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MA Crossover System that works for me

  • #701
  • Apr 27, 2023 4:01pm Apr 27, 2023 4:01pm
Let me share this potential trade with you, all comments welcome. I am looking at the USD/CHF, there has been a long downtrend and I believe there might be a reversal now. Below is the 4-hour chart. Watch all the bearish crossovers that we've had. Each time there was a clear path downwards. You can see it better when you put the MA somewhat sharper, in the second image. In the previous crossovers the price never recovered above the crossover, this time we already had the bullish crossover, the price has come higher than the previous bearish crossover and we currently have 2 pullback candles. As you can see I have place an order to buy just above the last pullback candle. To me this looks like a potential nice trade!
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  • #702
  • Apr 28, 2023 12:24am Apr 28, 2023 12:24am
Quoting Uru-trader
Let me share this potential trade with you, all comments welcome. I am looking at the USD/CHF, there has been a long downtrend and I believe there might be a reversal now. Below is the 4-hour chart. Watch all the bearish crossovers that we've had. Each time there was a clear path downwards. You can see it better when you put the MA somewhat sharper, in the second image. In the previous crossovers the price never recovered above the crossover, this time we already had the bullish crossover, the price has come higher than the previous bearish crossover...
a) you can do what you want
b) the trade may work out for you as anything can happen
c) FOMO tends to have disastrous consequences
d) for a trend reversal (from down to up) trade I would look for 2 things:
1. a higher high (which means a clear break of structure)
2. a higher low
as far as I can see we have neither on your chart (+ price is below MA)
  • #703
  • Apr 28, 2023 1:29am Apr 28, 2023 1:29am
Moving averages was in my early days always on my charts. In the last years i can do it without it, means not they can not help!
I will put some thoughts here using moving averages.
First as here shared do not clutter the chart with countless averages. Two will for sure enough. Now look what you will trade, what is your focus? Will you trade the high timeframes H4 and above? Will you trade fast the M1? What pair you wil trade? Watch for settings that suit the pair, what has the moving averages done in the past?
Moving averages work good if they first move! Many new trader out have trouble using it wise, want pick up the cross and let not doing first the move. So the result is, they search for the golden setting over and over again or cut using it at all. Waiting is the hard point and sometimes it must be learned.
Now to a example. If we can wait for consolidation first, we can also wait for a move. If we done this part good, we have the strength to wait for correction and wait further for the entry. All these waiting, huuh ...

It was M1 and the averages i use here are the SMA 20 & 60

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Perfection is the enemy of good enough!
  • #704
  • Apr 28, 2023 2:25am Apr 28, 2023 2:25am
This trade shows something that I have long noticed and walvekarraje (who occasionally visits here) has pointed out often - price often pulls back after a breakout and that's a good place to enter.

I saw that the 8 and 21 EMAs and the price bars had all crossed below the 100 EMA. That was my signal to look for an entry. But price was already stretched away from the EMAs and it was not a good place. So I waited for that pullback and entered yesterday at the base of that not-quite-pinbar. Now it's in profit and I'm happy (for now).
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  • #705
  • Apr 28, 2023 6:58am Apr 28, 2023 6:58am
WTI trade setup. 3rd April gap closed. Hope to sell WTI, if it breaks out of the consolidation area & move to the down side.

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All the best.
  • #706
  • Apr 28, 2023 7:02am Apr 28, 2023 7:02am
Took advantage of weak Yen today & bought CadJpy & AudJpy pairs.

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Bless the pips.
  • #707
  • Apr 28, 2023 9:19am Apr 28, 2023 9:19am
This seems to be happening like clockwork - cross below/above the 100 EMA, wait for consolidation (if there is consolidation) and then the breakout. I moved up the target up, given that it is Friday and that there have been 3 explosive candles - I don't want to enure any pullback at this stage.
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  • #708
  • Apr 28, 2023 9:24am Apr 28, 2023 9:24am
Likewise the AUDCAD trade I posted about earlier, moved the target up to a logical position as I want to close the trade today.
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  • #709
  • Apr 28, 2023 9:27am Apr 28, 2023 9:27am
Quoting Uru-trader
Let me share this potential trade with you, all comments welcome. I am looking at the USD/CHF, there has been a long downtrend and I believe there might be a reversal now. Below is the 4-hour chart. Watch all the bearish crossovers that we've had. Each time there was a clear path downwards. You can see it better when you put the MA somewhat sharper, in the second image. In the previous crossovers the price never recovered above the crossover, this time we already had the bullish crossover, the price has come higher than the previous bearish crossover...
Okay, trade triggered and I got stopped out ... My S/L was too tight OR my vision was wrong? I still remain with my impression that there will be a reversal, but my mistake here was probably not to wait for a more convincing signal. I usually only sell when price is under MA 100 and buy when over MA 100, so this was against my own rules. Always try to learn a lesson from your mistakes!
  • #710
  • Apr 28, 2023 9:45am Apr 28, 2023 9:45am
Quoting Uru-trader
{quote} Okay, trade triggered and I got stopped out ... My S/L was too tight OR my vision was wrong? I still remain with my impression that there will be a reversal, but my mistake here was probably not to wait for a more convincing signal. I usually only sell when price is under MA 100 and buy when over MA 100, so this was against my own rules. Always try to learn a lesson from your mistakes!
Well done for taking this loss on the nose and wanting to learn from it!

