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The art of Trading MAs

  • #41
  • Jun 6, 2008 10:04pm Jun 6, 2008 10:04pm
Quoting endroute
I have always loved MAs for their simplicity, I started using them when I first started trading with a good deal of succes but then migrated to other approaches over time because I had a hard time filtering out the bad crosses - that would be those crosses where you are only going to make a few pips or loose a few. If people want an approach that is easy to use and not a lot of smoke and mirrors here it is, if you don't like it don't trade it, if you have snide comments I don't want to hear them, if you want to contribute please do so. I would also expect that everyone be respectful of one another at least on this thread.

The focus of this thread is to teach a pretty simple method of trading MA's. The setups are pretty simple I use a 5 and 13 EMA and the COG indicator. I use the COG indicator to filter out the bad EMA crosses.

I am primarily a technical intraday trader and trade hourly charts, but it the trade looks promissing I may hang around for a few days. I actively trade 9 pairs so there are always at least 3-4 good setups a day which can result in a few hundred pips each day. I do not trade around major news events and I tend to pay attention to my trades. I typically do not set stop losses unless I am going to be away for a while, if I do I only set them at 20 - 50 pips depending on the pair I am trading, gbp/jpy gets 50 the rest 20. I don't want to hear all the crap about setting stops etc etc etc, I think stops are a good thing but if you are picking your entries well and paying some attention to your trades you save yourself a lot of money. This approach works on any timeframe from 5 min to daily. To answer the inevitable question of why don't I trade this daily or weekly the hourly charts best fits my personality, you have to remember trading is more about the person than the system in my opinion.

My money management system is as follows I only trade what I am willing to loose, I purposely keep my account balance low so that I am not tempted to do stupid things and I have fun with it. Trading is something I truely enjoy, for those of you that are just in this to make a quick buck no system will help you, you have to treat this like a business and it helps if you love what you do. If I loose a few hundred bucks on a trade big deal, you loose a few and win a lot.

The Setups are as follows:

Buy:
Bar closes below the bottom Green line on the COG followed by the 5/13 EMA cross. You can close the trade at the next EMA cross or use just wait for price to move to the opposite side of the COG indicator

Sell:
Bar closes Above the Top Green line on the COG followed by the 5/13 EMA cross. You can close the trade at the next EMA cross or use just wait for price to move to the opposite side of the COG indicator.

I have attached a gbpjpy trade I am currently in as well as the COG indicator.




How might I go about downloading the COG.Ex4? I havent done that yet. Thank you so much for your time. Anne
  • #42
  • Jun 6, 2008 10:59pm Jun 6, 2008 10:59pm
any way finished ea....will post after testing late monday. out of town on sunday.

will have:

(longs and vise versa for short)
-look back period - up to x bars. --price must be below gold line at selected lowest low ( adjustable lookback bars up to X bars back -- can change to green lines but endroute said not profitable .
-ema entry - adjustable ema cross .. price entry must be below blue center line for a long ...vise versa for short. (no fresh cross because we use lookback with price below gold line// current ema bar 0 > just closed ema bar 1)
(I am a 5/5 open close guy myself - so I will change if necessary)
-Cog settings will be used from end route.
- trailing stop. (did not do cog sl ... too much movement I think)
- closes - will have 2 but can add // ema and 2 RSI above 80. --- both above the blue line. ALso, minimum profit to filter out false closes.



Let me know if there needs any other signals.
  • #43
  • Jun 6, 2008 11:03pm Jun 6, 2008 11:03pm
Hey guys,

Just backtested this system with virtual trading from Vhand. Of course COG repaints big time; however, we should not accept this. When I was backtesting this system, the two moving averages were always in the middle of the COG indicator. I figured that I might as well use the two moving averages by themselves since I did not see any valid point that we need a COG.
  • #44
  • Jun 6, 2008 11:10pm Jun 6, 2008 11:10pm
yes, I agree. COG is a repainter. It is suspect from validity.
Gold lines might have a little better chance - if lookback is less than 5 bars.
Not a lot of trades likely. ...but hey. It was kind of fun doing one of these. The cog is vey pretty...The ebay folks would love this indicator.
  • #45
  • Jun 7, 2008 2:29am Jun 7, 2008 2:29am
hi , I wanna backtest this system , but the COG indicator covers only about 250bars in my chart and I wanna backtest this system for at least 6 months back and if I increase the bars_back variable , the indicator changes . anyone has this problem?
  • #46
  • Jun 7, 2008 7:51am Jun 7, 2008 7:51am
4xWeezal,

thanks for all your effort. Looking forward to testing it.
Personally, I like the COG filter.

Cheers
  • #47
  • Jun 7, 2008 8:31am Jun 7, 2008 8:31am
4xWheezal,

we may possibly want the option of following filter;

when the COG lines are heading up, take only Buy signals.
when the COG lines are heading down, take only Sell signals.

