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4H 5EMA System

  • #161
  • Oct 11, 2008 9:21am Oct 11, 2008 9:21am
Hey Sterling

Can you look at the chart that I have provided to confirm that what I am doing is correct.

I was in a short trade on this pair at candle #2

I trailed my stop loss to 5 pips above candle #3, this was also a valid setup candle so I began looking for a reversal candle.

no reversal came and I was stopped out at candle #7

So i do not have a trade open at this time but candle #8 is a valid setup candle and I do have a buy order 5 pips above the high.

My question is should I have trailed my stop down to candle #4 which would have then been stopped out at candle #5 and then started looking for a setup candle?
Attached Image (click to enlarge)
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  • #162
  • Oct 11, 2008 11:20pm Oct 11, 2008 11:20pm
Quoting earret
Hey Sterling

Can you look at the chart that I have provided to confirm that what I am doing is correct.

I was in a short trade on this pair at candle #2

I trailed my stop loss to 5 pips above candle #3, this was also a valid setup candle so I began looking for a reversal candle.

no reversal came and I was stopped out at candle #7

So i do not have a trade open at this time but candle #8 is a valid setup candle and I do have a buy order 5 pips above the high.

My question is should I have trailed my stop down to candle #4 which would have then been stopped out at candle #5 and then started looking for a setup candle?
You got it all right until #6. 3 made a setup bar but 4 and 5 failed to make a higher high to trigger your buy stop. So 6 should be your new setup bar. Remember that if a trade isnt triggered with 2 bars of the setup bar you cancel that trade and look for the next, so number 6 would be your new setup bar. Hope this helps.

-Sterling
Founder of Day Trading Forex Live
  • #163
  • Oct 11, 2008 11:20pm Oct 11, 2008 11:20pm
Quoting Hiranya
I have been looking at this system and so far this is one of the best systems that i have seen on this fourm. It is so easy the baby on the e-trade commercials could trade this system using his blackberry phone. I have back tested all systems that i like and all i have to say is hell of a good job stersuhr. I will love to make BIG PIPS with this system for any one that polled this system as a NO you should really learn to trade this system, if you could not trade this you should find a new job or listen to what every one has to say about how to trade. I my self am a newbie and this is a great system for newbies. Again great job on this one and thanks..I do have to say that it was a little scared to leave the trade in for the weekend for a newbie but as i look in the past i wish that i would of. Anyone that follows the system is going to make some good pips. I will be following all rules as of monday so i will post my trades on this tread. I am going to injoy trading with every one trading this system.. good luck to all and happy trading this monday...
Thanks for the kind words and I look forward to trading with you as well.

-Sterling
Founder of Day Trading Forex Live
  • #164
  • Oct 12, 2008 2:54pm Oct 12, 2008 2:54pm
Hi Sterling,

I have been following your thread since its beginning. Needless to say how impressed am I by your system -- very well defined and should really take the emotion out.

I am planning to start trading using the 4H 5EMA system, and I hope you wouldn't mind answering my questions(surely there will be some, even tho the rules seem now quite clear to me). My timezone is GMT+2, so the candles will be a bit different, but anyway the system should work for me too.

My question: for a small account of $ 2K, what max amount you recommend to put on a single trade with the system?

Again, many thanks for sharing your system!

PS: I am a software developer, having access to historical DB. As the system is well defined, this inspires me to develop a backtest against different pairs, using smaller timeframes (accumulated to 4H bars for improved fairness when determining possible stop out). Of course, this would take me some time.
  • #165
  • Edited 4:22pm Oct 12, 2008 4:21pm | Edited 4:22pm
Stersuhr

Price is now 1.7141 i guess we go long since a sell position was stopped out. Or what is your take
LISTEN TO MR FUNDAMENTAL AND MR TECHNICAL
  • #166
  • Oct 12, 2008 4:25pm Oct 12, 2008 4:25pm
Quoting fx-char
Hi Sterling,

I have been following your thread since its beginning. Needless to say how impressed am I by your system -- very well defined and should really take the emotion out.

