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MA Crossover System that works for me

  • #121
  • Edited 1:49pm Dec 7, 2022 7:49am | Edited 1:49pm
Quoting AlistairC
{quote} Summarised safety checklist 1. Dominant trend: Not bullish 2. Avoid S/R obstructions:No,there is a resistance level right above the entry 3. Enter when price is close to the EMAs: Partly 4. Avoid long/explosive bars: YES 5. Avoid trading into price extremes: No, not actually, see monthly 6. Beware of "old" trends: Yes,on H4, but ... This wasn't my best trading performance!
This trade where I made the mistake of entering on a new trend before the "dominant" trend (on D1) had shown any signs of reversal, made me think. We encourage entering as close to the crossover as possible, yet in a case like this are we encouraging a bad trading practice? Well, no, because the safety checks take care of that (if we bother to read them ).

So I thought of looking more closely at what a mistake would look like and what a good crossover would look like.

Here is the first H4 crossover after a downtrend. The daily chart chart shows where that crossover took place - it was in a downtrend because the dominant trend had still not started turning. Now scroll down.

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In this next example the first H4 crossover had already taken place to the left of screen and it would have been a mistake to enter then. These four crossovers took place later, AFTER the daily trend had turned. So now we know. Simple really , and yet we keep making mistakes (or I do). Why?

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  • #122
  • Dec 7, 2022 1:43pm Dec 7, 2022 1:43pm
Congrats AlistairC really good thread you got here. Hope to get some charts zoom to share. Today I took 3 trades with your aproach and take 3 TP.
My way to trade is HH HL ot LH LL and add your Moving Averages and can see more clear the trade. Just that, no more tools.
  • #123
  • Dec 7, 2022 1:48pm Dec 7, 2022 1:48pm
Quoting Trinquete
Congrats AlistairC really good thread you got here. Hope to get some charts zoom to share. Today I took 3 trades with your aproach and take 3 TP. My way to trade is HH HL ot LH LL and add your Moving Averages and can see more clear the trade. Just that, no more tools.
Thank you Trinquete, glad to hear you had three good trades today. Please share a chart marked up as you use it.
  • #124
  • Dec 7, 2022 2:08pm Dec 7, 2022 2:08pm
Quoting AlistairC
{quote} I would wait for shorter bars - these ones are too explosive. And it's Friday. During Monday's Asian session at the beginning of trade next week there might be some short bars that form a consolidation zone higher up near the EMAs. That might be a good place to trade out of. But look at the daily chart. There might be a longer H4 pullback than you expect, so be cautious about being caught in a bullish correction. {image}
Remember this? That's how it turned out. A refresh on the daily. Check this chart and then scroll down.
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That's one of the problems we face with trading low number MAs. Minor pullbacks (such as two-bar pullbacks or inside bars) stay more-or-less in line with where price has been moving. But every now and again price retraces well beyond our MAs towards where the 30 or even 60 EMA might be. These will often lead to a stopout and then price resumes with the dominant trend, leaving us stopped out and frustrated. We need to expect these, and knowing that price moves with legs and refreshes really helps because we can (sort of) anticipate them after price has moved steadily for several bars. Also, if price has become extended (moved fast or explosively) then some kind of retracement usually follows. That's how I guessed, successfully this time, that the second refresh might be about to take place.
  • #125
  • Dec 8, 2022 12:18am Dec 8, 2022 12:18am
Quoting AlistairC
{quote}
That's one of the problems we face with trading low number MAs. Minor pullbacks (such as two-bar pullbacks or inside bars) stay more-or-less in line with where price has been moving. But every now and again price retraces well beyond our MAs towards where the 30 or even 60 EMA might be.
One suggestion to solve this problem: use a third MA that emulates the higher TF-MA (in your case D1, I guess). By doing so you can always see (on your trading TF) how price moves relative to the D1-MA.
  • #126
  • Dec 8, 2022 12:39am Dec 8, 2022 12:39am
Quoting josi
{quote} One suggestion to solve this problem: use a third MA that emulates the higher TF-MA (in your case D1, I guess). By doing so you can always see (on your trading TF) how price moves relative to the D1-MA.
It's a good idea, thank you. I have actually been doing that on my "private" charts - the ones I don't post. Seeing those "daily" dashed MAs (48 &126 EMAs) on the H4 chart gives me a "one-glance' view of the dominant trend. But I still find a quick flip up to the real thing is more useful and I do that as soon as a chart looks interesting.

