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Spud's PVX Method

  • #1
  • First Post: Edited 1:08pm Feb 16, 2007 12:46pm | Edited 1:08pm
This method owes it's origins to the Vegas 1 Hr indicator and the Pouria method.

The method listed uses a 5 Lot money management system to maximize rewards.
For those wanting to be a bit more conservative, you can adjust the lot size to 2 lots and I will explain later.

I wanted to make this system mechanical, so everything is taken at the close/open of a candle. You can optimize it by sitting and watching it, but the benefits or penalties will be small.

The Set Up
-----------
EURUSD (others may work but not verified yet)
H1 chart
5 EMA on close (I use yellow)
Vegas 1 Hr indicator (attached)

Target Profits
-------------
10 pips + spread (so 13 pips) 5 Lots (sell 1 lot when hit by price)
Vegas F1 4 Lots (sell 1 lot when hit by price)
---------------------------------------------< 2 Lot method
Vegas F2 3 Lots (sell 1 lot when hit by price)
Vegas F3 2 Lots (sell 1 lot when hit by price)
5 EMA Crossover 1 Lot (sell when hit by price)
---------------------------------------------< 5 Lot Method

Stop Loss
---------
You want no more than 50 pips. If you have deep pockets you can use the opposite F1 in the Vegas. In 5 months I hit 50 pips/the F1 once. 30 Pip stop loss if you are tight on money will see you through most trades.
We always stop if the 5 EMA retraces or recrosses the Vegas tunnel at the close of a candle. Take your loss and move on.

Entry
-----
On open or close of candle when 5 EMA crosses Vegas 1 Hr tunnel and the MA line is definitely across the tunnel....don't cheat or you'll screw yourself. You may even want to give it 2-3 pips, but make sure you see the 5 EMA line across the tunnel...I cannot emphasize that enough! Working on the close or open of a candle assures you of no fake outs.

Vegas 1 Hr
----------
Use defaults...Risk Model 1.
Attached File(s)
File Type: mq4 Vegas1hr.mq4   6 KB | 1,240 downloads
  • #2
  • Feb 16, 2007 1:01pm Feb 16, 2007 1:01pm
thanks for posting this system. will definitely take a look and analyze this weekend.

Quoting Spudfyre
This method owes it's origins to the Vegas 1 Hr indicator and the Pouria method.

On average this method will net you 1200 pips per month including the spread if you use the 5 lot money management method. My worst draw down over 5 months was 175 pips...that may sound like a lot but your risk reward is about 1:2.
For those wanting to be a bit more conservative, you can adjust the lot size to fit your budget in several ways which I will explain.

1200 pips per month is too good to be true? Back test it and then forward test it is all I write before you rain down on me and tell me 1200 pips is way out there in crazy crazy land.

I wanted to make this system mechanical, so everything is taken at the close/open of a candle. You can optimize it by sitting and watching it, but the benefits or penalties will be small.

The Set Up
-----------
EURUSD (others may work but not verified yet)
H1 chart
5 EMA on close (I use yellow)
Vegas 1 Hr indicator (attached)

Target Profits
-------------
10 pips + spread (so 13 pips) 5 Lots (sell 1 lot when hit by price)
Vegas F1 4 Lots (sell 1 lot when hit by price)
Vegas F2 3 Lots (sell 1 lot when hit by price)
Vegas F3 2 Lots (sell 1 lot when hit by price)
5 EMA Crossover 1 Lot (sell when hit by price)

Stop Loss
---------
You want no more than 50 pips. If you have deep pockets you can use the opposite F1 in the Vegas. In 5 months I hit 50 pips/the F1 once. 30 Pip stop loss if you are tight on money will see you through most trades.
We always stop if the 5 EMA retraces or recrosses the Vegas tunnel at the close of a candle. Take your loss and move on.

Entry
-----
On open or close of candle when 5 EMA crosses Vegas 1 Hr tunnel and the MA line is definitely across the tunnel....don't cheat or you'll screw yourself. You may even want to give it 2-3 pips, but make sure you see the 5 EMA line across the tunnel...I cannot emphasize that enough! Working on the close or open of a candle assures you of no fake outs.

Vegas 1 Hr
----------
Use defaults...Risk Model 1.
  • #3
  • Feb 16, 2007 1:05pm Feb 16, 2007 1:05pm
If your like me, putting 5 lots down is a bit much, so to start out easy.

Trade only 2 lots and chase 10 pips and the F1 line.

