EMA 25-50 Trading System (Detailed)

hi effilang,

i need your help.hope u don't mind to help me.i got some question regarding 2550.i'm trade daily with your method but i got confuse when to exit.can i know how do you exit in daily?and what is your TP for daily?and about your SL,do you prefer 1*ATR or 2*ATR in daily chart?i'm short U/J right now and already 50 pips LOL.sorry for asking a lot,i'm still newbie :
thx for helping bro

The last daily 2550 trade i took had a maximum profit potential of 600+ Pips, i closed the trade out at 400+. (I'm gonna call this MPP from now on cuz its too long to write every time)

I closed it based on Higher Highs and Higher Lows / Lower Lows and Lower Highs + Manual Trailing.

You will rarely be able to exit at the peak of the movement with 2550.
The idea is to have a preset TP Level.

Trading 2550 on the Daily chart with 10 Pairs can easily bring you in 1000 Pips monthly with a TP of 100 - 200 Pips on each trade at about 10 to 15 trades a month.

When you have a defined system, executing the trade becomes a flawless process. The same can be done for profit taking, but only when your algorythm is followed systematically.

I urge anyone following this thread and the free signals i post to dedicate a month of their lives and trade with me with a TP of 25 to 50 Pips.

I guarantee you will make at least 1000 Pips monthly if you do not let your greed get in the way of cashing in.

Once you've hit your take profit all you need to do is close the trade and wait for another one.

I don't really know what other way to explain this lol

Best Regards,
E. Lang

I'm up for Effi's challenge. Most of my other trading plans have sucked anyway. Up 20%, then down to breakeven. Has anyone tried 2550 with CFD's, stocks, oil, or other currencies? What TF have traders had success with? I've read both threads on this method it mostly seems to be daily or H4 candles with JPY crosses. I like not having to watch for signals all day, but it takes a loooong time for a new signal to form with a daily candle.

"It is an excess of any extremal factor that causes a natural disbalance.
So a hurricane is not nature’s way of restoring balance; it’s the result of our influence in having created disbalance in the first place.

Nature, on its own, is a perfectly calculated balance, just as a scale with equal weights on both sides remains in equilibrium, commonly does as natural event, occurrence or process.

It’s the external forces that inact on it eg; humans that push down on one side of the scale to cause disorder that are the reason fluctuations happen; tornadoes, hurricanes, typhoons, tsunamis.

When that happens we can either compensate for it by having other external forces add on over the opposing side, or we can let go by lifting our finger and allowing the scale to align back to its center.

The problem is that humans have evolved into naturally disbalanced and disordered creatures and their existence and mutual interaction promotes more of that. We just don’t let go, instead everytime one side tips in its favor, we push on it on the other side until at the end of the day we reach a level which is artificially representative of natural balance, but what we don’t realize is that its all fake.

It’s too late in humanity’s course to EVER restore natural balance. It’s never going to happen on a mass scale, BUT on an individual level, it’s very possible and attaining harmony within yourself is a reachable feat. It’s up to every person to maintain balance within their own lives and those around them to the best of their capacity and ability to do so, but on a mass scale……………… its just too late.

Balance and natural order is a fact which we’ve turned into an illusion, because “someone” always needs to be in charge or the claimant or possessor of something that happens. The world and the natural forces around us "do not" require us to prosper, they were evident long before our existence. Our greed is the root of the parasite which insinuates disatisfaction in our achievements and encourages the urge to want and posses more than is necessary.

The world is headed downhill. Human life is a viral plague that spreads quickly an its only about time that we annihilate our existence..."

Hi Effi,

You don't have to call it MPP, as there already exists a standard term. It is MFE which stands for Maximum Favorable Excursion. It represents the maximum distance price moved in your favor from the entry.

MFE's counter point is MAE, which stands for Maximum Adverse Excursion. It represents the maximum distance a trade moved against you from the entry.

A very valuable exercise is to take note of the MAE of all your winning trades. The idea is that winning trades simply don't move very far against you. By tracking the magnitude of the MAE of your winning trades, you will then have a better idea of where to place intial stops for a given system. For example, if you notice that 80% of your winning trades never have price go more than X number of pips against you, then you can set your initial stop to the value of X.