I agree with josi - this is still a downtrend. And (although it is easy in hindsight), price on H4 was rejected repeatedly by the 100 EMA, emphasising that although this could have become a reversal, the more logical and dominant price action result happened.

Did you look at the daily to get a sense of the dominant trend? This is clearly still bearish. I think the thing to learn (apart from just following the rules !) is that we must behave a bit more like machines - don't allow emotions or wishful thinking to create truths that don't exist. And I'm pointing at myself as much as anywhere else here. It's amazing how we as humans see patterns all over the place and persuade ourselves that we are seeing something meaningful.

Here's the USDCHF daily chart.
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  • #711
  • Apr 28, 2023 12:56pm Apr 28, 2023 12:56pm
Quoting Erebus
{quote} Ларри Вильямс был сторонником 9-ЕМА и 21-ЕМА и включил цену закрытия в стратегию
Hello, can you please share this indicator?
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  • #712
  • Apr 29, 2023 3:02am Apr 29, 2023 3:02am
Im waiting for the momentum in H4 candle to breakout higher high in USD/CHF when its pullback to the nearest EMA in H4 ill take entry for long .
Full h4 candle close with momentum might be the early hint for reversal .anyway ill always set 30 pips stop loss and 90 pips TP .break even 50 pips .
And ill let the market decide .

For now i just wait for the confirmation
if it still consolidate i dont take the trade .
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  • #713
  • Apr 29, 2023 7:25am Apr 29, 2023 7:25am
Quoting AlistairC
{quote} Well done for taking this loss on the nose and wanting to learn from it! I agree with josi - this is still a downtrend. And (although it is easy in hindsight), price on H4 was rejected repeatedly by the 100 EMA, emphasising that although this could have become a reversal, the more logical and dominant price action result happened. Did you look at the daily to get a sense of the dominant trend? This is clearly still bearish. I think the thing to learn (apart from just following the rules !) is that we must behave...
I certainly agree with everything you say, just this thought: where's the difference between 'wishful thinking' and 'researching', I still believe that there will be a trend reversal on this currency pair, the 4h chart to me clearly shows it is bottoming out, I will be following this closely, but YES, this trade was in fact following what ons 'thinks' will happen before the real 'signal' is there. I will now wait for the price to go above the 100 MA and maybe give it another try. Fortunately I was able to close my open trade on gold with a profit so as to compensate this one. You win some, you loose some ... Thx for all the good advice, this thread to me is really worth gold!!
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  • #714
  • Apr 29, 2023 8:16am Apr 29, 2023 8:16am
Quoting Uru-trader
{quote} where's the difference between 'wishful thinking' and 'researching', I still believe that there will be a trend reversal on this currency pair, the 4h chart to me clearly shows it is bottoming out...
To put it simply:
the difference is that in the case of "wishful thinking" you do not have a real, physical signal on the chart,
whereas in analysis you do (and act only after this was established).
As I wrote: the secure (non-gambling) way to consider is:
a) wait for a higher high (break of structure)
b) wait for a higher low (and enter after this was established)
[buy low vs sell high]
  • #715
  • Apr 29, 2023 10:26am Apr 29, 2023 10:26am
Quoting josi
{quote} To put it simply: the difference is that in the case of "wishful thinking" you do not have a real, physical signal on the chart, whereas in analysis you do (and act only after this was established). As I wrote: the secure (non-gambling) way to consider is: a) wait for a higher high (break of structure) b) wait for a higher low (and enter after this was established) [buy low vs sell high]
Josi, I understand, this was my mistake, the 'signal' should be there to confirm. I do think it is worth trying to learn to 'read' a chart just visually. I will be watching the USD/CHF chart keeping your advice in mind + my impression of the trend reversal, which I try to make visible, e.g in the chart hereunder. I notice that RSI is also above 50. Let's see if it breaks through the channel to continue down or whether it touches the bottom of the channel and goes up going above the MA 100.
At this moment I find it quite hard to spot opportunities just based on the MA crossover with retracements, if you can spot movements that seem to be forming and focus on these charts to apply the crossover system, it might be easier? For instance, looking at the USD/CAD, the current retracement 'looks' like it might go down a lot further based on the past down movements when you look at the 4h chart (second chart) zoomed out, just like the USD/CHF it might turn underneath the MA 100 (+ RSI lower than 50). As a final one: when I look at EUR/JPY I only see the price going up since the bullish crossover, it seems overbought but I have not traded it because I just don't see the signal, I am missing out on a nice trend move upwards, perhaps I look at this graph the wrong way?
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  • #716
  • Apr 29, 2023 11:58am Apr 29, 2023 11:58am
Quoting Uru-trader
{quote} Josi, I understand, this was my mistake, the 'signal' should be there to confirm. I do think it is worth trying to learn to 'read' a chart just visually. I will be watching the USD/CHF chart keeping your advice in mind + my impression of the trend reversal, which I try to make visible, e.g in the chart hereunder. I notice that RSI is also above 50. Let's see if it breaks through the channel to continue down or whether it touches the bottom of the channel and goes up going above the MA 100. At this moment I find it quite hard to spot opportunities...
Thanks for your good questions, very helpful to all of us. And I'm looking forward to the discussion that might ensue