Out of 27 forward trades 18 were successful (66.7%)
Net gain 416 pips.

Open trade when 5 EMA crosses Vegas tunnel, sell 1 lot when the trade nets you 10 pips net. Put 10 pips in your bank.

Close the trade when the the price hits the F1 line (selling it 1 or 2 pips early isn't a bad idea). You will find on average you are up 20 pips. Put it in the bank.

Set your stop loss to 30 or stop the trade on a 5 EMA recross. On average you'll drop about 18 pips.
  • #4
  • Feb 16, 2007 1:43pm Feb 16, 2007 1:43pm
5 Lots...that's a lot. I think I'd rather put 6 lots on the safe system them use this, but it is worth a look and some number crunching. It takes advantage of the big wins and the risk reward is pretty good, but it's only about 25% successful, which can be hard on the emotional state.

A typical good trade (25% success)
Open 5 Lots when EMA crosses the vegas tunnel. Sell 1 lot when you net 10 pips.
Sell 1 lot when you reach the Vegas F1 line.
You gained 20 pips on your the 10 pip'r and 10 pips on the F1 so you have in your pocket 30 pips. On paper you have another 60 pips with your 3 lots remaining.

You now have a 37% chance to hit the F2 line. 90% of the time your stop loss required from here will be under 25...so you may want to move it up.

If you hit the F2 line, your 3 Lots x on average 45 pips = 135 pip gain. If you sell 1 lot you are now up 75 pips in the bank.

You now have a 25% chance of hitting the F3 line. 85% of the time the stop required will be under 25 pips...so you may want to move it up.

If you hit the F3 line your 2 Lots x on average 80 pips = 160 pip gain. Not bad considering at this point you are pretty much risking nothing from your previous gains. That's 155 pips in the bank.

Ok, now the riskiest of the 5. Here you are likely to lose very little. If you want to pull out early, sell if the 5 EMA cross is lower than your entry. Ride the wave and you can easily net 100+ pips. Doesn't always happen but if you are aware of your entry and your price you can come out on top.
Odds of making money on the crossover are 25% on a true crossover where you wait for a candle to close. If you intervene you can easily pump that up to whatever you want.

All the percentages are based on 5 months of statistics all done by hand. You will be surprised how tight these numbers stick to each other, especially the F3 pips.

Making the big pips.....
Well most of the time you will hit F1 and gain 30 pips. Look at the 68% to F1 line. You will find huge opportunity here as this almost always gets hit. That usually is around 15-20 pips.
1. Target 5 Lots at 15 pips and you'll be rolling in the pips and win more than you lose.
2. Target 68% to the F1 line and you'll do a little better.
3. Aim for the F1 but keep your eyes on things and you will be doing even better.
4. If your a risk taker...go for the F3 and watch it. This can be a long ride, but worth some big pips.

Up to the F1 line you can use Martingale Money Management to eliminate the losers as the odds of 2 losses in a row are really rare. You will find your win rate up over 90% this way and well ahead for any 2 in a row losers.

That's what the stats say. Take a look and number crunch. I'm sure we can optimize this even more.
  • #5
  • Feb 16, 2007 1:45pm Feb 16, 2007 1:45pm
Spudfyre,
Thanks for an interesting method. I have a question. If you are long 5 lots and the 5EMA closes > F1 and then closes < F1 would you exit all remaining lots and end the trade or rely on the stop?
  • #6
  • Feb 16, 2007 1:48pm Feb 16, 2007 1:48pm
Hi, thank you for sharing your system, looks promising. I know about pouria, but not too much about the tunnel method, so I'll take a look at it. having said that.
i know this is a basic question, but when you say trade 5 lots and going out step by step, 1 lot at a time. How can you do that? is there any way of enter one trade and take partial profits on the go? or you need to enter 5 trades at the same moment and close it when you reached partial goals?
i always hear about this procedures but never know what they refer to...
Once again, thanks for your willingness to share your method, I''ll do my best to contribute...

Regards
  • #7
  • Feb 16, 2007 1:58pm Feb 16, 2007 1:58pm
Quoting drayco
Spudfyre,
Thanks for an interesting method. I have a question. If you are long 5 lots and the 5EMA closes > F1 and then closes < F1 would you exit all remaining lots and end the trade or rely on the stop?
Once the 5 EMA crosses the tunnel use price for target profits.

