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Ok I don't get it please help

  • #1
  • First Post: Edited 1:42pm Jul 29, 2005 1:15pm | Edited 1:42pm
First off. This forum is great. There is just so much information to assumlate, that it is over whelming. So a big thanks to all.

OK here it is. I am trading on the one minute chart using EMA's set at 5 and 13. I can say this if I do any thing consistantly it is lose. When the 5 crosses over the 13 I follow the line and buy or sell accordingly. Sometimes I do pretty good but for the most part I lose. The one minute chart is so choppy. I looked at like the 30 minute and 1 hour charts and they are quiter, but my problem is when the EMA's cross there I am already 10 to 20 pips behind. What I mean is on the one minute chart if I got into the trade it would have been 10 or 20 pips sooner then if when I get in on the 30 min or hour charts so essencially I am losing pips.

Does this make sence to anyone????

Here is an example today to 14:15 the EMA's Crossed down on the GBP/USD at the price of 1.7589 then the EMA's crossed on the 15 min Chart @ 14:30 the price then was 1.7581. I just lost 8 pips.
Fdisk Please I just want a few pips. Is that too much to ask?
  • #2
  • Edited Jul 30, 2005 12:25am Jul 29, 2005 7:01pm | Edited Jul 30, 2005 12:25am
Quoting fdisk
First off. This forum is great. There is just so much information to assumlate, that it is over whelming. So a big thanks to all.

OK here it is. I am trading on the one minute chart using EMA's set at 5 and 13. I can say this if I do any thing consistantly it is lose. When the 5 crosses over the 13 I follow the line and buy or sell accordingly. Sometimes I do pretty good but for the most part I lose. The one minute chart is so choppy. I looked at like the 30 minute and 1 hour charts and they are quiter, but my problem is when the EMA's cross there I am already 10 to 20 pips behind. What I mean is on the one minute chart if I got into the trade it would have been 10 or 20 pips sooner then if when I get in on the 30 min or hour charts so essencially I am losing pips.

Does this make sence to anyone????

Here is an example today to 14:15 the EMA's Crossed down on the GBP/USD at the price of 1.7589 then the EMA's crossed on the 15 min Chart @ 14:30 the price then was 1.7581. I just lost 8 pips.
First, what you said makes sense in that it is clear you seem to think you are losing pips. But, other than your question "does this make sense?"... what is the question you are trying to ask -- if any?

FT
  • #3
  • Jul 29, 2005 11:45pm Jul 29, 2005 11:45pm
What you said makes no sense and the answer to your question is ... No.
  • #4
  • Jul 30, 2005 12:41am Jul 30, 2005 12:41am
Quoting fijitrader
First, what you said makes sense in that it is clear you seem to think you are losing pips. But, other than your question "does this make sense?"... what is the question you are trying to ask -- if any?

FT
My question is when using EMA's when they cross you get in the trade, but on which chart do I use. The one minute is choppy but if the cross is hold true you make more pips. The 30 minute chart seems to be more accurate but the EMA's always cross so 15 to 20 PIPs later so it looks like I just lost those pip because I waited to get into the trade until the EMA's crossed on the 30 Min chart. Which chart is best for EMA's
Fdisk Please I just want a few pips. Is that too much to ask?
  • #5
  • Jul 30, 2005 6:11am Jul 30, 2005 6:11am
Quoting fdisk
My question is when using EMA's when they cross you get in the trade, but on which chart do I use. The one minute is choppy but if the cross is hold true you make more pips. The 30 minute chart seems to be more accurate but the EMA's always cross so 15 to 20 PIPs later so it looks like I just lost those pip because I waited to get into the trade until the EMA's crossed on the 30 Min chart. Which chart is best for EMA's
Ok now I understand your question better. I'm not sure you'll like the answer because there is no specific answer about which MA is best but rather guidelines. All of the charts can be useful but for different reasons and for different types of trading.