Assume you make a series of trades using 2550 using an initial stop of 2*ATR. MAE analysis may reveal that an initial stop of 1.2*ATR covers 80% of all winning trades. Using the smaller, but analytically determined smaller stop allows you to put on a larger position size per trade which should help your profits.

Just a thought.

Dial

Oh, ok... lol

That helped.

Feels so good when i learn something new, can almost feel my brain growing in real time haha

I use the technique you stated. Just never knew it had a name.

I manually back test every system i create for minimum 3 years, candle by candle, i'm not too big a fan of software backtesting.

Thanx Dial.
Regards,

E. Lang

Hello effi.......

I would like to add an additional observation to what Dial explained in post #852:

The same principle can be applied to profit taking. In developing my individual style of Fozzy trading, I have done exactly as Dial explained to establish a set of Stop-Losses for each currency pair I trade. These can regularly be updated as more trades are entered and closed.

I suggest doing the same to establish a set of Take-Profit values based on previously entered trades. Backtest and record the minimum and maximum MFE for all potential profitable trades using your method (perhaps the 80% figure suggested by Dial). Then decide how many lots you want to use per trade. The first lot can be closed using the minimum MFE value (additional lots could be moved to B/E at this value). IMO, the minimum MFE value should provide good basic Risk/Reward Ratio for each trade. Then scale out the additional lots using the collected data, perhaps having well established T/P values for each lot. The last lot can be left to run with the trade, perhaps with a trailing S/L. This method helps me maximize my trades.

Just returning the favor Effi. I've learned more than a thing or two from you also!

To newer traders: Effi is teaching a safe and conservative method of trading. You will do well to follow his advice. So, if the ideas that BeachBum and I just posted are causing you confusion, then just file them away for future reference. You don't have use them. You'll do just fine with what Effi is teaching. You can always come back to MFE & MAE after you've grown as a trader.

Thanks Effi! You're doing a fine job in this thread.

Dial

P.S. I too am a big believer in manual backtesting. I have little use for automated testing.

Thank you Dial, GREAT!
What do you think about using ATR also for first TP. I'm trying to use 1*ATR for 1° TP. It seems working well.
Greatings
Giorgio

Hi Giorgio,
I've hijacked Effi's thread enough already, so let's let him answer your good question.

Dial

Hey Dial,

Its all good. Can do with some extra help anyways + i'm just plain lazy on weekends lol.

Giorgio,

I think you will find using the ATR for profiting taking to be rather convenient.

I have experience with that and can definitely concur to its efficient application.

Using Set TP lvls works just as well. 15, 25, 35, 45 work very well.

Let us know how it results for you if you're planning to apply it on a long term basis.

Regards,
E. Lang

--------------------------
Excerpt from YongBman's Blog
--------------------------

The Average True Range (ATR) indicator measures a security's volatility. As such, the indicator does not provide an indication of price direction or duration, simply the degree of price movement or volatility.

True Range (TR) which is defined as the greatest of the following:

* The current High less the current Low.
* The absolute value of the current High less the previous Close.
* The absolute value of the current Low less the previous Close.

http://stockcharts.com/school/data/m.../atr-excel.gif

(above: the example how to calculate Daily TR. ATR is simply the average of last 14-day TR)

A detail picture showing how to classify 3 different situations when the difference between current high and current low is relatively small:

http://stockcharts.com/school/data/m...tr-example.gif

Extreme levels of ATR (both high and low) can mark turning points or the beginning of a move. As a volatility-based indicator like Bollinger Bands, the ATR cannot predict direction or duration, simply activity levels. Low levels indicate quiet trading (small ranges), and high levels indicate violent trading (large ranges). A prolonged period of low ATR readings might indicate consolidation and the beginning of a continuation move or reversal. High ATR readings usually result from a sharp advance or decline and are unlikely to be sustained for extended periods.

Many traders find the following technique profitable using an 8 Period ATR:

If the High of a previous candle e.g. Daily or H4, is violated by a live candle with a price equal to or greater than that of the current ATR value, then BUY.