I wouldn't worry about the 5 EMA wiggling back and forth across the F1 as it will do that. The main concern is if the 5 EMA crosses the Vegas tunnel. In that case, get out of the trade and enter the new trade. Obviously you are in a better position if the 5 EMA is over the F1...that would be worth a study as it might improve the F2 odds.
  • #8
  • Feb 16, 2007 2:07pm Feb 16, 2007 2:07pm
Quoting toti1972
Hi, thank you for sharing your system, looks promising. I know about pouria, but not too much about the tunnel method, so I'll take a look at it. having said that.
i know this is a basic question, but when you say trade 5 lots and going out step by step, 1 lot at a time. How can you do that? is there any way of enter one trade and take partial profits on the go? or you need to enter 5 trades at the same moment and close it when you reached partial goals?
i always hear about this procedures but never know what they refer to...
Once again, thanks for your willingness to share your method, I''ll do my best to contribute...

Regards
The way I have to trade it is open 5 trades of 1 lot each. Some brokers I think will let you sell off partial lots if you open a trade of 5 lots...mine won't. So basically as I hit each target I sell one trade of 1 Lot.
If I know I'm going to sell 2 lots at F1, I'll open a trade with 2 lots and one trade with 1 Lot for the 10 pips.
In this method you can also stagger your trades by 3-5 pips and enter some a little early and some a little later. You can also stagger your Stop Losses this way as well. Always amazing what a few pips can do to you, especially around the 00's.
  • #9
  • Feb 16, 2007 2:39pm Feb 16, 2007 2:39pm
Hi Spudfyre,

Isn't this same as 1 hour tunnel itself. You buy when 12SMA crosses the tunnel, instead of 5EMA. Am I missing something.

thanks.
Haste not to Enter AND Haste not to Exit !-TradeStar
  • #10
  • Edited 3:28pm Feb 16, 2007 3:05pm | Edited 3:28pm
Looks promising .....I think pouira alone is not very profitable.

take care !
  • #11
  • Feb 16, 2007 4:22pm Feb 16, 2007 4:22pm
Quoting TradeStar
Hi Spudfyre,

Isn't this same as 1 hour tunnel itself. You buy when 12SMA crosses the tunnel, instead of 5EMA. Am I missing something.

thanks.
Yes not much difference. The 5 EMA is more responsive than the 12 EMA. The only thing I wanted to show was the statistics and a money management system to go with it.
  • #12
  • Feb 16, 2007 4:37pm Feb 16, 2007 4:37pm
Quoting ut2DaMax
Looks promising .....I think pouira alone is not very profitable.

take care !
Pouria on EURUSD is quite good. I just found it better when I glued Vegas 1 Hr with it. In fact you can trade Pouria much the same way as I mention here with EURUSD on an M30 chart and have really good results.

The only thing I noticed statistically was that the 5 EMA stuck on the Vegas 1 Hr was better than either system by itself. Taking the small pips as suggested in Pouria is an opportunity to grab some pips so you can chase the F1, F2, F3 lines.

What I wanted to present here was that statistically using the 5 EMA on Vegas 1 Hr seems like a good way to make some pips, so thought I'd share it and perhaps we can make it better still.

Obviously there is some quantitative truth to MA crossovers and finding just the right MA's, target profits and stop losses is the key to making great pips. Sidus, Pouria, Vegas, 3/13/39 all work to some extent but none are yet the best. Studying all of these to statistical death and mixing and matching systems so far has yielded that this 5 EMA/Vegas is producing the best results.

I also prefer a dry mechanical system where there is no wiggle room that will vary entry and exit. It should give you room for error without drastic results and the ability to recover from losers should result in a net gain without mortgaging the farm. Sorry I'm rambling.
  • #13
  • Feb 21, 2007 8:03am Feb 21, 2007 8:03am
we are about to get a possible cross on EUR/USD, I think is the first opp to try since the beginning of this tread.
but the cross is due to a major release. Is it a valid cross anyway? how long should we wait till trigger the order?
Can you Spud provide some guidance in this one?
Thanks
  • #14
  • Feb 21, 2007 8:35am Feb 21, 2007 8:35am
Just thought I'd toss in my use of the Vegas 1hr here..

I was actually using my own tunnel before incorporating the fib levels for Vegas and came up with this hybrid.

Instead of his tunnel of 144 and 169 I use only a 62EMA with a +10 and -10 levels attached. I then ZERO out the color of the ema so that I only see the levels. This gives you a 20 pip tunnel based on the 62. If you look at the Vegas tunnel and this one you will notice that entries occur on the same days but earlier when using the 62EMA.

