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EMA 25-50 Trading System (Detailed)

  • #1,801
  • Jul 2, 2008 5:26pm Jul 2, 2008 5:26pm
Interesting thread. But must say the last items about adding more indicators seem a bit overdone, I have looked at signals today during the London period of trading and seems to do ok at these times. Think what you need to remember is that there will always be false signals. I think if you introduce more indicators based on one pair it does not work for another or you introduce other issues.

I tend to use the Indicator for the pairs USD/JPY USD/CAD USD/CHF GBP/USD EUR/USD AUD/USD

Today on AUD/USD today between UK time 0800 and 1700 only had about 5 signals .. ok some may be false or whiplash ... but what you lose if you do those do not affect the main signals of day that picked up 50 pips

Only my view.. but some you win some you lose the trick is to take a loss when you know that you are in the bad trade also .. if I have a day where I get 50 to 100 pips on one pair ... I leave it for the day ..it will all still be there tomorrow .... good luck.
  • #1,802
  • Jul 2, 2008 5:49pm Jul 2, 2008 5:49pm
my target with this post is to develope a system that gives us a good risk reward ratio and a good win/loss ratio.

imho my MAAngle idea works well to cut false segnals.

and from 3 january 2008 to june 2008 it gave us +2850 pips of gain. That's 23.75 pips of gain for day and only on EURUSD...

that's pretty cool imho.

We really need the profit calculator, then we can start making the EA
  • #1,803
  • Jul 2, 2008 9:46pm Jul 2, 2008 9:46pm
Quoting Corre
The indicator we're adding is this

http://www.forexfactory.com/attachme...id=19839&d=Jan

Set it to
5 (period)
1 (exponential)
angle threshold to 1.5

and there you have your 5period EMA's slope indicator.

then we also have the problem that sometime the 5EMA, which is far faster than the 25one, tends to create "new" false segnals.
So we use again the MAAngle indicator and this time we set the indicator this way

25 period
1 exponential
angle threshold 0.9

Long enter:
EMA_25_Indicator shows a Green-up cross
MAAngle 5 is green
MaAngle 25 is green

Short enter
red-down cross
Both MAAngle are red.

this way we cut out almost 50% of false segnals from january 2008.

I have also another idea with Bollinger Bands that could help us (the bandwidth application I mean). I'll let you know when it's ready to be added
care to post the graph???

sonic
  • #1,804
  • Jul 3, 2008 3:37am Jul 3, 2008 3:37am
Quoting Corre
The indicator we're adding is this

http://www.forexfactory.com/attachme...id=19839&d=Jan

Set it to
5 (period)
1 (exponential)
angle threshold to 1.5

and there you have your 5period EMA's slope indicator.

then we also have the problem that sometime the 5EMA, which is far faster than the 25one, tends to create "new" false segnals.
So we use again the MAAngle indicator and this time we set the indicator this way

25 period
1 exponential
angle threshold 0.9

Long enter:
EMA_25_Indicator shows a Green-up cross
MAAngle 5 is green
MaAngle 25 is green

Short enter
red-down cross
Both MAAngle are red.

this way we cut out almost 50% of false segnals from january 2008.

I have also another idea with Bollinger Bands that could help us (the bandwidth application I mean). I'll let you know when it's ready to be added
Hi Corre, thanks for the information.
Guys, don't worry, I am not changing the original indicator, just adding Corre's logic to a duplicated version to see what the results are.
I will update you once I have something - the weeked is comming so I finally might have the time.
  • #1,805
  • Jul 3, 2008 3:59am Jul 3, 2008 3:59am
Quoting Corre
We really need the profit calculator, then we can start making the EA
That's true... with it ready and working, it would be a lot easier to compare any eventual performance change.