It sounds like you do not yet have a trading system. If that is correct I believe you need to start there. A system is composed primarily of rules that govern four major areas:

1. Trade entries.
2. Trade exits.
3. Trade size.
4. What markets you'll trade.

These four areas must be clearly defined in such a way that you have a system that can be demonstrated to make a profit with a degree of consistency that your account and emotions can tolerate. Until you find such a system you'll probably always lose more money than you make.

It is fine to play with moving averages and try to create a system from that but it makes sense for you to find out more about how to create a system if you are going to make your own. There are many books and courses but only a few tend to encompass and then surpass what you'll find in most of the other books. Merlin had a great book list on this forum. If you search his posts he had a contest some time back where he gave away a set of 10 books to the winner. In that list were some gems. Many of these books are available at the library or can be bought in book stores.

Also be sure to read through James16's chart thread. There is enough information in there that will help you develop a trading system directly from a successful trader.

The super short answer to your question is that MA crosses on larger charts are generally more significant and reliable than the ones on the smaller charts. That answer really is too short though because there are many ways to use the smaller charts also. Yes the market does move quite a ways to creat the signals on larger charts and a good piece of the move has already been lost when the signal comes but entering too early can lose you more money than you'd make by being in too many moves that have too little momentum. Most new traders don't want to miss anything that starts to move whereas a seasoned trader wants to miss everything that does not keep moving.

FT
  • #6
  • Jul 30, 2005 10:28am Jul 30, 2005 10:28am
Quoting fijitrader
Ok now I understand your question better. I'm not sure you'll like the answer because there is no specific answer about which MA is best but rather guidelines. All of the charts can be useful but for different reasons and for different types of trading.

It sounds like you do not yet have a trading system. If that is correct I believe you need to start there. A system is composed primarily of rules that govern four major areas:

1. Trade entries.
2. Trade exits.
3. Trade size.
4. What markets you'll trade.

These four areas must be clearly defined in such a way that you have a system that can be demonstrated to make a profit with a degree of consistency that your account and emotions can tolerate. Until you find such a system you'll probably always lose more money than you make.

It is fine to play with moving averages and try to create a system from that but it makes sense for you to find out more about how to create a system if you are going to make your own. There are many books and courses but only a few tend to encompass and then surpass what you'll find in most of the other books. Merlin had a great book list on this forum. If you search his posts he had a contest some time back where he gave away a set of 10 books to the winner. In that list were some gems. Many of these books are available at the library or can be bought in book stores.

Also be sure to read through James16's chart thread. There is enough information in there that will help you develop a trading system directly from a successful trader.

The super short answer to your question is that MA crosses on larger charts are generally more significant and reliable than the ones on the smaller charts. That answer really is too short though because there are many ways to use the smaller charts also. Yes the market does move quite a ways to creat the signals on larger charts and a good piece of the move has already been lost when the signal comes but entering too early can lose you more money than you'd make by being in too many moves that have too little momentum. Most new traders don't want to miss anything that starts to move whereas a seasoned trader wants to miss everything that does not keep moving.

FT
Great post fiji it helped me too.
  • #7
  • Jul 30, 2005 3:39pm Jul 30, 2005 3:39pm
Quoting fdisk
Here is an example today to 14:15 the EMA's Crossed down on the GBP/USD at the price of 1.7589 then the EMA's crossed on the 15 min Chart @ 14:30 the price then was 1.7581. I just lost 8 pips.
You haven't lost anything unless you already have a position. You are talking about the 8 pips as if they are a loss. No, they are not. They are the price you pay for the time you wait for confirmation, so practically speaking, they are not a loss, they are considered an insurance, and actually a delayed insurance as well, because you pay them later on after you open and close your trade. You sacrifice 8 pips of a projected future profit to get a trade which have a higher probability for making a profit.

Does this make any sense ?