With this I also use a 12 SMA. The 5EMA with this tunnel would be too low to be a useful filter. With the 12 I wait for a cross and look at the price action - if the price is obviously coming back down (retracing) when the 12 crosses I wait for the price to start moving back up and then enter.

5 lots is way too rich for what my trading account size would be like. Instead I would trade only 2 lots - taking profit at the first level (which is typically around 40 pips depending on when you enter) and then letting the second ride until an opposing signal is generated. Move your stop to break even on the second once you take profit on the first.

I've been watching this on the cable , jpy and swiss but in theory this should regardless of the pair. One note though, with smaller moving pairs like the AUDUSD you'll need to modify the vegas levels for your first take profit, otherwise it'll be too far out (I had to change the code to allow for a level for pairs like this).

In my picture the RSI was just something I was playing with and using to scrunch up the screen. For some reason I've grown accustomed to looking at smaller viewing areas for the trading data..

Jason
Attached Image
  • #15
  • Feb 21, 2007 8:38am Feb 21, 2007 8:38am
Vegas tunnel is the green and blue line right?i check my E/U chart and noticed that 5EMA seldom crossed the tunnel.
  • #16
  • Feb 21, 2007 8:40am Feb 21, 2007 8:40am
Quoting jlowder
Just thought I'd toss in my use of the Vegas 1hr here..

I was actually using my own tunnel before incorporating the fib levels for Vegas and came up with this hybrid.

Instead of his tunnel of 144 and 169 I use only a 62EMA with a +10 and -10 levels attached. I then ZERO out the color of the ema so that I only see the levels. This gives you a 20 pip tunnel based on the 62. If you look at the Vegas tunnel and this one you will notice that entries occur on the same days but earlier when using the 62EMA.

With this I also use a 12 SMA. The 5EMA with this tunnel would be too low to be a useful filter. With the 12 I wait for a cross and look at the price action - if the price is obviously coming back down (retracing) when the 12 crosses I wait for the price to start moving back up and then enter.

5 lots is way too rich for what my trading account size would be like. Instead I would trade only 2 lots - taking profit at the first level (which is typically around 40 pips depending on when you enter) and then letting the second ride until an opposing signal is generated. Move your stop to break even on the second once you take profit on the first.

I've been watching this on the cable , jpy and swiss but in theory this should regardless of the pair. One note though, with smaller moving pairs like the AUDUSD you'll need to modify the vegas levels for your first take profit, otherwise it'll be too far out (I had to change the code to allow for a level for pairs like this).

In my picture the RSI was just something I was playing with and using to scrunch up the screen. For some reason I've grown accustomed to looking at smaller viewing areas for the trading data..

Jason
good information!would mind to share your modified vegas's indicator?
  • #17
  • Feb 21, 2007 7:07pm Feb 21, 2007 7:07pm
Quoting amenlo9
good information!would mind to share your modified vegas's indicator?
Sure, no problem.

Just remember that you have to manually add a 62 EMA with levels of +10 and -10 to get the tunnel. In the indicator now I have the 62 EMA blanked out (you can change that in the settings) so you won't see it. If I could figure out how to add levels via MT4 I'll fix that.

Risk Model 2 has been modified for pairs like USDAUD.

Jason
Attached File(s)
File Type: mq4 Vegas Currency Daily 1 Hour.mq4   6 KB | 684 downloads
  • #18
  • Feb 22, 2007 12:10am Feb 22, 2007 12:10am
Quoting jlowder
Sure, no problem.

Just remember that you have to manually add a 62 EMA with levels of +10 and -10 to get the tunnel. In the indicator now I have the 62 EMA blanked out (you can change that in the settings) so you won't see it. If I could figure out how to add levels via MT4 I'll fix that.

Risk Model 2 has been modified for pairs like USDAUD.

Jason
thanks for sharing it.how to add a 62EMA with level +10 and -10?i don't understand this part
  • #19
  • Feb 22, 2007 7:53am Feb 22, 2007 7:53am
Quoting amenlo9
thanks for sharing it.how to add a 62EMA with level +10 and -10?i don't understand this part
When you add the EMA onto your chart, there is a tab that says "levels". Click on that and then click on the add button. Enter 10, click Add and enter -10 in the second box.

Jason
  • #20
  • Feb 22, 2007 2:57pm Feb 22, 2007 2:57pm
Quoting jlowder
When you add the EMA onto your chart, there is a tab that says "levels". Click on that and then click on the add button. Enter 10, click Add and enter -10 in the second box.

Jason
thanks Jason.i will try it later
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