Quoting ronmatzkin
Guys, don't worry, I am not changing the original indicator, just adding Corre's logic to a duplicated version to see what the results are.
I will update you once I have something - the weeked is comming so I finally might have the time.
OK, it's better that way... you give it a try and "feel" the changes, then come back and share what you think
  • #1,806
  • Jul 3, 2008 8:34am Jul 3, 2008 8:34am
Quoting ronmatzkin
I am not changing the original indicator, just adding Corre's logic to a duplicated version to see what the results are.
Yes, this is the perfect solution. I have just tested it manually on the EURUSD H1; I really don't know how it's going to come out with different charts
  • #1,807
  • Jul 3, 2008 8:58am Jul 3, 2008 8:58am
hi I added manually the suggested parameters, ok worked for EUR/USD.. but from memory ... I dont think it looked so hot on USD/JPY......... but I am new to MT and this/these systems.... I am not 100 pct sure that I added the new parameters correctly ..
  • #1,808
  • Edited 12:20pm Jul 3, 2008 12:04pm | Edited 12:20pm
stoooop! rewind

forget about the MA Angle idea, I started working on the whole indicator and I found 2 things that would help us greatly:

1) RSI 14. Long if >60 Short if < 40. Not 50

2) MACD 12,26,9. but now we take care of the signal line too. the long signal is if the segnal line is under the "silver" histogram, the short segnal comes when the segnal line is up the silver bars.

we can "transform" the top of the silver bars into a line like this:

1) open the navigator window on the left of the chart
2) drag the "moving average" into the MACD windows
3) set a SMA like this:
Period: 1
Method: Simple
Apply to: Previous Indicator Data

Now simply put Silver color to None and you have just the 2 lines

So, if the red line is up the new SMA we short; if it's below we long.

EMA indicator always set at 25 and SL/TP=50

I know my english is poor. If something isn't clear, tell me.

This indicator is starting to work pretty well
  • #1,809
  • Jul 8, 2008 2:16pm Jul 8, 2008 2:16pm
Quoting Corre
stoooop! rewind

forget about the MA Angle idea, I started working on the whole indicator and I found 2 things that would help us greatly:

1) RSI 14. Long if >60 Short if < 40. Not 50

2) MACD 12,26,9. but now we take care of the signal line too. the long signal is if the segnal line is under the "silver" histogram, the short segnal comes when the segnal line is up the silver bars.

we can "transform" the top of the silver bars into a line like this:

1) open the navigator window on the left of the chart
2) drag the "moving average" into the MACD windows
3) set a SMA like this:
Period: 1
Method: Simple
Apply to: Previous Indicator Data

Now simply put Silver color to None and you have just the 2 lines

So, if the red line is up the new SMA we short; if it's below we long.

EMA indicator always set at 25 and SL/TP=50

I know my english is poor. If something isn't clear, tell me.

This indicator is starting to work pretty well
What if the RSI IS 50 and the MACD is red line up ........ which signal takes priority ... if its the MACD why have the RSI ?
  • #1,810
  • Jul 9, 2008 3:41am Jul 9, 2008 3:41am
Quoting Corre
stoooop! rewind

forget about the MA Angle idea, I started working on the whole indicator and I found 2 things that would help us greatly:

1) RSI 14. Long if >60 Short if < 40. Not 50

2) MACD 12,26,9. but now we take care of the signal line too. the long signal is if the segnal line is under the "silver" histogram, the short segnal comes when the segnal line is up the silver bars.

we can "transform" the top of the silver bars into a line like this:

1) open the navigator window on the left of the chart
2) drag the "moving average" into the MACD windows
3) set a SMA like this:
Period: 1
Method: Simple
Apply to: Previous Indicator Data

Now simply put Silver color to None and you have just the 2 lines

So, if the red line is up the new SMA we short; if it's below we long.

EMA indicator always set at 25 and SL/TP=50

I know my english is poor. If something isn't clear, tell me.

This indicator is starting to work pretty well
Just to make sure...
Long: Instead of using MACD > 0 we check that the MACD main (grey histogram) is above the MACD signal.
Short: Instead of using MACD < 0 we check that the MACD main (grey histogram) is below the MACD signal.

Is that correct?

Also - which pairs did you use for the testing and which time frame.
  • #1,811
  • Jul 9, 2008 4:37am Jul 9, 2008 4:37am
The opposite, we short when MACD (main, grey histogram) is below signal line.

we long when signal line is below macd grey histogram.

let's try it, if it doesn't work we can always change something.

