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4H 5EMA System

  • #241
  • Oct 17, 2008 7:01am Oct 17, 2008 7:01am
Quoting xluke
Hey all,

with full permission by Sterling i dare to present you here indicator 4H5EMA which should reflect Sterling's rules. I ask you to review whole thing and let me know your thoughts. I am ready to change anything according to your concerns.

Although I tried to be as precise as possible you my find some discrepancies. Main difference i found in last Sterling's comment. When he mentioned that if within 2 following bars proper reversal bar is not formed setup bar is canceled and whole process starts _after_ second improper reversal. Contrary I consider every bar.

Since I realized this today i present you indicator as is. If you want i can change it.

Be nice.


Lukas
is entry updated at the moment the second bar crosses the first one, or after it's closed? what are original rules? do we enter on the +5 pips of the second bar above the first one or after the close of the second bar?
  • #242
  • Oct 17, 2008 7:10am Oct 17, 2008 7:10am
Quoting jasius
is entry updated at the moment the second bar crosses the first one, or after it's closed? what are original rules? do we enter on the +5 pips of the second bar above the first one or after the close of the second bar?

I enter immediately when setup bar is closed and reverse bar fulfill the condition no matter if reversal bar is closed.

I suspect the original rules waits for reversal bar is closed. Can you confirm Sterling? I don't understand then how it works when reversal closes on the low and opens with small gap bellow (in case of short). We enter on market? We put pending sell according the plan and maybe wont enter at all? I dont know.
  • #243
  • Oct 17, 2008 7:53am Oct 17, 2008 7:53am
Quoting AlexL
Hi Sterling. When the trade is placed? After the reversal bar is closed or durring the reversal bar is opened and it's high is lower then setup bar's high(for a long position) / higher low then setup bar's low(for short)?
I think it would really help to look at a few charts on the first few pages. After the reversal bar closes you set the order to enter the market. If its a long setup you enter a buy stop and if a short you enter a sell stop. A long must break the high of the setup bar by 5 pips (plus a standard 3 pip spread on G/U). Hope this makes sense.

-Sterling
Founder of Day Trading Forex Live
  • #244
  • Oct 17, 2008 7:56am Oct 17, 2008 7:56am
Quoting xluke
I enter immediately when setup bar is closed and reverse bar fulfill the condition no matter if reversal bar is closed.

I suspect the original rules waits for reversal bar is closed. Can you confirm Sterling? I don't understand then how it works when reversal closes on the low and opens with small gap bellow (in case of short). We enter on market? We put pending sell according the plan and maybe wont enter at all? I dont know.
No you dont wait for reversal bar close. This system was designed so you only have to look at the market once every 4 hours. That being said, at the close of the setup bar you place the proper order to enter the market. Short or long.

-Sterling
Founder of Day Trading Forex Live
  • #245
  • Oct 17, 2008 8:08am Oct 17, 2008 8:08am
@ stersuhr;

I think I am complicating this strat. now. Please bear with me here. I enclosed a screenshot of GBPUSD, H4 on IBFx. As you can see from the chart we have a short setup bar...thanxs to xLuke for his hard work on the indicator...and I opened up a Sell stop, which was triggered by the reversal bar.

What I am having a hard time understanding is this reversal bar is also a new Buy Setup Bar, which the indicator isn't picking up. Do we close the open Sell order and open a Buy Stop order. Or do we just move the original open Sell orders SL to the high of the reversal bar/new Long Setup Bar?

Thanks in advance,

TimeFreedom
Attached Image (click to enlarge)
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  • #246
  • Oct 17, 2008 8:16am Oct 17, 2008 8:16am
from post #243 (http://www.forexfactory.com/showpost.php?p=2287262&postcount=243)

Quoting stersuhr
... After the reversal bar closes you set the order to enter the market....

-Sterling

I believe this is a typo and should read as :: "..After the setup bar closes..."
  • #247
  • Oct 17, 2008 8:16am Oct 17, 2008 8:16am
Quoting TimeFreedom
@ stersuhr;

I think I am complicating this strat. now. Please bear with me here. I enclosed a screenshot of GBPUSD, H4 on IBFx. As you can see from the chart we have a short setup bar...thanxs to xLuke for his hard work on the indicator...and I opened up a Sell stop, which was triggered by the reversal bar.