Thanks
  • #48
  • Jun 7, 2008 9:20am Jun 7, 2008 9:20am
probably required.
Also, appreciate the feeback. I like entry an exit signal assistance. That makes the ea work well.
Also,, If anyone asks for martingales and % of equity and "garbage" to mess up your ea functioning ..then I ask you call a professional coder. You want to concentrate on hit rate.
  • #49
  • Jun 7, 2008 10:21am Jun 7, 2008 10:21am
i like it . thank u!
  • #50
  • Jun 7, 2008 12:15pm Jun 7, 2008 12:15pm
AnneMarie (post 41),
Easy, just go to post number 1, and click on the indicator enroute posted, it will download to your computer. From there you can put it into your MT4. If you don’t know how to get an indicator into your MT4 platform, this is easy to remedy too: just go to youtube.com and type in “Secrets of MetaTrader Lesson 3: Installing Indicators”. Life is good and simple

Now for a question: endroute-- when you say EMA, is that Exponential Moving Average? Would you mind posting the 5/13 EMA indicator you are using?

Thanks, and great thread

Piperomia.
"Discipline is the key ingredient to Personal Freedom"
  • #51
  • Jun 7, 2008 1:07pm Jun 7, 2008 1:07pm

Thank you for your time. I really appreciate it!
  • #52
  • Jun 8, 2008 5:54am Jun 8, 2008 5:54am
Quoting piperomia
AnneMarie (post 41),
Easy, just go to post number 1, and click on the indicator enroute posted, it will download to your computer. From there you can put it into your MT4. If you don’t know how to get an indicator into your MT4 platform, this is easy to remedy too: just go to youtube.com and type in “Secrets of MetaTrader Lesson 3: Installing Indicators”. Life is good and simple

Now for a question: endroute-- when you say EMA, is that Exponential Moving Average? Would you mind posting the 5/13 EMA indicator you are using?

Thanks, and great thread

Piperomia.

All I use are the moving average indicators that come with metatrader, go to indictors trend and selece moving average, when you are setting up the MA Method as exponential
  • #53
  • Jun 8, 2008 6:04am Jun 8, 2008 6:04am
Quoting 4XWeezal
probably required.
Also, appreciate the feeback. I like entry an exit signal assistance. That makes the ea work well.
Also,, If anyone asks for martingales and % of equity and "garbage" to mess up your ea functioning ..then I ask you call a professional coder. You want to concentrate on hit rate.
For the most part I have just been using the next ma cross, using anything else limits your winners. I would not worry about the slope of the COG lines. Just trading the ema crosses after price has at leased crossed down below the bottom green line for longs and above the top green line for shorts is the way to go, just trading these signals last week would have give you over 2200 pips, this is with closing the trades at the next ema cross.
  • #54
  • Jun 8, 2008 7:53am Jun 8, 2008 7:53am
endroute,

thanks again for you nice and simple method.
Are you trading only the 1h TF?
What are the 9 pairs you are trading?

Cheers
  • #55
  • Jun 8, 2008 10:59am Jun 8, 2008 10:59am
Hi endroute,

thank's for posting this interesting system. Can I ask, what time a day do you trade this system?

I guess from London open to London close will be good with high volume.

How many pips a month do you make in average trading the 9 pairs?

Thank's for any input,

PC
Less is more...
  • #56
  • Jun 8, 2008 2:00pm Jun 8, 2008 2:00pm
doh! cant believe I didn't pick up on that... thanks.
I'm looking forward to the market opening up so i can give this system a try.
"Discipline is the key ingredient to Personal Freedom"
  • #57
  • Jun 8, 2008 6:46pm Jun 8, 2008 6:46pm
I trade most pairs on the 1hr but do trade some pairs on the 4hr. I trade the following on the 1hr

usdjpy
eurusd
eurjpy
nzdjpy
gbpjpy

and these on the 4 hr
usdcad
audusd
nzdusd
eurgbp

The great thing is this system allows you to track a number of pairs, because it is so easy to look for setups. I trade anytime I see a signal, so an EA would be great to just email you when there is a setup. I have been using an ma ea to email me ema crosses only but I only run it on a few charts as I would be getting a ton of alerts. On the pips per month question I make a very nice living trading and this is my primary system, I do also trade price action on longer tfs but with much less success. You have to remember success in primarily in the trader, for example if you go into a great setup and price goes against you for a bar or 2 you can't chicken out, trade the system.

I have to say I have been doing much better using the next ema cross as my exit as opposed to some other subjective approach like stochs, cci etc.
  • #58
  • Jun 8, 2008 7:16pm Jun 8, 2008 7:16pm
Hello endroute,

to your knowledge, will it make big difference if my broker's time
for a beginning of new day is 3 hrs earlier?

Thanks for all your help.
Let's hope that 4xWheezal will have the EA for us soon.
We should be able to use an EA for this mechanical method.

Cheers
  • #59
  • Jun 8, 2008 7:20pm Jun 8, 2008 7:20pm
Quoting Pluto2
Hello endroute,

to your knowledge, will it make big difference if my broker's time
for a beginning of new day is 3 hrs earlier?

Thanks for all your help.
Let's hope that 4xWheezal will have the EA for us soon.
We should be able to use an EA for this mechanical method.

Cheers
Broker time does not matter with this, your days will just begin and end differently, but should not affect where the bars are.
  • #60
  • Jun 8, 2008 9:16pm Jun 8, 2008 9:16pm
endroute,
if you are making good coin on this... you may want a professional coder. -
Also, if there are other coders go ahead on this.--- you may get it done quicker and better quality. Also, in my ea just written there were certain things not functioning properly (I can 't use some eas' as they are from private forums and the coder would not them released) so I will need to select another one off a public site and do a rewrite - it may be a little less robust but will fit your conditions of how you trade this particular strategy. There is plenty of time.
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