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MA Crossover System that works for me

  • #1,201
  • Sep 1, 2023 9:20pm Sep 1, 2023 9:20pm
Quoting AlistairC
{quote} I have been looking at how you use the fibos to set targets. As I mentioned previously it looks very similar to how walvekarraje does it. Could you give me an idea of what your typical target size in pips is on H4?
There's 2 ways of calculating fib projections and they depend on how you draw the fib.

Method 1 - Measuring the Impulse Wave
The standard way would be to draw the fib from the start of the impulse wave at point A at 100% to point B at 0%. Point C would be your retracement. This retracement could coincide with whatever confluence of your liking. S/R, Imbalance, Divergence, Trendline Bounce, Trendline Break. The extra sauce is up to you.

Projected targets (measuring from the 50% retracement)

  1. -27.2% - 62 pips
  2. -38.2% - 72 pips
  3. -61.8% - 94 pips
  4. -100% - 125 pips (aka full extension)

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Method 2 - Measuring the Retracement
This is a more conservative TP approach. Instead of measuring the impulse wave, you measure the correction wave from B at 0% to C at 100% and use fib extensions as targets.

I normally target these 2 fib extensions. Assume we enter at 50% at point C.

  1. 138.2% - 60 pips
  2. 161.8% - 72 pips

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These are more conservative targets and you're working under the assumption that point C will hold as a swing point. More interestingly, you will see price tend to stall at 138.2% and 161.8%. Of course, that's not always the case, but if you draw these fibs, you'll notice price will very often go to these levels to the pip. On multiple time-frames. There's nothing magical about this. I think they are just very common projection targets.

There's nothing fancy about using fibs. They're really just a simple percentages to measure retracements and projections. The underlying concepts are your basic 123 and ABCD patterns. Nothing ground breaking. 8/20 ema serves as a trend filter. You use fibs to set entries, stoplosses and targets.

A simple positive R:R system

  1. Price is trending as shown by 8/20 ema cross over.
  2. Measure a strong impulse wave.

    1. Set limit order at 61.8%
    2. SL at 100%
    3. TP at -38.2%
    4. This will always result in a more than 1:2 RR as long as you trade bigger timeframe

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You can improve on this with candlestick patterns, confluences, etc. The problem here is that strong trends don't tend to retrace to 61.8%. They tend to be shallower at the 38.2%, sometimes not even. And you would need to target further fib extensions in order to yield a positive R:R.

But the concept is simple. Trends and pullbacks.
Leave the Gun, Take the Armani
  • #1,202
  • Sep 6, 2023 9:47am Sep 6, 2023 9:47am
Could this be a turning point in USDCHF currency pair? Price is now above 100 MA on 1D, on the weekly chart we see 8 consecutive week of rising price and breaking the downward trendline of the past 6 months, at what point would you consider this a reversal?
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  • #1,203
  • Edited Sep 7, 2023 2:22am Sep 6, 2023 11:10am | Edited Sep 7, 2023 2:22am
Quoting Uru-trader
Could this be a turning point in USDCHF currency pair? Price is now above 100 MA on 1D, on the weekly chart we see 8 consecutive week of rising price and breaking the downward trendline of the past 6 months, at what point would you consider this a reversal? {image} {image}
That's an interesting question and not easy to answer. One answer I found (from a respected source too!) is that a reversal is a change in the price direction of an asset. Well, thanks for nothing!

It depends on your timeframe. A reversal on a 5 minute chart is just a minor blip on a weekly chart, so we need to look at it within the timeframe we are working with and probably on the next higher TF to confirm.

The most useful definition I have seen is that a reversal is when a pullback keeps moving the other way, to a point where the trader believes it is safe to trade it in the new direction. So when do you feel safe to trade a pullback in the 'wrong' direction? That could be:

  1. when price closes on the other side a trend line (hardly a reversal unless confirmed with something else really solid)
  2. when your preferred MAs have crossed (and should be confirmed with something else depending on whether it is low-number MAs and how many MAs you are using)
  3. when you can see a series of higher highs and higher lows after a downtrend or vice versa (and possibly confirmed with something else)
  4. When the new trend breaks above the most recent swing point in the old trend (confirmation optional).