What I am having a hard time understanding is this reversal bar is also a new Buy Setup Bar, which the indicator isn't picking up. Do we close the open Sell order and open a Buy Stop order. Or do we just move the original open Sell orders SL to the high of the reversal bar/new Long Setup Bar?

Thanks in advance,

TimeFreedom
I can comment only from the position of the creator of the index. The authority here is Sterling. I designed the indicator so it should mark setup bar only when setup bar is persent (5pips break out) and reversal is present. And for that the bar is still missing higher high. I am considering to place there question mark sign (?) to indicate a possible setup.

But you are right. As far as i understood u should place your limit order now.
  • #248
  • Oct 17, 2008 12:39pm Oct 17, 2008 12:39pm
Quoting TimeFreedom
@ stersuhr;

I think I am complicating this strat. now. Please bear with me here. I enclosed a screenshot of GBPUSD, H4 on IBFx. As you can see from the chart we have a short setup bar...thanxs to xLuke for his hard work on the indicator...and I opened up a Sell stop, which was triggered by the reversal bar.

What I am having a hard time understanding is this reversal bar is also a new Buy Setup Bar, which the indicator isn't picking up. Do we close the open Sell order and open a Buy Stop order. Or do we just move the original open Sell orders SL to the high of the reversal bar/new Long Setup Bar?

Thanks in advance,

TimeFreedom
Yes you are correct...you take every signal. So in this case if the high of the setup bar is broken you exit the short and go long. This system does take a few smaller losers in a row when it gets choppy but it almost always catches the big winners because of this as well. What usually happens in any given month is a bunch of smaller winners and losers that pretty much even out, but what makes it so positive is the 3-4 huge 200+ pip runs it catches. In August for example one trade made more than 700 pips. This is also why every trade must be taken...you never know when the big run is going to be, but with this method you are amost sure to catch it.

-Sterling
Founder of Day Trading Forex Live
  • #249
  • Oct 17, 2008 12:42pm Oct 17, 2008 12:42pm
Quoting fx-char
from post #243 (\"http://www.forexfactory.com/showpost.php?p=2287262&postcount=243\")




I believe this is a typo and should read as :: \"..After the setup bar closes...\"
I still really dont understand the question? I re-read it the way you said to and got even more confused. Please re-read the rules and review some charts, a picture can do a better job than me telling you. If you still dont understand it, please ask again and I will be more than happy to send you some charts that are specific to your question.

-Sterling
Founder of Day Trading Forex Live
  • #250
  • Oct 17, 2008 12:43pm Oct 17, 2008 12:43pm
Quoting xluke
I can comment only from the position of the creator of the index. The authority here is Sterling. I designed the indicator so it should mark setup bar only when setup bar is persent (5pips break out) and reversal is present. And for that the bar is still missing higher high. I am considering to place there question mark sign (?) to indicate a possible setup.

But you are right. As far as i understood u should place your limit order now.
Thanks for all the effort xluke! Its much appreciated! Keep up the good work. I have absolutly no idea how to code a indicator or EA so what your doing is way beyond me, so thank you again

-Sterling
Founder of Day Trading Forex Live
  • #251
  • Oct 17, 2008 9:28pm Oct 17, 2008 9:28pm
i bet ronald raygun could make this ea.....
  • #252
  • Oct 18, 2008 12:31am Oct 18, 2008 12:31am
Quoting rbrtsha
i bet ronald raygun could make this ea.....
Me too

The largest problem I see with this system is what happens when the market ranges.
  • #253
  • Oct 18, 2008 12:35am Oct 18, 2008 12:35am
I have just started reading this thread and had had to start reading from the beginning. I must give Sterling a thanks from OZ land for sharing this system and helping a newbie to succeed.

I do have a question I hope that someone may be able to answer.

Any ideas on how to follow all rules of this system if you are away from your computer 9-5 Mon to Fri?
What you do is a reflection of you....what I do is a reflection of me.
  • #254
  • Oct 18, 2008 6:32am Oct 18, 2008 6:32am
Quoting Ezzy
I have just started reading this thread and had had to start reading from the beginning. I must give Sterling a thanks from OZ land for sharing this system and helping a newbie to succeed.

I do have a question I hope that someone may be able to answer.

