Hi everyone,
First time poster, long time reader. I have been trading for a few years now and often read through Forexfactory for ideas, etc. This is my first attempt at posting a system I am working on so bear with me.
This is a work in progress so any help in fine-tuning it is very much appreciated. I hope that together we can build something that will make us all money. However, criticism without ideas is not welcome as it does not further the progress.
So here we go:
I call it the MACD Restack. It is fairly complicated so will require an EA to be written once we work out the details (I can program the EA unless someone else wants to volunteer).
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Currency:
EUR/USD or GBP/USD (This is up for discussion... more importantly is to find a trending pair. One way of doing this may be to only use currencies that have 4 hour "rythym" as discussed in the 4 Hour MACD system).
Indicators:
- MACD - Fast EMA - 7; Slow EMA - 15; MACD - 5 ; add levels 0.00, 0.001, and -0.001)
(We could use a different trend indicator - any suggestions?)
Time Frame: H4 (Again up for debate.)
-No trade the day of NFP and major holidays.
(If we change the timeframe we may want to include specific trading hours instead of going 24/5)
Enter Long - MACD Value > Signal Value
Enter 4 pips plus spread above high of closed indicator candle
Enter Short - MACD Value < Signal Value
Enter 4 pips below closed indicator candle
TP Long - Take the low of the indicator candle or previous candle whichever is lower and subtract 4 pips. The difference between that value and the entry value is the take profit distance. If MACD reverses and trade is in profit, close trade.
TP Short - Take the high plus spread of the indicator candle or previous candle whichever is lhigher and add 4 pips. The difference between that value and the entry value is the take profit distance. If MACD reverses and trade is in profit, close trade.
SL - None. If trade is not in profit and MACD reverses, then a stop loss is placed at the new reverse entry price. This becomes a stop and reverse order. (see money management rules for new entry size). If price does not reach this new SL/entry and MACD reverses again than that SL and new entry are cancelled.
No entry - If price does not reach entry price and MACD reverses than reset.
Money Management: Here is where the system gets powerful, complicated, and risky if we aren't careful. Lots are calculated so that each trade shoots to make 1/2% above high balance watermark. What I mean, is that if a trade closes on a stop and reverse and loses lets say 1/4%, the next trade's lot size will need to be increased an amount so as to make up the 1/4% lost plus make 1/2%. This is similar to a Martingale system except that the new lot values are based off making 1/2% of the high watermark balance rather than just doubling up on every loss. There are multiple scenarios... for instance, trade #1 could lose .36% meaning the next trade is shooting to make .86%. The next trade could lose 1.5% meaning the following trade is shooting to make (1.5%+.86%+.36%+0.5%) 3.22%. In the testing in April I did, it never lost more than twice in a row....but lets imagine in our current example it does. Lets say the next trade loses 3.22%, now we are shooting to make (3.22%+1.5%+.86%+.36%+0.5%) 6.44%. We are currently drawn down 5.94%. In my April 22-May 23 test the highest drawdown came on May 17-18th, down 2.275% on two losing trades. However, we will have to talk about absolute stop-losses, phasing down the additional entries, etc depending on our risk appetite. If I was confident enough, with a reasonable amount of personal money I'd be willing to go 5 or 6 losing trades deep. But depending on our risk appetite we may consider only going 3 or 4 trades deep.
Anyway, those are my thoughts. I hope it isn't too complicated and that there are some of you out there interested in working on it with me.
First time poster, long time reader. I have been trading for a few years now and often read through Forexfactory for ideas, etc. This is my first attempt at posting a system I am working on so bear with me.
This is a work in progress so any help in fine-tuning it is very much appreciated. I hope that together we can build something that will make us all money. However, criticism without ideas is not welcome as it does not further the progress.
So here we go:
I call it the MACD Restack. It is fairly complicated so will require an EA to be written once we work out the details (I can program the EA unless someone else wants to volunteer).
---------------------------------------------------------------------
Currency:
EUR/USD or GBP/USD (This is up for discussion... more importantly is to find a trending pair. One way of doing this may be to only use currencies that have 4 hour "rythym" as discussed in the 4 Hour MACD system).
Indicators:
- MACD - Fast EMA - 7; Slow EMA - 15; MACD - 5 ; add levels 0.00, 0.001, and -0.001)
(We could use a different trend indicator - any suggestions?)
Time Frame: H4 (Again up for debate.)
-No trade the day of NFP and major holidays.
(If we change the timeframe we may want to include specific trading hours instead of going 24/5)
Enter Long - MACD Value > Signal Value
Enter 4 pips plus spread above high of closed indicator candle
Enter Short - MACD Value < Signal Value
Enter 4 pips below closed indicator candle
TP Long - Take the low of the indicator candle or previous candle whichever is lower and subtract 4 pips. The difference between that value and the entry value is the take profit distance. If MACD reverses and trade is in profit, close trade.
TP Short - Take the high plus spread of the indicator candle or previous candle whichever is lhigher and add 4 pips. The difference between that value and the entry value is the take profit distance. If MACD reverses and trade is in profit, close trade.
SL - None. If trade is not in profit and MACD reverses, then a stop loss is placed at the new reverse entry price. This becomes a stop and reverse order. (see money management rules for new entry size). If price does not reach this new SL/entry and MACD reverses again than that SL and new entry are cancelled.
No entry - If price does not reach entry price and MACD reverses than reset.
Money Management: Here is where the system gets powerful, complicated, and risky if we aren't careful. Lots are calculated so that each trade shoots to make 1/2% above high balance watermark. What I mean, is that if a trade closes on a stop and reverse and loses lets say 1/4%, the next trade's lot size will need to be increased an amount so as to make up the 1/4% lost plus make 1/2%. This is similar to a Martingale system except that the new lot values are based off making 1/2% of the high watermark balance rather than just doubling up on every loss. There are multiple scenarios... for instance, trade #1 could lose .36% meaning the next trade is shooting to make .86%. The next trade could lose 1.5% meaning the following trade is shooting to make (1.5%+.86%+.36%+0.5%) 3.22%. In the testing in April I did, it never lost more than twice in a row....but lets imagine in our current example it does. Lets say the next trade loses 3.22%, now we are shooting to make (3.22%+1.5%+.86%+.36%+0.5%) 6.44%. We are currently drawn down 5.94%. In my April 22-May 23 test the highest drawdown came on May 17-18th, down 2.275% on two losing trades. However, we will have to talk about absolute stop-losses, phasing down the additional entries, etc depending on our risk appetite. If I was confident enough, with a reasonable amount of personal money I'd be willing to go 5 or 6 losing trades deep. But depending on our risk appetite we may consider only going 3 or 4 trades deep.
Anyway, those are my thoughts. I hope it isn't too complicated and that there are some of you out there interested in working on it with me.