Thanks,

Nader.
  • #8
  • Aug 1, 2005 12:20pm Aug 1, 2005 12:20pm
I appreciate the input, I Think I see what you are saying. By waiting until the EMA's cross on the longer charts it is more of an assurance that the trend is going in that direction. So I really am not losing those pips because I was never in the trade. Thanks
Fdisk Please I just want a few pips. Is that too much to ask?
  • #9
  • Edited 1:08pm Aug 1, 2005 12:48pm | Edited 1:08pm
I'll tell you my super techincal system which is similar to your own.

I use a 10,25,and 50 EMA on a 30 minute chart with a Parabolic SAR at 9,3 (3).

I include a Stochastic indicator at 0.02, 0.2.

I have tried a lot of systems - but I like simplicity.

When the 10 crosses (completely) the 25/50 with the SAR on the entering side, enter the position. I use the Stocahstics as some indicator as to the trend length and strength. There is more detail about it at www.TIER-7.com under Personal Trading Books.

I would advise using a 15/30/1 hour chart.

I know it's not as elaborate as other systems, but I just enjoy using this system and it has rarely let me down. No lines to draw, no charts to analyze, no projected Fibonacci guiding registers pointing to the third quadrant of the monetary expenditures , just plain simple forex trading.

(Unless we're talking about the analysis from guys like james16, he does cool charts - but doesn't sleep much from what I understand and he points out very solid entry points)

As far as missed pips, you need to wait for the indicators no matter what. So they aren't really "missed" - they are positional pips that need to be generated in order for your indicators to kick in (at least, that's what I tell myself). It's best to play it safe and be patient.

You miss one trade? I got great news - there's always another one.
Capital Preservation is key to long term wealth accumulation
  • #10
  • Aug 1, 2005 1:55pm Aug 1, 2005 1:55pm
MuddBuddha,

I went to www.tier-7.com under Personal Trading Books and I clicked on the link www.incrediblecharts.com . I get a message that the page was not found. Do you have another link or address to this page. Thanks.

Jim
  • #11
  • Edited 2:31pm Aug 1, 2005 2:24pm | Edited 2:31pm
Actually, click the title of the book you're wanting to read to open it up.

The www.incrediblecharts.com link posted as being an internal link, so it was re-directing to www.tier-7.com/www.incrediblecharts.com which doesn't exist.

Sorry about that. Forgot to fix the link problem with that post. I've got it straightened out now.
Capital Preservation is key to long term wealth accumulation
  • #12
  • Aug 2, 2005 12:19am Aug 2, 2005 12:19am
Thanks for sharing your system. I'll Play with on my demo. I like simple. I think that has been one of biggest challenges. I like to complicate things and then i get confussed. Thanks once again.

Fdisk
Fdisk Please I just want a few pips. Is that too much to ask?
  • #13
  • Aug 2, 2005 8:37am Aug 2, 2005 8:37am
No problem. Glad I could help. I taught that system to a guy a couple weeks back and he did very well with it. He said he gained about $900 in two days time. Keep in mind I have no idea what his equity was or what type of lot size he was risking. But he was very happy with the results.

The same system can be used on the 5 and 1 minute charts with an EMA setting of 25/50/100. It is very risky and I rarely ever use it on anything lower than the 15.

On the 1 hour and 30 charts, it produces very good results (90% of the time) given the pair doesn't whipsaw due to poor news or disaster, but it may not give you an opening every day. But then again, the openings you get can last for 1-4 days.

Good luck.
Capital Preservation is key to long term wealth accumulation
  • #14
  • Aug 2, 2005 9:31am Aug 2, 2005 9:31am
Quoting MuddBuddha
No problem. Glad I could help. I taught that system to a guy a couple weeks back and he did very well with it. He said he gained about $900 in two days time. Keep in mind I have no idea what his equity was or what type of lot size he was risking. But he was very happy with the results.

The same system can be used on the 5 and 1 minute charts with an EMA setting of 25/50/100. It is very risky and I rarely ever use it on anything lower than the 15.