I'm working on EURUSD H1 chart.
  • #1,812
  • Jul 9, 2008 6:29am Jul 9, 2008 6:29am
THREAD LINK
"One Grows Tall After Walking Through A Forest Of Tall Trees."
  • #1,813
  • Jul 9, 2008 7:06am Jul 9, 2008 7:06am
Quoting Corre
The opposite, we short when MACD (main, grey histogram) is below signal line.

we long when signal line is below macd grey histogram.

let's try it, if it doesn't work we can always change something.

I'm working on EURUSD H1 chart.
Here is Indicator with Corre's change
Attached File(s)
File Type: mq4 EMA_25_Indicator.mq4   26 KB | 504 downloads
  • #1,814
  • Jul 9, 2008 7:09am Jul 9, 2008 7:09am
Quoting ronmatzkin
Here is Indicator with Corre's change
Attachment
Read the remarks in the beginning of the file to find out more...
  • #1,815
  • Jul 9, 2008 7:18am Jul 9, 2008 7:18am
Hi,
Did anybody test the performance of ATR based SL vs Fixed SL (Let's say, 50)?
  • #1,816
  • Jul 9, 2008 1:39pm Jul 9, 2008 1:39pm
Quoting ronmatzkin
Hi,
Did anybody test the performance of ATR based SL vs Fixed SL (Let's say, 50)?
Well, can't say I have tested one against the other.
But since the beginning I'm demo-testing ATR for both SL and TP, only because it seems natural: if different pairs move differently (have different ATR), they should have different SL/TP... ATR based seems logical.
I use period = 24 (to represent 24h of movement).

I've been thinking of the possibility to introduce this in the code (because as it is, I have to manually change the SL/TP to ATR value, from time to time).

By the way, any advance in the profit calculator? I think there's no better way to compare methods, timeframes and pair performance
  • #1,817
  • Jul 9, 2008 9:16pm Jul 9, 2008 9:16pm
ronmatzkin, one question:
In the implemented logic of the indicator, it isn't possible for it to give more than one quarter's TP signal in each candle?
Meaning, if the current signal is (for example) long, and at some point we have a very long up candle, it only shows us one TP signal, even if the candle is more than twice the size of our TP, and will only show the next TP signal at the opening of the next candle, even if that one develops into a down candle?
If so, is it something possible to change in the code, or is there a limitation in the coding itself?
  • #1,818
  • Jul 10, 2008 5:04am Jul 10, 2008 5:04am
I tried to implement a TP using ATR (as you did for SL) in your code, but I must be doing it wrong, it doesn't seem to work as it's suppose to.

Other thing I notice in V1.5 (using ATR for SL):
It's not moving the SL as you enter into the quarters' zone; meaning for example if you're long and you hit the 1st quarter, the SL should become the entry point (break-even), but it's not - you see the candles penetrate beyond the entry point and not trigering the signal.
So it will give you a yellow cross only when the entry's SL is hit... compromising the results

Can you take a look at these 1, 2... maybe 3 last questions I've posted?
  • #1,819
  • Jul 10, 2008 6:02am Jul 10, 2008 6:02am
Quoting tonirai
Well, can't say I have tested one against the other.
But since the beginning I'm demo-testing ATR for both SL and TP, only because it seems natural: if different pairs move differently (have different ATR), they should have different SL/TP... ATR based seems logical.
I use period = 24 (to represent 24h of movement).

I've been thinking of the possibility to introduce this in the code (because as it is, I have to manually change the SL/TP to ATR value, from time to time).

By the way, any advance in the profit calculator? I think there's no better way to compare methods, timeframes and pair performance
Unfortunately I do not have time for the profit calculator right now but I have added an ATR based SL to the code?
What is the logic of the TP based on ATR?
  • #1,820
  • Jul 10, 2008 6:03am Jul 10, 2008 6:03am
Quoting tonirai
ronmatzkin, one question:
In the implemented logic of the indicator, it isn't possible for it to give more than one quarter's TP signal in each candle?
Meaning, if the current signal is (for example) long, and at some point we have a very long up candle, it only shows us one TP signal, even if the candle is more than twice the size of our TP, and will only show the next TP signal at the opening of the next candle, even if that one develops into a down candle?
If so, is it something possible to change in the code, or is there a limitation in the coding itself?
I think it is possible to change the code to support multiple TP in one bar - I will try to do that.
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