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4H 5EMA System

  • #281
  • Oct 20, 2008 2:56am Oct 20, 2008 2:56am
Thanks Allli, I am wondering however, if the candle reverses an goes the wrong way and does not end up being a reversal bar. Thanks
What you do is a reflection of you....what I do is a reflection of me.
  • #282
  • Oct 20, 2008 3:01am Oct 20, 2008 3:01am
By the way Allli, is the long entry that you are talking about, a result of the hit of the last stop loss. Thanks
What you do is a reflection of you....what I do is a reflection of me.
  • #283
  • Oct 20, 2008 3:14am Oct 20, 2008 3:14am
Quoting Ezzy
By the way Allli, is the long entry that you are talking about, a result of the hit of the last stop loss. Thanks
Please see Sterlings last chart and explanation. Also consult the rules and the chart before that one

BTW, if you have a post and click edit, there is no need for 2 posts in a row....
  • #284
  • Oct 20, 2008 3:19am Oct 20, 2008 3:19am
Cheers Allli
What you do is a reflection of you....what I do is a reflection of me.
  • #285
  • Edited 5:31am Oct 20, 2008 5:11am | Edited 5:31am
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.
Quoting stersuhr
Ill give it a backtest and let the room know the results. Thanks for the suggestion.

-Sterling
5 SMA better than 5 EMA ?

We have to do quick check every 4 hours, so we have to wake up in the middle of the night to check it ? That is quite tough
  • #286
  • Oct 20, 2008 5:51am Oct 20, 2008 5:51am
Lol...J84_2....A good trader is like a pirate...ahrrrr....You have to learn to "sleep with one eye open"......or at least have a loud alarm clock...
  • #287
  • Oct 20, 2008 6:35am Oct 20, 2008 6:35am
Quoting stersuhr
I thought I would post the daily chart from friday and bring us current. There have been no trade after #16...we are still long from 1.7281 with are stop at 1.7150. We are only up +39 pips for the month which sucks but as ive said before this system takes 3-4 big trades a month and that is what makes it so positive. As of right now we have only gotten 1 of those so I suspect the odds of the rest coming soon are rising. Anyway here are the trades you should have in the market. As always the red candle is the setup bar and the blue is the reversal. Right now there are no setup bars so the only other order is the order to go short if we get stopped out. Remember if the candle touches both EMA's it cannot be used for a setup bar.

Trade #16 - long from 1.7281

Stop loss - 1.7150

Trade #17
Sell stop - 1.7150

Sell stops stop loss -1.7389


-Sterling
On the chart after the reversal bar (blue arrow) there is a doji bar, could you explain why it does not qualify as a set up bar.

If it did qualify, a short would have been triggered 2 bars after that
Regards
  • #288
  • Oct 20, 2008 8:42am Oct 20, 2008 8:42am
Quoting maxss280
I read you guys were wanting an EA for this system. I created one but according to the rules for the system this EA doesn't seem to be profitable all the time. I think there is some more that will need to be coded for this EA to work profitably.

**Removed EA** Some serious Logic errors still existed will post V1.2 when it is completed. Should be tomorrow.
I rewrote the logic it is now cleaner and as far as I can tell no bugs. Still the EA would need some additional work to be profitable.

Thanks for the great system Ster
Attached File(s)
File Type: mq4 4HR5EMASystemV1.2.mq4   9 KB | 633 downloads
  • #289
  • Oct 20, 2008 8:52am Oct 20, 2008 8:52am
I guess I should explain some of the EA settings also

CloseOrder - set to false when trading but in theory should beable to set this to true during live trading to close all open trades for shutdown. However, not tested.

Lots - Lots size

MaxRisk - Max Risk per trade ex. 0.02 only use 2% of account for purchase of lots.

PipsPastSignal - Pips past the signal High or Low to Initiate Reversal Bar Trade.

PipsPastSL - Pips past the Signal Bar for Buy/SellStop and the SL for that order.

PipsPastEMA - Pips past the EMA for a valid Signal Bar

EMAPeriod - The Period for the EMA

MAGICNUMBER - the Unique number for the orders of the EA
  • #290
  • Edited 9:50am Oct 20, 2008 9:50am | Edited 9:50am
@ Maxss280;

Unfortunately your EA is missing a lot of trades when I run a backtest.

TimeFreedom

Quoting maxss280
I rewrote the logic it is now cleaner and as far as I can tell no bugs. Still the EA would need some additional work to be profitable.

Thanks for the great system Ster
  • #291
  • Oct 20, 2008 11:11am Oct 20, 2008 11:11am
Thank you for sharing this trading system. I have read the whole thread but still would need some clarification about rules:

1. I have question about trade number 4 (sell stop at 1.7783) in post #23. The original Entry rule 5 in post #1 says: "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" However, The setup bar of trade 4 does not touch the higher 5EMA? There is same situation with trade number 8.