On the 1 hour and 30 charts, it produces very good results (90% of the time) given the pair doesn't whipsaw due to poor news or disaster, but it may not give you an opening every day. But then again, the openings you get can last for 1-4 days.

Good luck.
Thank you very much for sharing your system Muddbudda. I found it to be refreshingly simple and easy to understand. I made 4 trades yesterday and 3 out of 4 were winners for me coming out ahead about 34 pips. Will keep studying it and trading it. Nice site also. Again many thanks.
  • #15
  • Aug 2, 2005 10:00am Aug 2, 2005 10:00am
Thanks MB,

I am going to see if this system set up will trade with a robot.
It is on my to do list.

Lou
  • #16
  • Aug 2, 2005 10:02am Aug 2, 2005 10:02am
Good.

I've settled myself on the 30 minute charts. The 15 minute can be too fast on an active market and the 1 hour can be too slow sometimes. The 30 minute chart seems to be a good middle ground.

I was hesitant at first to convert to the 30 because I wanted to "get in the game", and the 15 chart gets you there much faster.

All being said, the 1 hour and 30 are the safer charts to play.
Capital Preservation is key to long term wealth accumulation
  • #17
  • Aug 2, 2005 10:43am Aug 2, 2005 10:43am
Ok,

So the 30 m takes on the 'Rules' of the 15 m in the original instructions? Especially with regard to " do not trade against the 15 m SAR" now becomes do not trade against the 30 m SAR ?
  • #18
  • Aug 2, 2005 12:19pm Aug 2, 2005 12:19pm
Actually, that's the first time anyone has asked that question, But here is the explanation that I feel best fits:

If you are trading on the 1 hour chart and you are tracking an EMA opening and once the EMA 10 crosses through the 25/50 with the Parabolic SAR on the entering side, you cross reference the faster charts to confirm entry position. The different time charts act like a macro/micro system. The macro (1 hour) gives you a "broad" look at the directional trend of the pair while the micro charts, 30/15, give you a more microscopic look into the smaller trends residing within the whole. We all know that when the market trends it doesn't just shoot straight up and down but often takes a "Three steps forward - One step back" pattern as it moves in the prevailing trend. Your goal as you examine the faster charts prior to entry is to not enter during the "One step back" phase.

This way, you don't loose unnecessary pips and possibley open during a trend reversal. Noramlly you can observe the 30/15 SARs move in a similar pattern with the exception of market uncertainty where you may observe conflicting SAR patterns - which I would advise not to open until a well established pattern has emerged.

So, to answer your question in short, rather than change the rules and apply them to the 30 min charts, include the 30 for a "step down" view of the pair movement.

The 15 minute rule should always apply. If you notice that the 1 hour SAR is good, the 15 minute SAR is good, but the 30 has dotted opposite, you should consider waiting for the next SAR period (30 minutes on the 30 chart) and verify trend direction.

Like any trading system, the more you observe the systems patterns and behavior and understand the system, the more successful your trading as you will be able to see pattern "warning signs" that indicate a bad position.

I wouldn't call this "Forex for dummies", just "Simple Forex" because it still requires an active role on the part of the trader other than just watching the pretty colored lines.
Capital Preservation is key to long term wealth accumulation
  • #19
  • Aug 2, 2005 2:06pm Aug 2, 2005 2:06pm
First, MB, I'm quoting you from another post in another thread:

Quoting MuddBuddha
I set a pip range for myself based on my trading sytle and I expect that pip range on a fairly regular basis. If I notice the range I'm shooting for is shrinking, then either the trend is biased against one of the currencies in the pair, or there is re-direction occuring. (this is based on my own system - so the previous statement may not particularly apply to yours. I day trade and scalp on the 5, 15, and 1 hour charts - so for myself, I expect at least 70-75 pips per day)
Ever since I read that post, I've been itching to ask you how you got 70-75 pips per day, but thought it rude to ask.