I am planning to start trading using the 4H 5EMA system, and I hope you wouldn't mind answering my questions(surely there will be some, even tho the rules seem now quite clear to me). My timezone is GMT+2, so the candles will be a bit different, but anyway the system should work for me too.

My question: for a small account of $ 2K, what max amount you recommend to put on a single trade with the system?

Again, many thanks for sharing your system!

PS: I am a software developer, having access to historical DB. As the system is well defined, this inspires me to develop a backtest against different pairs, using smaller timeframes (accumulated to 4H bars for improved fairness when determining possible stop out). Of course, this would take me some time.
Sounds good I would love to see a backtest of some other pairs. Although I dont think you should strictly go off backtests its a good start. With 2K i would recommend trading no more than 1 mini lot (10,000). This should give plunty of room for any draw down. I trade 1 standard lot for every 20K in my account and that is plunty safe.

-Sterling
Founder of Day Trading Forex Live
  • #167
  • Oct 12, 2008 5:23pm Oct 12, 2008 5:23pm
sterling

I am still in a short with my stop at 1.7187 and its not looking good...is this what you have?

I have also decided not to post any demo trades with eur/jpy until i get comfortable with your rules.

Am I correct in saying that you do not move your stop loss until you have a setup candle?

Mike
  • #168
  • Oct 12, 2008 5:30pm Oct 12, 2008 5:30pm
Trade #7
-223 pips

Trade #8 if triggered
Bought at market open 1.7128
Stop loss - 1.6846

Sorry this siganl is about 10 pips late but in this system 10 pips is not much. The red arrow is the setup and the blue is the reversal.

-Sterling
Attached Image (click to enlarge)
Click to Enlarge Name: trade #6.gif Size: 49 KB
Founder of Day Trading Forex Live
  • #169
  • Oct 12, 2008 5:56pm Oct 12, 2008 5:56pm
sterling

I guess the last candle with the red arrow on my chart is the set up bar since it breeched the 5 EMA high. Thus are sell stop would be at 1.6846. Confirm if I am right.
Attached Image (click to enlarge)
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LISTEN TO MR FUNDAMENTAL AND MR TECHNICAL
  • #170
  • Oct 12, 2008 6:15pm Oct 12, 2008 6:15pm
Sterling

I get it, we a buy on opening price since are sell was stopped out.
From your chart Alpari UK and US have the same 4 hr candle periods.Good.
LISTEN TO MR FUNDAMENTAL AND MR TECHNICAL
  • #171
  • Oct 12, 2008 6:32pm Oct 12, 2008 6:32pm
Quoting okehiedon
Sterling

I get it, we a buy on opening price since are sell was stopped out.
From your chart Alpari UK and US have the same 4 hr candle periods.Good.
Yup you got it right. The closing bar on friday was the setup bar and as soon as the market opened it triggered a buy.

-Sterling
Founder of Day Trading Forex Live
  • #172
  • Edited 8:48pm Oct 12, 2008 8:33pm | Edited 8:48pm
Quoting stersuhr
We are currently short from 1.6920 with are stop at 1.7186.

Trade #1 -106 pips
Trade #2 -147 pips
Trade #3 +131 pips
Trade #4 -45 pips
Trade #5 +192 pips
Trade #6 -126 pips
Trade #7 pending

For the week we are negative -101 pips. Not a bad drawdown, but not a good week by any means. Ive never had a negative month in the last year with this system and I dont think its going to start now. By the end of Oct this system WILL be in positive pips. Please feel free to quote that last sentence Nov 1st

-Sterling
Trade #7 closed for -223 pips. The month is early, waiting for the month to turn positive. -324 for the month. Still not a bad drawdown for any system. It will turn around. We are currently long from 1.7128

-Sterling
Founder of Day Trading Forex Live
  • #173
  • Edited Oct 13, 2008 1:01am Oct 12, 2008 8:58pm | Edited Oct 13, 2008 1:01am
Trade #8
Long from 1.7128 with stop at 1.6846