Any ideas on how to follow all rules of this system if you are away from your computer 9-5 Mon to Fri?
Sorry...you need active participation at least every 4 hours with this strategy. But the participation only lasts for a few minutes each time period. If you can take a few minutes for breaks every 4 hours, maybe you can make this work for you. At least I hope so...this is a very nice strategy.

Good Trading!
  • #255
  • Oct 18, 2008 11:24am Oct 18, 2008 11:24am
Quoting Ronald Raygun
Me too

The largest problem I see with this system is what happens when the market ranges.

Your exactly right. Fortunatly the G/U dosent stay in really tight ranges for long. If the range is a few hundred pips it makes good money, its just when you have 50-100 pip ranges that screws you. But then again no system works in every type of market condition, or atleast ive never seen one. Would you be interested in making an EA for this. I would be will to pay if thats what you wanted.

-Sterling
Founder of Day Trading Forex Live
  • #256
  • Oct 18, 2008 11:28am Oct 18, 2008 11:28am
Quoting Ezzy
I have just started reading this thread and had had to start reading from the beginning. I must give Sterling a thanks from OZ land for sharing this system and helping a newbie to succeed.

I do have a question I hope that someone may be able to answer.

Any ideas on how to follow all rules of this system if you are away from your computer 9-5 Mon to Fri?
Hmm, all I can think of is an EA. Maybe Ronald will make one, we will see. You know all you have to do is look at the computer and adjust the trade...it only take a few minutes at max to do that. You could also do what I do, buy a phone that has internet and download the MT4 mobile on it and trade from that. Im not sure what your work is but thats an option. You could also have a trading buddy that has the 10AM and 2PM trade adjustment times free do it for you. Just a thought.

-Sterling Suhr
Founder of Day Trading Forex Live
  • #257
  • Oct 18, 2008 11:44am Oct 18, 2008 11:44am
Sterling if i have a possible setup bar (higher high and low then previous bar for short) that will become the actual setup bar if the next bar has a lower low then the possible setup bar and that bar will become the reversal bar?
Also you will enter trade when the reversal bar just made it's lower low then setup bar (at the same time the setup bar is confirmed) or you wait until the reversal bar closes and then place order acording to setup bar.
  • #258
  • Oct 18, 2008 7:10pm Oct 18, 2008 7:10pm
Quoting AlexL
Sterling if i have a possible setup bar (higher high and low then previous bar for short) that will become the actual setup bar if the next bar has a lower low then the possible setup bar and that bar will become the reversal bar?
Also you will enter trade when the reversal bar just made it's lower low then setup bar (at the same time the setup bar is confirmed) or you wait until the reversal bar closes and then place order acording to setup bar.
1.) Candle must go above/below the 5EMA by 5 pips for it to be concendered a setup bar

2.) A proper reversal bar has a lower high for a short or a higher low for a long.


3.) After a proper setup bar has been formed, price has to break the setup bars low by 5 pips for a short to be taken or break the setup bars high by 5 pips for a long position to be taken. In the case of a long entry you will need to include the spread in addition to the 5 pips above the high of the setup bar.

4.) In addition to the reversal bar making a lower low and a lower high than the setup bar, or in the case of a long, making a higher high and a higher low, it must also be within 2 bars following the setup bar. If a proper reversal bar does not follow the setup bar within 2 bars the trade is not taken, and you wait for a new setup bar.


5.) A proper setup bar must break the 5EMA by 5 pips or more to be considered for the trade. It must also touch either the lower 5EMA or the higher 5EMA, not both. If it does touch both it cannot be used as a setup bar.

-Sterling
Founder of Day Trading Forex Live
  • #259
  • Oct 18, 2008 7:46pm Oct 18, 2008 7:46pm
This system is like the synergy trading system which uses 5 smoothed ma on high and low and breakout from the channel to enter trade.

Its good trend follower though. But try smoothed instead of regular ema, it gives a much better slope and range channel.
  • #260
  • Oct 18, 2008 8:05pm Oct 18, 2008 8:05pm
Quoting dznmrd
This system is like the synergy trading system which uses 5 smoothed ma on high and low and breakout from the channel to enter trade.

Its good trend follower though. But try smoothed instead of regular ema, it gives a much better slope and range channel.
Ill give it a backtest and let the room know the results. Thanks for the suggestion.

-Sterling
Founder of Day Trading Forex Live
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