So has USDCHF reversed? On H4 yes, and yes I would trade it, on D1 it's early days, and my preferred 8/21/100 EMAs have not re-aligned yet, so some might trade this, I am still waiting, on W1, it has crossed the trend line, but has not closed yet so this might become a reversal but it's not 'ripe' yet and we need to wait.

The above is just my ramblings, not an authoritative statement. It would be interesting to hear other people's comments.

  • #1,204
  • Sep 8, 2023 3:05am Sep 8, 2023 3:05am
This has been a topsy turvy week, and mostly very slow-moving. I am ending it with a small profit, but nothing to get excited about. I had one proper loss and two proper wins, but lots of manual closes when the markets seemed to be drifting back and forth, going nowhere.

Eventually I decided to use eurusd-thijs's EA trader (v12) on manual - signal only, to catch potential trades (valid ones using the 3x3 method) without me having to monitor the messy charts. I have scanned all 26 of my charts this morning and not one is fully aligned (I am using M30/H4/D1 currently). They all look something like this.
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Incidentally, I recently asked eurusd-thijs to help me complete an EA (not one that belongs in this thread) that another coder was struggling with, and he has nailed it and improved it significantly. I'm very happy with the quality and speed of his work .
  • #1,205
  • Sep 13, 2023 2:34am Sep 13, 2023 2:34am
Quoting AlistairC
I am currently focussing on just two types of setups. 1. 3-EMAs aligned with D1 trend in agreement. 2. 2-EMAs crossover with D1 trend in agreement.
Some modifications and additions. These are the strategies I am focussing on this week.

1. The 3x3 method using version 12 of eur-thijs's excellent EA, set to manual, so it gives signals but doesn't place trades
2. The "yellow arrow signal" that appears when the 3 EMAs become aligned on H4. I can then check the HTF for trend direction.
3. A new idea, sort of, which is just two EMAs, 8/21 across H4, D1 and W1 using OGT to identify them, call it the 2x3 method if you like! My logic for this is that waiting for just 2 MAs to cross gets me in earlier in a particular trend, but to reduce risk the 8/21 EMAs on D1 and W1 must be in agreement with H4.

I'm not sure if the markets have become more active this week, but I have enjoyed good success with this 2x3 approach so far with 1.5% account growth banked and another similar amount still running, might bank that later today (hoping it doesn't disappear!).
  • #1,206
  • Edited 7:13am Sep 15, 2023 7:01am | Edited 7:13am
Quoting AlistairC
{quote} Some modifications and additions. These are the strategies I am focussing on this week. 1. The 3x3 method using version 12 of eur-thijs's excellent EA, set to manual, so it gives signals but doesn't place trades 2. The "yellow arrow signal" that appears when the 3 EMAs become aligned on H4. I can then check the HTF for trend direction. 3. A new idea, sort of, which is just two EMAs, 8/21 across H4, D1 and W1 using OGT to identify them, call it the 2x3 method if you like! My logic for this is that waiting for just 2 MAs to cross gets me in...
I'm pleased with the way this week has gone. And I think I'm on to something good with option 3 above, the "2x3" method. With the daily and the weekly in alignment with the H4 trading timeframe, it means the force really is with you, so as long as the safety checks are all checked/ticked, then it seems you have a high probability trade going. What it has meant for me is that when there is a pullback after placing the trade, as long as the OGT dashboard or the EMAs Trader EA data window look like the below, then there is less anxiety due to the higher probability of the trade resuming in my favour.

OGT dashboard showing those pairs where the EMAs are all aligned
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EMAs Trader EA window on NZDCAD
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BTW, these two show 3 EMAs even though it's the 2x3 method because both require three EMAs to function, so I'm using 8/21 with 10 added in as a dummy. It has little effect on the result.

