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MA Crossover System that works for me

  • #61
  • Nov 29, 2022 1:00pm Nov 29, 2022 1:00pm
Quoting AlistairC
I'm enjoying trading with just the MAs, no indicators. I feel free of clutter and confusion and it seems to be helping. Yesterday I made 0.66% profit, so it was an OK day, but today, if a trade I still have running can move the last 10 or so pips to the target, I will bank 3.4% growth on account balance for the day [DONE ]. I'm very happy with that! I've known for a long time that this is the way I should be trading, but I keep being pulled towards other systems, or adding things to the EMAs to try to improve them. This public forum...
Dear Alistar,
Thanks. Sorry for the HA(APB) charts. I do not want to improve your system, because you showed us that is perfect as it is. But I think that your money management is also a crucial point that you are in profit! I will turn off APB chart and only show the price bars and EMAs when I post in the future. I would be more than happy if you keep on posting and show as your trades on charts. We could learn a lot from your experience!
Thanks
Szabolcs
  • #62
  • Nov 29, 2022 1:26pm Nov 29, 2022 1:26pm
Quoting neilpryde
{quote} Dear Alistar, Thanks. Sorry for the HA(APB) charts. I do not want to improve your system, because you showed us that is perfect as it is. But I think that your money management is also a crucial point that you are in profit! I will turn off APB chart and only show the price bars and EMAs when I post in the future. I would be more than happy if you keep on posting and show as your trades on charts. We could learn a lot from your experience! Thanks Szabolcs
Thanks, Szabolcs, I would have posted my trades from today but I was driving a lot and had no time. I placed the trades early this morning and then left them. But I will try to post my trades live.

I received a DM asking about which crossover indicator I am now using. Note that I don't think of this as an "indicator". It is just a visual aid so that I can quickly pick up where the crossovers are while I scan the charts for possible trades.

This is a simple indicator that does only what it is supposed to do. Very importantly, I don't think it repaints. Once the crossover bar has closed, the arrow prints and that's it, it stays there. At least I think so. I spent several hours staring at 1-minute charts yesterday and I didn't see it disappear or shift position once. This is very important for backtesting because you need to see exactly what happened live, otherwise backtesting is misleading.
Attached File(s)
File Type: mq4 2MA_Crossover with alert.mq4   16 KB | 663 downloads
  • #63
  • Nov 29, 2022 1:44pm Nov 29, 2022 1:44pm
Quoting neilpryde
{quote} Dear Alistar, Thanks. Sorry for the HA(APB) charts. I do not want to improve your system, because you showed us that is perfect as it is. But I think that your money management is also a crucial point that you are in profit!
Money management is important, as you say. In my case I have simplified it to a 50 pips move to breakeven (B/E) on all trades and a target of between 100 pips and about 130 pips, depending on which pair it is. Some pairs move more in a day than others. So in my case, money management has been reduced to something simple (and perhaps a bit clumsy or not sophisticated, but it works for me).

But more importantly, with just two MAs, you are forced to use your brain and experience. This is not a rule-based, mechanical system. The closest we get to rules here is "guidelines" or "safety checks". And I think that this feature of it is important - weak and stupid as we humans can be, I still think we are better off NOT having fixed rules to follow because we tend to rely on them and over-trust them, and that makes us properly stupid, or at least, that's my experience.

The steps I follow are:
1. Wait for an MA crossover and try to trade the first leg in the trend, or wait for a refresh and try the second leg. I'm not sure about trading more legs than that. Most trends don't get that far, some do, but overall, we will be better off walking away after the second leg unless it's obvious the trend will continue.
2. Wait for price to pull back in some way or other- inside bar, two-bar pullback, outside bar, or a "refresh" - all of these represent either a simple pause or a multi-bar retracement
3. Decide if this is a valid trade by applying the safety checks
4. Place a stop order not too close to where price currently is in case it triggers your trade and then keeps pulling back and back and back.
5. Manage your trade, which means different things to different traders based on your personal style.

I think that's about it.
  • #64
  • Nov 30, 2022 12:45am Nov 30, 2022 12:45am
Here's a trade I won't be taking, not yet.

H4 has crossed down and is sitting in a small consolidation zone. Breakouts from such zones can be explosive and profitable.

