EMA 25-50 Trading System (Detailed)

Huge drop on the GBP/JPY currency. Closed my short position for +124 pips.

Overall this week using the 2550 system with money management I am up 112 pips.

Anybody ready to go long on the GBP/JPY according to fibonacci after we had this massive drop?

Entered long based on Fibonacci.

Entry 233.15

SL 232.65 (Just under Support)

Target 38% Fib retracement 234.59

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."

Considering the nature of the consolidation we've had in the past week, im inclined to technically assume a retracement much larger than expected and its extremely possible that Bearish scenario 2 as stated last week comes into play and the bulls run for 240.63 in an attempt to establish a new bullish trend.

http://img204.imageshack.us/img204/6347/reviewct6.jpg

Bullish Scenario 2 having taken place in movement E failed to make a new high capping out at daily resistance and the 150% profit taking level.

The dark cloud cover pattern created failed to be confirmed to the downside by the bears on Friday but the lack of intent from the bulls also failed to invalidate the pattern by closing/opening above it's highs, leaving the market at an equilibrium.

Price was dumped over the weekend and Mondays candle opened inside Fridays candle forming a bearish harami for the moment.

If price closes as a harami today we will have a confirmation of downward decision. Not excluded is the fact that price may close well below the low today confirming the movement lower and forming a poetic engulfing bearish candle.

At this point the sentiment has shifted from neutral to bearish.

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GBP/JPY Short (Daily)

Entry: 237.37
SL: 240.35

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TRIGGERED
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As always with trades that require a wide SL due to the TF of application, reduce your lot size respectably to maintain a standard loss ratio.

If the trade goes our way we will pile lots on correction on minor time frames.

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We are floating at +455 Pips now and testing Pivot Point Support 3.
Take profit if you have to now

Our Manual Trailing Point is just above 234.17 on M30 at 234.35

Hope you had the stomach to hold the trade out.

PS: Thanx for all the birthday wishes guys! I really appreciate it and i'm happy to see everyone trading 2550 and making money.

Regards.
E. Lang

+600 PiPs

New MTP: 232.84 (Short Term)

No Long Term MTP (Manual Trailing Point) available as of now.

We have an inverted hammer followed by a hammer forming on H1. This could call major profit taking depending on how the current candle closes and how the candle after it confirms.

http://img406.imageshack.us/img406/897/an2wj7.jpg

Be the best at what you do!

Nice article Effi!!

Be the best at what you do!

Patience almost above everything else exceeds in importance.

Persistence itself if you think about it is a form of un-going patience. To persist in something and be consistent in it means that you understand that your input at any one time will or may "probably" yield a result of benefit that will lead towards a gain in the area you're targeting, so your mind besets itself to expect by waiting.

Persistence is Patience and Patience is Persistence, one can't cope without the other and neither will ever exist without Motivation, so its important to know what you're doing and WHY you're doing it. And when you tumble and fall you know "why" to get up and exactly in which direction to resume your journey.

If you just hit Buy or Sell randomly on your chart, given the required time for the trade to develop will yield a profit and with basic money management you're more likely to end up in the green than in the red.

Just as a master strategist may posses the perfect method of attack, it's devastation only maintains its value and efficiency in balance of his understanding and acknowledgment of the perfect time towards its application and the period required for it to produce its expected effect.

Patience is absolutely crucial.

Regards,
E. Lang

Reading the rules of the system a short is triggered if the 4hr candle opens and closes below the 50EMA, but looks like this entry was based on a close only. Going by my interpretation of the rules the entry would have been after the next candle at around 235.94, which was the bottom of that wave and would probably have been stopped out as price retraced around 350 pips.

I've been looking back to see whether entering after a full candle opens / closes either side of the 50MA, or just going from a close makes a lot of difference and the results look to be inconclusive - waiting for open / close will keep you out of fake-outs, but can also mean you get in at the end of moves as in the trade i just mentioned. Interested to get Effi's comments on this.

I too would like to ask Effi's opinion on this. Going over post #3, there are two candles marked in yellow. So which candle is the preferred entry? The first candle in yellow looks like it is right at the 50 at it's open, the second candle is clearly above the 50 the entire time. So, it seems to me that as long as a candle has closed above the 50, take the trade at the open of the next candle, and if the candle has closed exactly at the 50, it is okay to take that trade as well?

Maybe Effi if you don't mind you could post some new example charts that are a little bit larger in size and easier to see than your original ones and could clear this important point up?

thank you for your time and help in this matter kind sir!

Hi guys,

All you need is for a candle to CLOSE over the 50 and for another to consecutively OPEN.

When a candle closes another opens no ?

lol

All you need is a closing.

If it closes at the 50, its a risk.

Regards,
E. Lang

We are floating at +770 Pips now

Change your Manual Trailing Point (MTP) from 232.84 to 232.46

Continue holding the position until further notice.

Regards,
E. Lang

WoW the daily price opened with a window.

This drop could be big if the window stays open.

what this means? that it could take several days to close it?

The gap between the current candle and the other side of the window is about 90 pips a correction to likely happen today.

If we have prices close above the gap and shut the window whilst higher highs and higher lows persist the fall will be terminated by most views.

If the fall is to continue price should bounce of the window and resume the fall.

Our MTP is safe where it is now.

Look up "Three Rising Windows" or Window continuation patterns or indecision patterns.

Regards,
E. Lang

Even though in its early stages of development the daily candle is forming into a bullish counter attack line, if the window is closed with this pattern, we may have a major reversal and can probably call the decline over.

That counter attack line will invite a lot of buyers in.

To the downside (our current direction of trade) - we're hoping the price bounces of the 231.04 area and resumes the fall.

Quote:
Originally Posted by effilang http://www.forexfactory.com/images/buttons/viewpost.gif

GBP/JPY Short (Daily)

Entry: 237.37
SL: 240.35

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

As always with trades that require a wide SL due to the TF of application, reduce your lot size respectably to maintain a standard loss ratio.

If the trade goes our way we will pile lots on correction on minor time frames.

We are floating at ~+760 Pips now

****Change your Manual Trailing Point (MTP) from 232.46 to 231.02

Continue holding the position until further notice.

Regards,
E. Lang

We will be hitting +1000 pips today or tomorrow on this trade solely.

If you haven't taken profit yet that is a good area to do so.

If not continue Manual Trailing it.

_________
Note we took this trade on the 5th of November. It's been 7 days since then so the trade is paying off at about 100 Pips a day, which is what we normally aim to achieve, so we're ok.

All in all we've had about 4 losses this month. A few winners and are nearing 2000 PIPs for the month with our monthly 1000 PIPs covered.

I'm not gonna push for any more trades unless they are very irresistable

I'll post them here of course.

Regards,
E. Lang


****Change your Manual Trailing Point (MTP) from 232.46 to 231.02

S1: 228.89
S2: 226.48
S3: 221.91

Our initial goal for this trade is: 225.60

Regards,
E. Lang

This is a great thread. Thanks for your input Effi