2. I don't understand you answer to xlukes's question in post #243. You say "After the reversal bar closes..." should it be "After the setup bar closes..." ?

3. Where we start look for valid setup bar in situation where we have possible setup bar but two reversal bars after it fails? Should we start look next valid setup bar just after the failed setup bar or after the two failed reversal bars?
  • #292
  • Oct 20, 2008 12:34pm Oct 20, 2008 12:34pm
@ TimeFreedom

I'm not sure what trades your refering too but if you send me a screenshot I will gladly take a look
Quoting TimeFreedom
@ Maxss280;

Unfortunately your EA is missing a lot of trades when I run a backtest.

TimeFreedom
  • #293
  • Oct 20, 2008 12:47pm Oct 20, 2008 12:47pm
@ pokasaha
Hopefully this answers your questions.

Quoting pokasaha
Thank you for sharing this trading system. I have read the whole thread but still would need some clarification about rules:

1. I have question about trade number 4 (sell stop at 1.7783) in post #23. The original Entry rule 5 in post #1 says: \"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\" However, The setup bar of trade 4 does not touch the higher 5EMA? There is same situation with trade number 8.

On trade no.4 in that post the setup bar is two bars ahead of the reversal bar. The tail that drops down off that bar or the (Low) touches the 5ema high.

2. I don't understand you answer to xlukes's question in post #243. You say \"After the reversal bar closes...\" should it be \"After the setup bar closes...\" ?

In that answer it is refering to the Buystop or the Sellstop which changes the direction of the trade. For example after the reversal bar completes we would open a buystop or sell stop in the opposite direction so if our stoploss is hit it will fire off the new order in the opposite direction. I hope this makes since.

3. Where we start look for valid setup bar in situation where we have possible setup bar but two reversal bars after it fails? Should we start look next valid setup bar just after the failed setup bar or after the two failed reversal bars?

I believe that we must consider every bar as a possible signal bar. To follow the system. Someone please correct me if I am wrong.
  • #294
  • Oct 20, 2008 1:05pm Oct 20, 2008 1:05pm
Quoting howard
On the chart after the reversal bar (blue arrow) there is a doji bar, could you explain why it does not qualify as a set up bar.

If it did qualify, a short would have been triggered 2 bars after that
It was not a setup bar because the bar before it made the highest high and was the current setup bar. I will be back in about an hour to answer all the other questions and post the chart of the day. Right now we are in a short from 1.7365 and the trade before it was closed for around +100 pips as well. I will give an exact update for the month and current trades when I get back.

-Sterling
Founder of Day Trading Forex Live
  • #295
  • Oct 20, 2008 1:29pm Oct 20, 2008 1:29pm
Thank you for post.

1. I have question about trade number 4 (sell stop at 1.7783) in post #23. The original Entry rule 5 in post #1 says: \"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\" However, The setup bar of trade 4 does not touch the higher 5EMA? There is same situation with trade number 8.

On trade no.4 in that post the setup bar is two bars ahead of the reversal bar. The tail that drops down off that bar or the (Low) touches the 5ema high.

ok, I understood that the setup bar is one pointed by the red up arrow, but it is ok now.


2. I don't understand you answer to xlukes's question in post #243. You say \"After the reversal bar closes...\" should it be \"After the setup bar closes...\" ?

In that answer it is refering to the Buystop or the Sellstop which changes the direction of the trade. For example after the reversal bar completes we would open a buystop or sell stop in the opposite direction so if our stoploss is hit it will fire off the new order in the opposite direction. I hope this makes since.

Ok, that makes sense. Thanks.
  • #296
  • Oct 20, 2008 3:51pm Oct 20, 2008 3:51pm
Quoting pokasaha
Thank you for post.

1. I have question about trade number 4 (sell stop at 1.7783) in post #23. The original Entry rule 5 in post #1 says: \\"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\\" However, The setup bar of trade 4 does not touch the higher 5EMA? There is same situation with trade number 8.

On trade no.4 in that post the setup bar is two bars ahead of the reversal bar. The tail that drops down off that bar or the (Low) touches the 5ema high.

ok, I understood that the setup bar is one pointed by the red up arrow, but it is ok now.


2. I don't understand you answer to xlukes's question in post #243. You say \\"After the reversal bar closes...\\" should it be \\"After the setup bar closes...\\" ?

In that answer it is refering to the Buystop or the Sellstop which changes the direction of the trade. For example after the reversal bar completes we would open a buystop or sell stop in the opposite direction so if our stoploss is hit it will fire off the new order in the opposite direction. I hope this makes since.