The opening candle made a setup bar to got short so we now put a sell stop in the market.
Trade #9
Sell stop - 1.7054
Stop loss - 1.7154

-Sterling
Founder of Day Trading Forex Live
  • #174
  • Oct 12, 2008 10:18pm Oct 12, 2008 10:18pm
Quoting stersuhr
Trade #8
Long from 1.7128 with stop at 1.6846

The opening candle made a setup bar to got short so we now put a sell stop in the market.
Trade #9
Sell stop - 1.7054
Stop loss - 1.7154

-Sterling
Trade #8 closed for a -74 pip loss. Trade #9 is nicely in profit. Hope this is the start to a good run of trades. I think this system has had its drawdown. This would be a good time to start trading it if someone hasent started yet.

-Sterling
Founder of Day Trading Forex Live
  • #175
  • Oct 13, 2008 1:02am Oct 13, 2008 1:02am
Quoting stersuhr
Trade #8
Long from 1.7128 with stop at 1.6846

The opening candle made a setup bar to got short so we now put a sell stop in the market.
Trade #9
Sell stop - 1.7054
Stop loss - 1.7154

-Sterling
Trade #8
Stop loss - 1.7100

Trade #9
Buy stop - 1.7100
Stop loss - 1.6860
Founder of Day Trading Forex Live
  • #176
  • Oct 13, 2008 2:05am Oct 13, 2008 2:05am
Quoting stersuhr
Trade #8
Stop loss - 1.7100

Trade #9
Buy stop - 1.7100
Stop loss - 1.6860
Trade #8 -28 pips. Trade #9 triggered and is up 50 pips for the time being.

-Sterling
Founder of Day Trading Forex Live
  • #177
  • Edited 4:31am Oct 13, 2008 3:44am | Edited 4:31am
I am not in a trade, but would like to clarify this:
- if a long position was open at 1.7109 (5 pips above HI + 4 spread for me) for the bar @ 13 Oct 04:00, then when the current(last) bar closes, and if it close at approx. the current level(1.7146) should the Stop/Loss be moved 5 pips below the LO (curr. 1.6986) of the last bar?

Thanks.

There was a similar post(#161 (http://www.forexfactory.com/showpost.php?p=2274300&postcount=161) ) but I just want to clarify this state.
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  • #178
  • Oct 13, 2008 12:10pm Oct 13, 2008 12:10pm
Sterling,

I think I got the answer, and S/L should not be moved:

Quote
... So you have a proper setup bar form and then you have a reversal bar make a lower low and a lower high so now your in the trade. At the close of the reversal bar you put a buy stop order in the market at the exact price your stop is at. This is true with every trade long or short. Once your in any trade and the reversal bar CLOSES you put that order in.
  • #179
  • Oct 13, 2008 12:45pm Oct 13, 2008 12:45pm
Quoting stersuhr
Trade #8 -28 pips. Trade #9 triggered and is up 50 pips for the time being.

-Sterling
Was that two longs in a row? Did I miss something?
Sterling,
Thank You for all you do, you are a great communicator. My problem is I need to get a demo account that changes candles when you do. Will someone recommend?
I use IBFX, Crown, and ODL and if I am understanding the system correctly, it actually did a lot better lately using the closing times that those have in common.
Also, I love the challenge you threw out. Worse case, you pay $300 for three more great systems.
Thanks
Michael
  • #180
  • Oct 13, 2008 12:52pm Oct 13, 2008 12:52pm
Michael

Alpari UK will give you the same time change.

Mike




Quoting alllivemind
Was that two longs in a row? Did I miss something?
Sterling,
Thank You for all you do, you are a great communicator. My problem is I need to get a demo account that changes candles when you do. Will someone recommend?
I use IBFX, Crown, and ODL and if I am understanding the system correctly, it actually did a lot better lately using the closing times that those have in common.
Also, I love the challenge you threw out. Worse case, you pay $300 for three more great systems.
Thanks
Michael
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