But ... it is sitting on a local support level. This isn't a big issue - just wait until it breaks below. But ... the daily chart shows a clear uptrend and this pullback might soon end as price resumes its bullish move. So it has potential, but we must wait and see what happens next.

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  • #65
  • Nov 30, 2022 1:13am Nov 30, 2022 1:13am
Here's a more promising option, also a GBP trade.

On H4 that small pinbar would have made a useful place to enter, but I missed it. Next is not to have a sell stop order triggered too soon, so a sell stop order below the small consolidation zone makes sense.

Is the dominant trend down? The daily chart shows a sloping bearish channel, so yes, I think it is. There's about 300 pips from the proposed sell stop level to the lower channel boundary, so no problems there.

Should I go for it?

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  • #66
  • Nov 30, 2022 1:36am Nov 30, 2022 1:36am
Quoting AlistairC
Here's a more promising option, also a GBP trade.
Of course, it may work out - and easily, too.
At the same time, I think, we are where we were with USDCAD a few days ago:
an area of strong resistance at which price could easily move both ways.
(So, once again, very interesting to see what will happen.)
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  • #67
  • Nov 30, 2022 1:54am Nov 30, 2022 1:54am
Quoting josi
{quote} Of course, it may work out - and easily, too. At the same time, I think, we are where we were with USDCAD a few days ago: an area of strong resistance at which price could easily move both ways. (So, once again, very interesting to see what will happen.) {image}
I hadn't noticed that upward sloping trend line. So perhaps we need to wait for price to break below local support and that trend line.
  • #68
  • Edited 4:26am Nov 30, 2022 3:13am | Edited 4:26am
Quoting AlistairC
{quote} I hadn't noticed that upward sloping trend line. So perhaps we need to wait for price to break below local support and that trend line.
Good call josi!

This highlights the saying "I would rather be out of a good trade wishing I was in, than in a bad trade wishing I was out". Preserving capital is almost as important as making it. So it is important to avoid traps like this example. Also, if you are trailing your stop order behind a pullback, don't be in a hurry to get it triggered. It's better to hang back and let price come to you when it finally does resume with the dominant trend. Rather lose a few pips near the beginning than go into loss, perhaps to be stopped out.

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  • #69
  • Nov 30, 2022 5:43am Nov 30, 2022 5:43am
AlistairC

Have you tried using your method on indices such as the Dow or Nasdaq or maybe the Dax? It's just that they tend to trend better than FX, plus by their very nature, they have an overall long bias on the higher time-frames
  • #70
  • Nov 30, 2022 6:19am Nov 30, 2022 6:19am
Quoting rover99x
AlistairC Have you tried using your method on indices such as the Dow or Nasdaq or maybe the Dax? It's just that they tend to trend better than FX, plus by their very nature, they have an overall long bias on the higher time-frames
Not much. It's probably just the familiarity of forex. I'm familiar with the behaviours of forex pairs and the scale of numbers they have. By that I mean that a lot size of 0.20 is a known quantity across most pairs, I just know if that is "big" or "small", but the same lot size on some of the indices or other instruments might cause my laptop to catch fire. My 50 pip standard move to B/E is a bit uneven across different currency pairs, but it mostly does what I want it to. With the DAX40, 50 pips (actually, I don't even know if something like the DAX has pips, or what the equivalent might be!). But 50 of those things is probably miniscule. So I tend to avoid those instruments because there's just too much to trip me up.

