, as described by Rob Booker, requires that once the 13 EMA crosses down over the 62 and has gone around 30 pips past it you are now in a down trend. You don't actually trade until the next TOUCH of the 62 EMA.
You don't trade right at the EMAs crossing if you follow his system. You play any retrace. This allows you to take advantage of a prices tendancy to return to the moving average and gives you a safer entry relative to you stop.

Sometimes it doesn't work out.
In the chart you showed, under his system you would have bought at 1.1250 or so when the price hit the 62 EMA. The stop loss would have been hit 25 pips lower.

The chart below is zoomed out further to show the last few days (And is
also a 1 Hour chart instead of 30-min. Seems a little better for this pair on a quick look.)

The red vertical lines are roughly where a couple of winning trades were. The light blue was roughly where a loss trade was.

The two red short trades were 57 and 70 pips (in a perfect world) and the blue loss trade lost you 25pips. There was also another loss trade I didn't mark just after that 3rd trade. That's 50 pips worth of losses against two potential trades that netted 127 pips.

bundyraider,

I just want to rephrase what you have said for the rules in this case of USDCAD to be sure I am interpreting it right:

 

1. the 13 EMA must cross down the 62 EMA
2. the 13 EMA should be 30 PIPs from the 62 EMA to confirm a downtrend - do not enter
3. the 13 EMA touches the 62 EMA second time - enter trade

when the 13 EMA touches the 62 EMA a second time, do you mean that one can short it just as long the 5 EMA does not cross above the 62 EMA?

Ok, again I've just started looking at this system so I'm not yet 100% , but....

1. the 13 EMA must cross down the 62 EMA

Correct.

1. the 13 EMA should be 30 PIPs from the 62 EMA to confirm a downtrend - do not enter

Correct.

1. the 13 EMA touches the 62 EMA second time - enter trade

Not quite.... Once the above two conditions have been met you can play each time price itself touches the 62 EMA. You don't need to wait for the 13ema to touch. In fact that would probablly be disasterous!!


I was backtesting various ways to play this last night. So far I haven't played with any "Let the profits run" strategy.

If you look at my previous chart, the Orange line is, of course, the 62 EMA. The Pink is the 13 EMA and the Yellow the 5 EMA.
The grey dotted "Halo" lines following the 62 EMA are set at Positive and negative 25, 30, and 34 (a fib).

My notes are a bit vague now that it's the next morning...

...but, for the following strategy I waited till the Pink 13 EMA and Yellow 5 EMA were both over the first line at least. That is, both were at least 25 pips(!!) away from the 62 EMA...

From Oct 1 (GMT) to beginning of Nov 1, there was 17 trades on the 15 Minute chart.

6 - were loosers , loosing 25 pips from entry each, for a total of -150 Pips

10 - were winners that made it to AT THE LEAST the previous high/low (the most recent run down/up to the EMA)

1 - didn't make it to the that previous high/low but hit made it to 39 pips from entry. Technically a looser but by the price action I know I would have saved this one in real time.

The winners totalled +353 pips, not counting that above failure to reach it's high. That total took into account a 3 pip buffer. i.e. If I'd closed the position 3 pips short of the target.

Spread would have been 17 x 5 pips per trade for -85 pips

Totals ....+353 - 150 - 85 = +118.

Not bad when you consider I have let the profits run at all yet, which would make a non-insignificant difference to that end total percentage-wise. It's also ONE month only.
Once I've figured my potential strategy I'll backtest a larger range.

By the way, in my posted chart, the first red line wouldn't have been taken according to the rules I described this last post. The 13EMA hadn't yet made the first dotted line since price had hit the opposite dotted line. (yes, my other rule!)

In fact, now when I look at it again, ALL three of those trades would have been avoided using the above rules!! LOL

EDIT: The middle trade (the blue line) WOULD have been taken., but would be a loser.

I better add to this.

If the 13EMA ever crossed to the other side the current trend was cancelled.
It was also cancelled if price made it to the stop loss line (the opposite sides first dotted line, which was at 25 pips, of course)

I would then wait for the next trend to be confirmed by the 5 and 13 EMAs reaching the 25 Pip mark. Either on the long side or the short side.

This is the original document written by Rob Booker

OK You guys know way more than I do...!! So I don't want to stick my foot in my mouth...

I have been taking Rob Bookers one on one ... I believe he would be more inclined to use 30 S/L

Also, I know everyone has to do their back testing etc.... but also keep in mind that Rob Booker system has been back tested hundreds of times !!!

I wish I had in my budget, the money for xtick... but I do not... I must trust systems already backtested... yeah I know we all trade differently... but I for now have to rely on something already tested and make sure I follow the rules exactly as wrtten for the system.

Ok, sorry to interfere !!!

Great Franoza!

No, you're not intruding at all. All info is a great help. That's what forums are all about.

You've just told us something that may be very useful.

Thanks.

bundyraider

Thanks for clearing the 62 EMA for me.... Do you currently use this strategy to trade?

ET

No, only just began to study it the past few days. I like strategies that play off of MAs and my ears pricked up when it was mentioned.

I'm wanting a system that suits my personality. Systems like this seem to satisfy me. I can imagine eventually using something along these lines as my main system. No doubt a melding with others I've learnt through Jim, Dial, Vegas etc.

It appears to be a reliable and easy strategy that doesn't require TOO much discretion. Intend to do a lot more backtesting.

Franosa's post illustrates already how the same system can give different results for different people no matter how clear the rules. Franoza's suggesting 30pips is what Rob uses. When looking through the GPDUSD 15 Min 25- pips looked good to me. Most of the trade starts for it I had marked fell a good 10 pips short of the mark or more. Higher time frames would require different stops.