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  • #127
  • Dec 8, 2022 5:25am Dec 8, 2022 5:25am
Nothing much going on. Is anyone else finding decent trades? There are some good setups in places but they are at the end of a long trend and/or up against a S/R level, so they don't qualify.
  • #128
  • Edited 8:52am Dec 8, 2022 7:06am | Edited 8:52am
I did not enter the crossover of the emas, because I wait for the retracement to the HL and the push up. Let's see how this trade turns out.

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In the H1 graph you can see better where I could the TP, for the exit.
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Make a second entry in M5 in the close of the candle marked.

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Edit: Closed manually at...
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I can´t take this one, with this spike, and the price flew far away...
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  • #129
  • Dec 8, 2022 8:39am Dec 8, 2022 8:39am
Quoting Trinquete
I did not enter the crossover of the emas, because I wait for the retracement to the HL and the push up. Let's see how this trade turns out. {image} In the H1 graph you can see better where I could the TP, for the exit. {image} Make a second entry in M5 in the close of the candle marked. {image}
Thanks for posting this. If I understand your first chart correctly (I have reposted it below), you wait until the last H and the last L are both higher than the ones before them and then you look for a buy trade (or vice versa). Have I understood it correctly - you look at just the last two swing points?

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  • #130
  • Dec 8, 2022 8:48am Dec 8, 2022 8:48am
Quoting AlistairC
{quote} Thanks for posting this. If I understand your first chart correctly (I have reposted it below), you wait until the last H and the last L are both higher than the ones before them and then you look for a buy trade (or vice versa). Have I understood it correctly - you look at just the last two swing points? {image}
One thing to keep in mind, maybe, is that his HH (see screenshot) is no HH but a LH, which may indicate weakening momentum.
(I think, as long as the overall bias is up - which it is - one could still enter this riskier trade and exit at high-retest-level, which - by now - price has almost reached.)
  • #131
  • Dec 8, 2022 9:01am Dec 8, 2022 9:01am
Hi AlistairC, my way to see the movement is this one in the chart below....the EMAS can help me to see the right moment to take the trade. Fo me, the Bias is Uptrend, so I enter the trade with more confidence.
EDIT: And try to take the trade in M5.

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Quoting AlistairC
{quote} Thanks for posting this. If I understand your first chart correctly (I have reposted it below), you wait until the last H and the last L are both higher than the ones before them and then you look for a buy trade (or vice versa). Have I understood it correctly - you look at just the last two swing points? {image}
  • #132
  • Edited 11:01am Dec 8, 2022 9:11am | Edited 11:01am
Quoting josi
{quote} One thing to keep in mind, maybe, is that his HH (see screenshot) is no HH but a LH, which may indicate weakening momentum. (I think, as long as the overall bias is up - which it is - one could still enter this riskier trade and exit at high-retest-level, which - by now - price has almost reached.)
I have taken the almost identical trade on GBPUSD! The reason I didn't post it is that it doesn't fulfill all the safety checks. It's already quite an old trend and it is not far from a resistance level, and I didn't want to cause confusion.