If you aren't sure about this, the minus signs (or + if the EMA slope is up) represent the slope of the 3 EMAs on that particular time frame. So in this case, not only are all EMAs crossed down, but the EMA lines themselves are also sloping down.
  • #1,207
  • Sep 15, 2023 8:37am Sep 15, 2023 8:37am
Quoting AlistairC
{quote}
It's totally none of my business and I don't want to interfere at all. Just a caveat (you know already but maybe not all of your readers)
What strikes me is the fact that you seem to confuse causality and correlation. (As most people tend to do in most areas of life etc)
You came up with an adaptation of a running system and had a good week.
And now you think the dashboard(s) you use have been tweaked in such a way that they can be trusted etc.
These dashboards (and EAs) are - as far as I can see - based on MAs.
That means (logically) that - doing what they do, formula-wise - they produce false entry signals during ranges.
A pretty old study once mentioned that markets trend about 30% of the time and are in ranges about 70% of the time.
If that still holds true that means that - on average - 70% of the time your system will be prone to some false signals.
To me that means two things:
a) you cannot trust the dashboard (EA) because some times it will work pretty well (at other times it may be worse than chance, i. e. without an edge)
b) the adage - always trade in the direction of higher TF - isn't wrong as such but will produce pretty late entries (and bad trades, once the trend has ended but the the end isn't as yet signalled by the MAs)
So the way around this dilemma - I think - is to always look at the charts you are trading. If price is clearly in a trend on H4 (HHs and HLs vs LLs and LHs), then it is likely to continue for the time being - and that's it.
  • #1,208
  • Sep 15, 2023 2:25pm Sep 15, 2023 2:25pm
Quoting josi
{quote} It's totally none of my business and I don't want to interfere at all. Just a caveat (you know already but maybe not all of your readers) What strikes me is the fact that you seem to confuse causality and correlation. (As most people tend to do in most areas of life etc) You came up with an adaptation of a running system and had a good week. And now you think the dashboard(s) you use have been tweaked in such a way that they can be trusted etc. These dashboards (and EAs) are - as far as I can see - based on MAs. That means (logically) that...
Hi josi, thanks for this timely reminder. Unfortunately, your critical tone and the fact that you addressed me directly with inferences that I would promote blind acceptance of signals are offensive to me. Perhaps you could have chosen your words more carefully. Next time you "don't want to interfere" in something that is "none of your business" either don't do it, or consider your words more carefully before you do.
  • #1,209
  • Edited 4:21am Sep 16, 2023 2:46am | Edited 4:21am
Quoting AlistairC
{quote} Unfortunately, your critical tone and the fact that you addressed me directly with inferences that I would promote blind acceptance of signals are offensive to me.
Of course, I apologize, if I hurt your feelings.
For some ridiculous reason I still think that the "exchange of ideas" (if a real exchange is intended) first and foremost means criticism of the other person's claims (etc).
For some ridiculous reason I still think that this critical exchange is what threads should be about.
But people who start threads, start them for a reason: they demand praise from their followers (and praise only).
Criticism (of any kind), sadly, makes them feel uncomfortable, under attack, defensive, angry etc.
So really, for them it is about feeling, self-perception etc instead of exchanging arguments.
Maybe it is about time you put me on your ignore list.
  • #1,210
  • Sep 16, 2023 5:48am Sep 16, 2023 5:48am
... one point i gave in the round. Every combination of moving averages do not work on its own. It make a huge difference using averages within further aspects market gave us.
I use nearly same combination for pickung up momentum trades, AFTER i check the "wider" view. What are the psych levels in the near? We ar near a round number? We have "room" for the trade before we got into field of multble interests? Only trade the averages lead often to frustation, lead often to the hunt for the golden settings. The problem is the view. The problem is ignore basic market behaviour. Do not think marekt is wild as a waterfall or vulcane, change the view and you get the clue.
So first get the right place to trade then use averages to finetune entrys. We want moving price for making profit. Averages so near the price is focusing on momentum. Is momentum around every corner? Must momentum go to a preparing stage?
Perfection is the enemy of good enough!
  • #1,211
  • Sep 16, 2023 6:16am Sep 16, 2023 6:16am
Market goes from balance to imbalance and back. Moving averages work pretty good in the phase of imbalance, BUT do a bad job in phase marekt balance. Now you can say i pick a higher average and all is good, price do not touch it. But what have you done? Represents the average now the price action? What will a high average point yet? This is the danger going that way.
Following averages that blind is ignoring the basics. I trade long enough and i have hands down used thousands of combination and hundreds indicators to filter out "false" signals. All these does not the job. The only job that count is to realize that market is build around cause and effect. Cause and effekt. Not build around a mystical combination of averages.
Perfection is the enemy of good enough!
  • #1,212
  • Sep 16, 2023 8:52am Sep 16, 2023 8:52am
trade the timeframe .... not the instrument.
trend is directly related to the timeframe YOU are trading.
first design a strategy/syetem to trade, select any instrument which fits your system in which timeframe. trade the instrument in that timeframe