Is the system you shared the one you use to get those pips? If so, and if you don't mind sharing, how do you apply your system to get that pip range? I'd really like to know what combination of hours, currencies and timeframes you use, along with any other info you feel is important.

If you need someone killed, just let me know.

Thanks again for sharing your system.

Dial
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  • #20
  • Aug 2, 2005 3:14pm Aug 2, 2005 3:14pm
Yes, this is the system I use on the above qoute, and since that qoute I've added the 30 minute chart. To clarify the pip range, I diversfy my pair portfolio to a select few pairs that I feel confident with and have traded for a while.

When I started trading stocks (day trading) a few years ago, the instructor said to diversify your portfolio to protect yourself but to do so within a range of reliable stocks and careful not to over diversify as you would have the same effect or worse as a un-diversified portfolio. In essence, he was stating that an over diversified portfolio in day trading was too difficult to manage properly and would have a bad effect as the stock trend moved against you - you may catch it late or not at all.

When I started Forex, I read an obscure website author who said to concentrate on 1 pair until you knew that pair very well and then move on to another - eventually totaling 4-6 pairs.

Currently, I have only four pairs that I trade: EUR/USD - EUR/GBP - EUR/CHF - AUD/USD

What I have done is chosen 4 currencies that are radically different from each other in their movements and pinned a chart time that I use for each one.

The EUR/USD : 30 & 15 - 30 exclusively during violatile periods
The EUR/GBP : 1 hour - It has beautiful peaks and vallys but is rather shallow on the 30 and 15 minute charts
The EUR/CHF : 30 and 1 hour - She's my nice "slow and steady" - I like her because she's reliable and doesn't give you too many suprises.
The AUD/USD : This one I recently added in substitution for the USD/JPY. I haven't quite figured out her pattern yet. She was profittable for me last week on the 30 minute charts, but if you view the daily on the same EMA settings, it's a scary ride. The 3- hour is decent, but I'm thinking it will be a strictly 30 minute pair.

The thing I like about these pairs is that what affects one doesn't necessarily affect the others. The EUR/USD make take a dive and never see the effect ripple to the EUR/CHF. The same can be said for the EUR/USD AUD/USD. If the dollar plumments on rising oil - the effect noted on the AUD is still there but on a much smaller level. So while I was longing the EURO/USD most of the week, I was shorting the EUR/CHF and both on the EUR/GBP.

The important part of acquiring the stated pip range is that I monitor the market and my positions like a hawk. I am not sitting in front of the computer all day, but I do check it regularly and yes, even a couple of times during the night. Even though I have four pairs set up in the platform exclusively, I make it a rule never to open more than 2 positions at any given time. It just seems to work better for me that way - not really sure why. So, if I see an opening on a pair and already have two positions open, I may close a slow moving position and open on the more favorable pair. But "Ms. Slow and Steady" is always there to go back to.

I realize this is not a well written, technical description, Dial, and I apologize for that; but it is the method I use. Now, I've had times that I have broken the rules, have gotten impatient, or decided to try something new that has seriously back-fired on me, and I'm good about admitting when I've been an idiot. Normally, it's when I try to get technical that I fail terribly. Simple systems seem to work better for me and I personify the pairs slightly in the way I relate to them(sounds kinda sad).

My pip average is fairly stable since I am pratically always in a trade, but it's not without effort. I changed platforms a couple of weeks ago and really screwed myself up. I just couldn't adapt to the platform and had to change screens to view charts and another to place orders. I was with them(Forex.com) for about 4 days and I called them and asked them to cancel my account. I didn't do well that week at all. Even utilizing the same system. The 5 and 15 minute charts on their platform were terrible and the price flucuated rapidly - UUGGGH. So, I went back to Oanda.

Chart the system and see what you think. I added some charts to my blog at TIER-7 if you want view the 15 and 30 comparison of the pairs I talked about. I was getting a lot of request for them so I stuck them up this afternoon.
Capital Preservation is key to long term wealth accumulation
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