I went with the daily trend and not primarily what I saw on H4. If the dominant trend is the driver and it's a good one, then even a weak setup on the lower time frame "should" follow. Does that make sense?
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  • #133
  • Dec 9, 2022 2:48am Dec 9, 2022 2:48am
Quoting AlistairC
{quote} I went with the daily trend and not primarily what I saw on H4. If the dominant trend is the driver and it's a good one, then even a weak setup on the lower time frame "should" follow. Does that make sense? {image}{image}
Here's another example where I took my lead from the dominant trend on D1. The H4 chart is ok but it's a bit "all over the place", so on its own I might not have gone for it. On H4 the first leg and the first big pullback have completed and now we are looking at the second leg, so the PA is promising.

Safety checks: Dominant trend? Yes / S/R obstruction? No / Price close to EMAs? Yes / Avoid explosive bars? Last 4 have been very small / Old trend? No. All OK (hope you agree!)

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  • #134
  • Dec 9, 2022 7:12am Dec 9, 2022 7:12am
Be careful today...

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  • #135
  • Dec 9, 2022 10:22am Dec 9, 2022 10:22am
Quoting Trinquete
Be careful today... {image}
Thanks, and right after the results came out things looked a bit wild. All three came out green. We can look to a bullish USD next week. But as technical traders we don't need to know that - the charts will tell us, and if somehow price doesn't do as the fundamentals predict, we'll know about that too. Just trade what you see.

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  • #136
  • Dec 9, 2022 10:27am Dec 9, 2022 10:27am
It was a funny kind of week, but I'm happy that I made 1.3% profit today. Good thing too, because I ended up at close to B/E for the week.

The main thing I (re-)learned was to trade strictly in line with the dominant trend. Most of the H4 and D1 pairs this week were either not aligned with each other or were at S/R or were "old trends", which I usually ignore.
  • #137
  • Dec 9, 2022 10:38am Dec 9, 2022 10:38am
It's true, sometimes the desire to trade every day fools me a little. To continue looking at the charts and trade according to what we know how to do.

Quoting AlistairC
It was a funny kind of week, but I'm happy that I made 1.3% profit today. Good thing too, because I ended up at close to B/E for the week. The main thing I (re-)learned was to trade strictly in line with the dominant trend. Most of the H4 and D1 pairs this week were either not aligned with each other or were at S/R or were "old trends", which I usually ignore.
  • #138
  • Edited 11:30am Dec 9, 2022 11:05am | Edited 11:30am
Last trade of the week taken in M5. I take it too late, and now is going down.

Edit: SL hit

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  • #139
  • Edited 11:54am Dec 10, 2022 10:31am | Edited 11:54am
This is the sequence that I usually follow when deciding to place a trade. In my case H4 is the trading time-frame and D1 shows the dominant trend.

On the H4 charts:

  1. Is there a new trend after a crossover (= first leg) or a second or perhaps even a third leg starting? (This also means to avoid "old" trends unless PA tells you otherwise).
  2. Are the recent bars (i) on the "trend side" of the EMAs? (ii) mostly short (iii) fairly close to the EMAs (very little or no open space between bars and EMAs)?
  3. Is there any S/R obstruction? I don't mind a consolidation "strip" made up of recent short bars, as long as there is no other S/R level at the same level.

If above all OK, look at the monthly and/or weekly chart:

  1. Is price approaching an extreme level?
  2. If so, make an intelligent (not emotional) decision whether to walk away or proceed
  3. If not, proceed.

If decision is to proceed, look at the daily:

  1. Is the H4 trend aligned with the D1 trend?
  2. Is there any S/R obstruction?

If still OK, you probably have a trade - look at H1 for more detailed info and a possible better entry than is possible on H4. My advice is always to use a stop order in case price continues pulling back across the EMAs and then into a refresh or reversal, which might stop you out.

Good luck!

  • #140
  • Dec 12, 2022 1:33pm Dec 12, 2022 1:33pm
Today trade in H4, I made one before in M5 (with TP hit) but not take the screenshot.

I took this trade because on H4 I saw the double top and the HL... and crossover the EMA´s to go short. Let's see how it develops.

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