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4H 5EMA System

  • #341
  • Oct 22, 2008 2:43am Oct 22, 2008 2:43am
very impressive!!
bj
BJ
  • #342
  • Oct 22, 2008 3:24am Oct 22, 2008 3:24am
Sterling,
How often do we get a trade this good? Does it happen on a regular basis or is this the biggest winning trade ever because the markets are crazy? I could grow to like this once a month!
  • #343
  • Oct 22, 2008 4:10am Oct 22, 2008 4:10am
Quoting stersuhr
When price breaks the lower EMA your looking for a buy, when price breaks the higher EMA your looking for a sell. The arrows are only pointing to the reversal bar and setup bar and they indicate nothing more than that.

1.) The setup bar makes the lowest low and is followed up by a bar that breaks the setup bars high. You buy when the reversal bar breaks the setup bars high by 5 pips. You have to include spread on a buy so you should place a buy stop 8 pips (that includes my spread) above the setup bars high. Inital stop 5 pips below the low of the setup bar. Trade played out as follows.

Buys stop - 1.8531
Stop loss - 1.8452

Took profit at 1.8561 when a signial to go short was given. +30 pips

2.) Setup bar breaks the higher 5 EMA by well over 5 pips and is followed by a reversal bar that breaks its low.

Sell stop - 1.8561
Stop loss - 1.86675

Took profit at 1.8413 when a signal to go long was given. +148 pips

3.) This is kinda unfortunate that there was a buy signal given but rules are rules. My broker opened up after the weekend at 1.8278

Buy stop - 1.8413
Stop loss - 1.8327

My broker opened up after the weekend at 1.8278 which was below my stop and therefore triggered my stop loss at that price. -135 pips

4.) Since you were stopped out when price opened on sunday you should reverse your trade at that price. Remember the rules state that you should have a order to go the other way at your stop loss. The stop on this trade was very big and is not a usual stop. It is only because the market gapped down so far. On a reversal trade like this stop are to be place above the highs in the previous trade (in the case of a short) if you were long they would be placed below the lows of the previouos trade.

Shorted when market opened at - 1.8278
Stop loss -1.8474

Took profit when a buy signal was given at 1.8065. +213 pips
Stersur,

since you've modified the rules about holding a trade over the weekend i guess trade #3 made here should not be considered right? Just going over the whole thread again and found out this previous message you posted.

PS: I'm predicting this post is gonna net more replies than the 4HR MACD, anyone wanna bet on that?
Less is more...
  • #344
  • Oct 22, 2008 5:53am Oct 22, 2008 5:53am
just double checking with anyone who is still here, the current bar is a reversal bar, right? therefore, we should be long at the moment.

thanks
What you do is a reflection of you....what I do is a reflection of me.
  • #345
  • Edited 6:34am Oct 22, 2008 5:59am | Edited 6:34am
this is reverse bar,? did you close short and are you long? correct entry 1,6436
SL low reverse bar + 5 + spread and also now there also sell stop?
colud you please answer my comments is oh key?
my entry at 1,6384 wasnot certainly correct, I tried only go to demo trading
bj
Attached Image (click to enlarge)
Click to Enlarge Name: 5.png Size: 68 KB
BJ
  • #346
  • Oct 22, 2008 6:08am Oct 22, 2008 6:08am
Gee.... I hope I haven't messed up (ooops!!) As far as I can read my chart, the last closed bar (bullish) was the new set up bar. Therefore I placed a buy stop 8 pips above it..... and it got hit by the current bar, so I guess I am long.
What you do is a reflection of you....what I do is a reflection of me.
  • #347
  • Oct 22, 2008 6:22am Oct 22, 2008 6:22am
I thought we would not enter into a long until price goes 5 pips beyond the high of the current setup bar at 1.6563.