On reflection, it is probably the less "trendy" behaviour of forex that has moved me in the direction of short-term trading. Having said all that, what is your experience of those instruments?
  • #71
  • Nov 30, 2022 8:26am Nov 30, 2022 8:26am
Quoting AlistairC
{quote} Not much. It's probably just the familiarity of forex. I'm familiar with the behaviours of forex pairs and the scale of numbers they have. By that I mean that a lot size of 0.20 is a known quantity across most pairs, I just know if that is "big" or "small", but the same lot size on some of the indices or other instruments might cause my laptop to catch fire. My 50 pip standard move to B/E is a bit uneven across different currency pairs, but it mostly does what I want it to. With the DAX40, 50 pips (actually, I don't even know if something...
I have traded the Dow, sometimes the Nasdaq and occasionally the Dax (but that can be a bit wild sometimes). You just have to be aware of the index's cash market open times, that's all really. But I trade the daily mainly, due to ill health where I can't look at a screen for long periods!
CFDs have really opened up all futures markets to the retail punter so you don't need expensive futures exchange accounts. I have traded Oil and Natural Gas as well as Indices for a period of time, daily trends can set-up and last many weeks in these market. It's just getting in at the right time is the key and I've not perfected that yet, hence that's why I've expressed an interest in your method.
I'm also experimenting with other markets, Cotton, Orange Juice (but that can be a thin market), Corn and Coffee. These markets are very seasonal, growing and harvesting, but their daily trends can be great.
I'll post up some charts if you like
  • #72
  • Nov 30, 2022 1:04pm Nov 30, 2022 1:04pm
Quoting rover99x
{quote} I have traded the Dow, sometimes the Nasdaq and occasionally the Dax (but that can be a bit wild sometimes). You just have to be aware of the index's cash market open times, that's all really. But I trade the daily mainly, due to ill health where I can't look at a screen for long periods! CFDs have really opened up all futures markets to the retail punter so you don't need expensive futures exchange accounts. I have traded Oil and Natural Gas as well as Indices for a period of time, daily trends can set-up and last many weeks in these market....
Thanks for this. Yes, please do post some charts. Are you able to do this with just 2 MAs showing?
  • #73
  • Nov 30, 2022 1:07pm Nov 30, 2022 1:07pm
It's been an interesting two days. Yesterday I made 3.6% profit on account balance, which is a very good result. Today I couldn't find a single trade that satisfied our requirements. Well, the one, but josi put a stop to that, thankfully! So let's say I had a good day today because I didn't lose a cent.
  • #74
  • Dec 1, 2022 12:07am Dec 1, 2022 12:07am
I have been expecting a breakout and now it has happened. Now we need to wait for a pullback. The weekly shows plenty of space to move down into. This could be a profitable setup to follow down for a long time.

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  • #75
  • Dec 1, 2022 12:16am Dec 1, 2022 12:16am
Quoting josi
{quote} Of course, it may work out - and easily, too. At the same time, I think, we are where we were with USDCAD a few days ago: an area of strong resistance at which price could easily move both ways. (So, once again, very interesting to see what will happen.) {image}
Yesterday josi warned us about this trend line. Now we have broken though that area with an explosive move down. As with the previous post for USDJPY, we must now wait for a pulback to the MAs, ideally right to the MAs, but an inside bar, two-bar pullback or outside bar setup will also do, as long as we don't go chasing price and get triggered too early.

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  • #76
  • Dec 1, 2022 12:23am Dec 1, 2022 12:23am
This a strong resistance level at an extreme high level. I'm not going to be buying any time soon and will wait for a good sell signal to present itself.

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  • #77
  • Dec 1, 2022 2:13am Dec 1, 2022 2:13am
Finally, something that looks like a decent trade, and even so, it's not perfect.

I saw the consolidation area forming and was expecting a breakout from that area sooner or later. Then the inside bar (IB) setup formed and I decided to go for it. Next minute it had exploded, right on cue.

But there's a clear support level (see daily chart). As it is 50 pips down I thought the risk was worth it because at that level my stop will move to B/E. At worst I make nothing, if not, I make a profit. It might even be worth taking profit at 50 pips.

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  • #78
  • Dec 1, 2022 6:18am Dec 1, 2022 6:18am
Quoting AlistairC
Finally, something that looks like a decent trade, and even so, it's not perfect. I saw the consolidation area forming and was expecting a breakout from that area sooner or later. Then the inside bar (IB) setup formed and I decided to go for it. Next minute it had exploded, right on cue. But there's a clear support level (see daily chart). As it is 50 pips down I thought the risk was worth it because at that level my stop will move to B/E. At worst I make nothing, if not, I make a profit. It might even be worth taking profit at 50 pips. {image}{image}...
I moved my TP to that support level and it has just reached the target. That plus another small trade that I closed earlier this morning give me just over 2% return for the day. I'm going to take the rest of the day off.
  • #79
  • Dec 1, 2022 6:26am Dec 1, 2022 6:26am
Quoting AlistairC
{quote} Thanks for this. Yes, please do post some charts. Are you able to do this with just 2 MAs showing?
Hi Alistair
Here's a daily chart on the Dow30 using Tradingview, I tend to use TV for analysis and MT4 for execution
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  • #80
  • Dec 1, 2022 6:29am Dec 1, 2022 6:29am
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