STOP Loss = 1 x ATR (From Entry or a Technical Level / Low|High)
TAKE Pr. 1 = 2 x ATR
TAKE Pr. 2 = 3 x ATR

Trailing is by 1 x ATR

Regards,
E. Lang

ok effi,

told you i had to re-read this few times and i am still just a bit confused. i see your entry is a good one, but you said in the rules that when the stoch touches or crosses, consider getting out. the stochs crossed 4 times before it hit the 20 line, then headed up and crossed 2 more time before you had the first exit opp??? i have seen a trading system that uses the 5,3,3 stoch as a way to trade, and the downward movement is a short trade, the up is a long trade, i tried it a few times on demo, i won 4 out of 5 times, the 5th was a bad economic data release. i guess i am asking why you stayed in the trade until exit 1, or does the rsi above 50 and staying there means it will go and stay long??? as for what i was doinf with my shorter tf wins, i was watching the 30min and 1 hr as well as stochs to make the trades.

http://img87.imageshack.us/img87/223/reviewvy8.jpg

Bearish corrective price action has terminated at the 61.8% retracement from 251.121 to 219.23 at 239.00. Price retreat has developed steadily breaking through daily support at 235.50, promoting the continuation of the fall started at 251.12 in a bearish impulse.

As long as price action maintains progressive bearish ground below 235.50 further decline is expected to continue to minor support of 232.50 from which two scenarios will possibly branch into existence:

BEARISH
1.Profit taking bearish impulsive correction (minor) starting at the 232.50 (D of corrective ABC) expected to terminate around the 236.70 area before the resumption of another bearish impulsive wave (minor) in perspective to impulsive fall from 240.68/238.00 (major) which should proceed towards Daily Support around the 229.00 area.

BULLISH
2.Bearish impulsive corrective retracement progresses higher than expected and terminates the current fall.

Price action above 235.50 >> 237.42 will conccur to this sentiment.

Corrective retracement from 251.00 resumes breaking 240.63 in (E) of regular ABC corrective pattern confirming a new Bullish trend.

Regards,
E. Lang

----------------------
UPDATE
----------------------

GBP/JPY SHORT


Entry: 237.41

SL: 238.36

----------------------
TRIGGERED
----------------------

Intraday

T1: 25 - HIT
T2: 50 - HIT

Swing

T1: 100 - HIT
T2: 150 - HIT
T3: 200 - HIT

Dang!

T1: 300 - HIT
T2: 400 - Live
T3: 500 - Live


----------------------
COMMENTS
----------------------

Keep your heads up for Swing TP 3. Cash out if this is your target otherwise manual trail (check tutorial at the beginning of the thread)

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Trade Specific Updates
----------------------

Continue manual trailing by moving to your new SL at High 237.00 due to the Weekend break of Low 234.78 (check tutorial at the beginning of the thread)

We are going to continue manual trailing with this trade pertaining to Bearish Scenario 1 stated in the previous post.

Just to brag, with all the signals posted this month (half of them are on another forum since i was banned) - we've reached our monthly minimum of 1000 PIPs this month.

Less in comparison to last month, but it's only been on the GBP/JPY pair as opposed to the 3K+ Pips we amassed on about 4 pairs last month.

It was getting too exhausting updating all those trades.

Hope you're all making money

Regards,
E. Lang

Oh yeah, another little brag, no SLs hit this month

My Charts aren't on yet, so i cant check for any trades

Should have them working soon, will post if i see anything on GBP/USD, GBP/JPY, USD/JPY or EUR/JPY

Regards,
E. Lang

its a good system efi.........a very good work...
good luck....all

----------------------
UPDATE
----------------------

GBP/JPY SHORT


Entry: 237.41

SL: 238.36

----------------------
TRIGGERED
----------------------

Intraday

T1: 25 - HIT
T2: 50 - HIT

Swing

T1: 100 - HIT
T2: 200 - HIT
T3: 300 - HIT
T4: 400 - HIT
T5: 500 - Live
T6: 600 - Live

----------------------
COMMENTS
----------------------

Swing TP4 Has been hit, if this is your target exit, otherwise maintain manual trailing SL at 237.00

We are going to continue manual trailing with this trade pertaining to Bearish Scenario 1 stated in the previous post.