Quoting Ezzy
Gee.... I hope I haven't messed up (ooops!!) As far as I can read my chart, the last closed bar (bullish) was the new set up bar. Therefore I placed a buy stop 8 pips above it..... and it got hit by the current bar, so I guess I am long.
  • #348
  • Oct 22, 2008 6:22am Oct 22, 2008 6:22am
Hi Stursuhr,

the only part of this system that is giving me greif is stop moving,
any chance you could formalise a set of rules to explain how you do this?

and of course posting them at the begining

thanks,
Steve.
  • #349
  • Oct 22, 2008 6:36am Oct 22, 2008 6:36am
The setup bar is still the one shown with an arrow on my chart.

NO LONGS YET

If the current 4h bar closes without triggering the buy stop at the top of the setup bar, then the shown setup bar will be invalid and we will look for a new setup bar.
Attached Image (click to enlarge)
Click to Enlarge Name: gu 4h.gif Size: 18 KB
Regards
  • #350
  • Oct 22, 2008 6:46am Oct 22, 2008 6:46am
The same applies to EJ if any one is following it

If the current bar closes without triggering the buy stop, it will become the new setup bar
Attached Image (click to enlarge)
Click to Enlarge Name: ej 4h.gif Size: 11 KB
Regards
  • #351
  • Oct 22, 2008 6:59am Oct 22, 2008 6:59am
Quoting howard
The setup bar is still the one shown with an arrow on my chart.

NO LONGS YET

If the current 4h bar closes without triggering the buy stop at the top of the setup bar, then the shown setup bar will be invalid and we will look for a new setup bar.
Howard,

Why would you still put your setup bar two bars away from the current one? When you have another bar meeting the same requirement as the previous i.e. at least 5 pips below the 5-EMA in this case, you move on to the next bar making it the setup bar and if the bar after it doesn't pan out to be the reversal bar you are waiting for you make it also your new setup bar AS LONG AS it penetrates the low of the 5-EMA otherwise you wait two more bars to see if the trade reverses and if it doesn't, you start looking for a new setup bar all over again.

Besides, consider the profit you would have lost if you use the bar in your picture as the setup bar.

Presently, we should be going long as indicated on the pix file attached.
Attached Image (click to enlarge)
Click to Enlarge Name: 11.JPG Size: 77 KB
Less is more...
  • #352
  • Oct 22, 2008 7:01am Oct 22, 2008 7:01am
Quoting howard
The setup bar is still the one shown with an arrow on my chart.

NO LONGS YET

If the current 4h bar closes without triggering the buy stop at the top of the setup bar, then the shown setup bar will be invalid and we will look for a new setup bar.
green is reversal bar?-A proper reversal bar has a higher low for a long.

set up bar- Candle must go below the 5EMA by 5 pips for it to be concendered a setup bar - why last bar isnt set up bar?

thx for answer
BJ
  • #353
  • Oct 22, 2008 7:22am Oct 22, 2008 7:22am
Quoting ajantala
Howard,

Why would you still put your setup bar two bars away from the current one? When you have another bar meeting the same requirement as the previous i.e. at least 5 pips below the 5-EMA in this case, you move on to the next bar making it the setup bar and if the bar after it doesn't pan out to be the reversal bar you are waiting for you make it also your new setup bar AS LONG AS it penetrates the low of the 5-EMA otherwise you wait two more bars to see if the trade reverses and if it doesn't, you start looking for a new setup bar all over again.

Besides, consider the profit you would have lost if you use the bar in your picture as the setup bar.

Presently, we should be going long as indicated on the pix file attached.
IMHO you guys are using different broker, that closes 4H bars in different time zones. Therefore on the chart provided by Howard the condition is not met, while on your it is....
  • #354
  • Oct 22, 2008 7:23am Oct 22, 2008 7:23am
According to Rule 5, green candle does not qualify as a setup bar. "It must also touch either the lower 5EMA or the higher 5EMA, not both."