We don't use indicators (apart from MAs) on this thread. If you wish to use RSI at home, feel free (although I would suggest you try to wean yourself off it), but please don't include it in any posts here. Reading the charts needs a clear and simple view of price action, so you will make life easier for yourself if you remove the grid on your chart.
  • #717
  • Apr 29, 2023 2:52pm Apr 29, 2023 2:52pm
Quoting AlistairC
{quote} Thanks for your good questions, very helpful to all of us. And I'm looking forward to the discussion that might ensue We don't use indicators (apart from MAs) on this thread. If you wish to use RSI at home, feel free (although I would suggest you try to wean yourself off it), but please don't include it in any posts here. Reading the charts needs a clear and simple view of price action, so you will make life easier for yourself if you remove the grid on your chart.
The RSI is not relevant for my questions, I use it personally as an extra confirmation that the trend is up or down, it does not alter the MA crossover system. I use the grid since it makes it somewhat easier to see the price levels at the right hand side compared to the chart at the left. But I will give it a try, I deleted the grid in my charts and will try to use them without! My new way for preparing the week is also based on what you have described some time ago: I have made a selection of charts that look interesting + per chart I have written down whether I shoud look for a buy or a sell + the reasons why (as in the examples I gave). When you quickly go from one chart to another, it's handy to see what your base theory is (but of course to stay flexible if the market thinks differently). I also look forward to the further discussion.
  • #718
  • Apr 30, 2023 4:39am Apr 30, 2023 4:39am
Quoting Uru-trader
{quote} My new way for preparing the week is also based on what you have described some time ago ...
I need to be more careful with my ramblings! Please be aware that, while I have gained experience over the years, I'm by no means an expert and sometimes look back at stuff I have written and hope nobody follows it! But seriously, subject everything to your own common sense test and adopt it only if it fits with your instincts.
  • #719
  • Apr 30, 2023 5:09am Apr 30, 2023 5:09am
To continue with the USDCHF possible reversal discussion, I think it's helpful to distinguish between signs and signals (my own ramblings again, might not be the official way these words are used).

Signs, the way I see it, are ways we get a sense that something is going on, a market shift might be happening, a pair might be bottoming out, perhaps to reverse, and so on. But these are far from being signals. Signals are specific and more objective and tell is that we can go ahead and enter a trade, or be ready to enter soon.

Based on this, I don't believe there are any signals that this pair is about to reverse. But I do see signs that a reversal might be brewing. I went looking for such signs; there are not many, TBH.

I have posted all of these four charts below:
The monthly shows price at an all-time low, bottoming out. This started perhaps about 13 years ago (so we shouldn't hold our breath for the breakout!). But it might mean that the odds are more in favour of a move up than a move down. Unless it moves down from here . In fact, as the three EMAs are now close to each other, it shows consolidation. Another sign is that price has been pushing up against the 100 EMA. For me this is often a sign of a trend weakening, perhaps to reverse. The only action from all of this is to be cautious about selling, but as the scale of the monthly chart is vastly different from that of H4, perhaps it is meaningless for practical daily trading purposes.

The weekly chart seems to be a bit stretched down, perhaps due for a correction, again a possible caution about going short. But it's still very much bearish.

The daily does show a failure to break below the previous low, but otherwise it's clearly bearish.

H4 is interesting. It looks like it has entered a local range, and might stay between those levels a bit longer. But if it is going with the existing momentum, then it's also still bearish until we learn otherwise.

So to conclude this long story, there are signs, weak ones, that a reversal might take place in the future, but no signals to go long whatsoever. To go long josi commented that he will wait for a higher high and a higher low. My approach is to wait until the 8 and 21 EMAs and the price bars have all crossed to the other side of the 100 EMA, and then also to apply my safety checks. In the end these two approaches probably end up being much the same thing.

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  • #720
  • Apr 30, 2023 10:27am Apr 30, 2023 10:27am
Signs yes, signals no, I couldn't agree more! Thanks for this great analysis. I think we agree that we have to be very careful on this pair to go short + if it crosses the 100 MA we might be in for a nice and potentially long trade. Keep this pair on your radar, people. Anyone on my remarks about USD/CAD and EUR/JPY?
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