plan the trade and trade the plan....
  • #1,213
  • Edited 4:47am Sep 18, 2023 4:29am | Edited 4:47am
This is interesting, and what should one do with it?

These two AUD pairs are heading in opposite directions on all three times frames AND the plus/minus signs show that the EMAs themselves are also sloping in the opposite directions, without exception. (This is using the 2x3 method - but with 8/10/21 EMAs, which is as close as I can get this to a standard 8/21 crossover setup). I suppose the official answer is to examine each one carefully, go through all the safety checks and if they pass all the checks, then trade them. I would still feel anxious about doing that, like I would be guaranteeing one will be a loser. Comments?

AUDCAD
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AUDNZD
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  • #1,214
  • Sep 18, 2023 6:04am Sep 18, 2023 6:04am
I would take a look at NZDCAD if I had to make a decision abt which one to trade and in which direction.
  • #1,215
  • Sep 18, 2023 6:51am Sep 18, 2023 6:51am
We have a "pinch" on AUDUSD H4 where the EMAs are all close to each other, basically a consolidation. Breakouts from consolidation are very common, so we can expect a breakout at some stage. The trick is to catch it. One option is to place a stop order above/below (or both) of the consolidation, well out of reach of any false breaks. Another is to wait for the usual pullback and then enter. We don't know which way it will break, but as D1, W1 and MN1 are all bearish, my money is on a break downward.
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  • #1,216
  • Sep 18, 2023 10:15am Sep 18, 2023 10:15am
Still in this long USDCHF trade, this week FED rate decision, let's see what happens. Watch how on the 1D-chart the short term MA already crossed the 100 MA and medium term MA is about to cross. On the MA crossboard everything green except D1. IF we get above the 0,9 level, there might be quite some potential. My guess ...
SL set on break even and waiting to decide on TP, nothing to lose!
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  • #1,217
  • Sep 18, 2023 10:24am Sep 18, 2023 10:24am
Quoting walvekarraje
trade the timeframe .... not the instrument.
i will trade AUDUSD on daily ttimeframe as per rules of the thread......
daily candle close below 8 ema...

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  • #1,218
  • Sep 18, 2023 10:37am Sep 18, 2023 10:37am
Quoting Uru-trader
Still in this long USDCHF trade, this week FED rate decision, let's see what happens. Watch how on the 1D-chart the short term MA already crossed the 100 MA and medium term MA is about to cross. On the MA crossboard everything green except D1. IF we get above the 0,9 level, there might be quite some potential. My guess ... SL set on break even and waiting to decide on TP, nothing to lose! {image} {image}
Well done, nice profit waiting!
  • #1,219
  • Sep 18, 2023 10:37am Sep 18, 2023 10:37am
why not trade H4...
simple .... there is no trend on H4.
the price action is moving above and below 8/21 ema on the chart.. there is no trend
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what i mean to say by .... trade the timeframe
  • #1,220
  • Sep 18, 2023 11:45am Sep 18, 2023 11:45am
Quoting walvekarraje
why not trade H4... simple .... there is no trend on H4. the price action is moving above and below 8/21 ema on the chart.. there is no trend{image} what i mean to say by .... trade the timeframe
Exactly, that's what I call a pinch - everything pinched close together, i.e. it is going sideways. This spells opportunity! Because many times, price will explode out of consolidation like this and we need to be able to catch it without getting caught in it too early. Or wait for the subsequent pullback and enter more safely then.
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