My green candle (from 00:00 CST) fails to touch the lower 5EMA (it is fully below it) so if we are going strictly by the rules it does not qualify. The next candle (04:00 CST) does qualify as a setup bar, and so when it closes I will be looking to jump in long if price goes above its high by 8 pips.
  • #355
  • Oct 22, 2008 7:41am Oct 22, 2008 7:41am
Quoting ajantala
Howard,

Why would you still put your setup bar two bars away from the current one? When you have another bar meeting the same requirement as the previous i.e. at least 5 pips below the 5-EMA in this case, you move on to the next bar making it the setup bar and if the bar after it doesn't pan out to be the reversal bar you are waiting for you make it also your new setup bar AS LONG AS it penetrates the low of the 5-EMA otherwise you wait two more bars to see if the trade reverses and if it doesn't, you start looking for a new setup bar all over again.

Besides, consider the profit you would have lost if you use the bar in your picture as the setup bar.

Presently, we should be going long as indicated on the pix file attached.
The next bar on my chart has not made a lower low so it cannot be a setup bar, it could have been a reversal bar if it had broken the top of setup bar by 5 pips but it did not
Regards
  • #356
  • Oct 22, 2008 7:43am Oct 22, 2008 7:43am
Quoting brainjt
green is reversal bar?-A proper reversal bar has a higher low for a long.

set up bar- Candle must go below the 5EMA by 5 pips for it to be concendered a setup bar - why last bar isnt set up bar?

thx for answer
As it did not make a lower low than the last valid setup bar
Regards
  • #357
  • Oct 22, 2008 7:46am Oct 22, 2008 7:46am
Quoting killertrader
According to Rule 5, green candle does not qualify as a setup bar. \"It must also touch either the lower 5EMA or the higher 5EMA, not both.\"

My green candle (from 00:00 CST) fails to touch the lower 5EMA (it is fully below it) so if we are going strictly by the rules it does not qualify. The next candle (04:00 CST) does qualify as a setup bar, and so when it closes I will be looking to jump in long if price goes above its high by 8 pips.

If a candle is fully below the 5ema low it is still considered as having gone below the ema by the min requirement of 5 pips so it can be a valid setup bar for this purpose,provided that it has made a lower low as well
Regards
  • #358
  • Oct 22, 2008 7:54am Oct 22, 2008 7:54am
Quoting ajantala
Howard,

Why would you still put your setup bar two bars away from the current one? When you have another bar meeting the same requirement as the previous i.e. at least 5 pips below the 5-EMA in this case, you move on to the next bar making it the setup bar and if the bar after it doesn't pan out to be the reversal bar you are waiting for you make it also your new setup bar AS LONG AS it penetrates the low of the 5-EMA otherwise you wait two more bars to see if the trade reverses and if it doesn't, you start looking for a new setup bar all over again.

Besides, consider the profit you would have lost if you use the bar in your picture as the setup bar.

Presently, we should be going long as indicated on the pix file attached.
Having looked at your chart you have in fact a correct set up bar and a reversal bar, but that is because your 4hr bars close at a different time as mentioned by fx-char
Regards
  • #359
  • Oct 22, 2008 8:17am Oct 22, 2008 8:17am
Quoting Arnold49
ok, thanks,I have moved it now anyway.

I just wanted to clarify the rules, I thought as the last few bars were below the MA they don't count as setup bars.

Steve.
Allivemind had it right. The rules state that a setup bar must break the 5EMA by 5 pips, dont you thinkthat if price is all the way threw the 5 EMA that would be breaking threw it by 5 pips. The answer is yes it is. Hope this helps clear some things up for ya.

-Sterling
Founder of Day Trading Forex Live
  • #360
  • Oct 22, 2008 8:20am Oct 22, 2008 8:20am
Quoting ajantala
Stersur,

since you've modified the rules about holding a trade over the weekend i guess trade #3 made here should not be considered right? Just going over the whole thread again and found out this previous message you posted.

PS: I'm predicting this post is gonna net more replies than the 4HR MACD, anyone wanna bet on that?
Yeah I got burned a few times holding trades over the weekend and I got to thinking about what was making me hold trades over the weekend, and the answer was "hope" and "greed". And as many of you know those to things will set you up to fail. That being said I made the rule to close all trades on Friday and open them on Sunday. Thanks for the support.

-Sterling
Founder of Day Trading Forex Live
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