Ok, that makes sense. Thanks.
1.) On trade #4 the setup bar is the bar with the red arrow pointing at it. The bar before it that comes down and touches the high EMA has nothing to do with that trade. If price opens, closes, and never touches the higher EMA as is the case with this trade it dosent matter. The rules state that it has to go threw a EMA by 5 pips, so if its above it but not touching it, its still threw it even though its not touching it and thus was a valid setup bar for a short. Poka answered the number 2 correctly.

3.) Question number three needs a little more clarification. Once a setup bar has been made, say a long setup bar. In this case it breaks the lower EMA by 5 pips or more. When that bar closes you place your buy stop 5 pips above the high + the spread. After the next bar closes and it dosent trigger it then you give it one more bar to do it. If 2 bars following the setup bar the trade is not triggered it is cancelled. The third bar is now the setup bar if it is still below the 5 EMA by 5 pips or atleast goes down and goes 5 pips below it. The process goes on until a trade is triggered. After trade #16 on the last page you have an example of this. Also the reversal bar on trade #16 becomes a setup bar to go short when it closed, but a short was never triggered at that time.

But what if in the case of a long setup bar the market keeps making lower lows and never triggering your buy stop. Well each progressive lower bar becomes the setup bar and that continues until a trade is triggered. I hope all this makes sense, if not ask and ill try to explain it better.

-Sterling
Founder of Day Trading Forex Live
  • #297
  • Oct 20, 2008 4:09pm Oct 20, 2008 4:09pm
Well as of the close of trade #15 we were only +39 pips for the month. Right now we are +123 pips and that does not include the short we are in now which is up +225 pips. I really hope we dont get a reversal bar here, i think we will see more downside, but the beauty to this system is there is no thinking only hard rules. Last week we had a nice short that I thought was going to keep running but didnt, it then gave us a signal to go long which we made some good money on to, so I guess either way the system made money. Anyway im done rambling on, heres the chart for the day with a current pip count and the current orders that you should have in the market. Happy trading!

-Sterling

Trade #16 +84 pips

Trade #17 - Short from 1.7365. The trade is currently up +225 or so pips. And if the stop is hit we will lock in another + 97 pips. As I said I really feel like it has some more downside and think we will see that. I feel like we can get 300+ pips from this one, but follow the rules and if a long signal is given, take it.

Stop loss - 1.7268

Potential Trade #18 -

Buy stop - 1.7268

Buy stops stop loss - 1.7098


-Sterling
Attached Image (click to enlarge)
Click to Enlarge Name: trade #16,#17,#18.gif Size: 52 KB
Founder of Day Trading Forex Live
  • #298
  • Oct 20, 2008 5:23pm Oct 20, 2008 5:23pm
Hi Sterling:

I have a question about rule #2.

What happens if the bar after the set up bar makes a lower low (for a long) but also triggers your buy stop for the setup bar?? It's kind of a stupid question because you would already be in the trade...but where does the SL go in this scenario?? Would it be below the reversal bar that triggered your buy stop on the setup bar??

Could you explain rule#2 in more detail?? Thanks

Keep up the good work....

Greg



Quoting stersuhr
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
  • #299
  • Oct 20, 2008 5:49pm Oct 20, 2008 5:49pm
Quoting batesmotel
Hi Sterling:

I have a question about rule #2.

What happens if the bar after the set up bar makes a lower low (for a long) but also triggers your buy stop for the setup bar?? It's kind of a stupid question because you would already be in the trade...but where does the SL go in this scenario?? Would it be below the reversal bar that triggered your buy stop on the setup bar??

Could you explain rule#2 in more detail?? Thanks

Keep up the good work....

Greg
Being that you only look at the market every 4 hours there is nothing you can do about this senario. I guess I dont have a written rule for moving the stop in this case. The way I backtested it was, if the market made a lower low and also triggered the buy I moved the stop 5 pips below the new candle when it closed. Yes this does make the setup bar the reversal bar, but this system works because of support and resistance. Clearly if the market made a lower low and bounced off a certain price that is now the new support so you would want your stop 5 pips below that to protect you to the downside. It would also protect you from being stopped out of the trade because you didnt give it enough room. I hope this makes sense and that was a very good question not stupid at all.

-Sterling
Founder of Day Trading Forex Live
  • #300
  • Oct 20, 2008 6:00pm Oct 20, 2008 6:00pm
I guess the only way around the scenario of the setup bar being taken out by an invalid reversal bar is to set up an alert to warn you that the set bar's low has been breached....then you could eliminate the setup bar's validity....Does that make sense??

Lol....so much for a sound 4 hour sleep...it's back to sleeping with 1 eye open again...

Greg
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