4H 5EMA System | Page 20 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

TEB 5ema & 12ema and 21 RSI (MTF) 1,730 replies

5EMA hilo system, and EA Idea 18 replies

4H 5EMA System's EA 79 replies

4HR 5EMA Expert Advisor 42 replies

when 5EMA crosses out of 55LWMA channel 0 replies

Attachments: 4H 5EMA System
Exit Attachments

4H 5EMA System

  • #381
  • Oct 22, 2008 12:55pm Oct 22, 2008 12:55pm
Quoting killertrader
For the 12, 4, 8 CST brokers, if I am doing this correctly, a long was triggered, got stopped out, and now we are short again.
Yup your right. The buy got triggered and when that reversal bar closed you would have put the sell stop in at the stop loss, and your stop loss on the sell stop would be 5 pips plus the spread above the high of the move up.

-Sterling
Founder of Day Trading Forex Live
  • #382
  • Oct 22, 2008 12:57pm Oct 22, 2008 12:57pm
Quoting flexie
Price action of late has been favorable for a trending system. How has this system performed during the tight ranging of early summer?
This system does very well when the market is ranging as well, just not a super tight range. It did very well in the summer. The last 6 months or so have a 700-800 pip a month average.

Had you used this system on the G/Y you would be in profit +1700 pips lol. Now im not saying the G/Y is more profitable over time, just making an observation. And im happy with being up +1100 pips on the G/U so its all good!

-Sterling
Founder of Day Trading Forex Live
  • #383
  • Oct 22, 2008 1:03pm Oct 22, 2008 1:03pm
Quoting Arnold49
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.
Have you read the first post. Print that out and then look at the first few pages for charts. I broke down every trade for the month of September. This should help. Its very repatative but that is what is needed when your first learning a system. Hope this helps.

-Sterling
Founder of Day Trading Forex Live
  • #384
  • Oct 22, 2008 1:03pm Oct 22, 2008 1:03pm
Questions in Blue

Quoting stersuhr



Entry

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.

Doesn't this also make a setup bar? What differs a setup bar from a reversal bar?

 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. In the case of a long setup bar (price below the 5 EMA) if price keeps going lower in the following bar that now becomes the setup bar. The same applies for a short. As long as price keeps going further in a direction you having new setup bars until a reversal bar triggers the trade. 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. And in this case the low of the current setup bar which is now invalid is not of any importance anymore. And the new setup bar should meet only the basic criteria of piercing the 5EMA by a minimum of 5 pips to be a valid 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.

Initial Stop Placement

1.) Initial stop placement is 5 pips above the setup bars high in the case of a short, and 5 pips below the low of the setup bar in the case of a short. Most charts use the bid for highs/lows, so in the case of a short the stop must be 5 pips above the high and then add the spread as well. 2.) If you get stopped out you then reverse the trade. If you are long and get stopped out you enter short when you get stopped out. So not only do you have your stop in the market but you also have your order to change the direction of the trade should you get stopped out. Only put a trade to go the other direction in the market after a proper reversal bar closes.

How many reversals before I do #3?

 3.) Lets say you got a buy signal and price went 80 pips in your favor and then went against you and stopped you out, at which point you reversed the trade acording to the rules. So where would you put your stop? Your stop would be placed 5 pips above the high from when you got in the trade. If you get stopped out of your reversal trade you do not put another reversal trade in the market.

Am I then looking for another setup bar?

  • #385
  • Oct 22, 2008 1:06pm Oct 22, 2008 1:06pm
Quoting Duncan
Has anyone written an EA for this yet?

Duncan
No EA as of yet. Im going to be paying to have one written here pretty quick. I will post it when I have it. Your welcome to do it but im already paying for one and wont be paying for another one. Thank you in advance if you decide to do it.

-Sterling
Founder of Day Trading Forex Live
  • #386
  • Oct 22, 2008 1:15pm Oct 22, 2008 1:15pm
Quoting Ronald Raygun
Questions in Blue
1.) Ill write this for the current downtrend. What differs a setup bar from a reversal bar? The setup bar makes the lowest low, it becomes your setup bar. You place your order to go long and come back in 4 hours. Price keeps going down and never triggered your long so now the next bar becomes the setup bar because it made a lower low. The setup bar dosent offically become the setup bar until the next buy triggers the trade, its just the current one. On the chart every bar with a red arrow pointing to it was a potential setup bar, but the following bar continued lower thus becoming the new setup bar. Then at the bottom price didnt make a lower low for 2 bars so that bar stayed the setup bar. As the rules state price has 2 bars to trigger your trade or it is cancelled and you wait for the new setup bar. This is the current market condition right now. Now price has 2 bars to break the current setup bars high or the long is cancelled and we wait for a new setup bar.

2.) If a buy is triggered and the reversal bar closes you put the reversal order to go short it. Then lets say price goes against you and stops the long and triggers the short. You dont put another stop and reverse to go long in. Only one reversal. If this happens you wait for a setup either direction to occur and then that trade can have one reversal. Hope all this makes sense.

-Sterling
Attached Image (click to enlarge)
Click to Enlarge Name: gfhfdgh.gif Size: 50 KB
Founder of Day Trading Forex Live
  • #387
  • Oct 22, 2008 1:44pm Oct 22, 2008 1:44pm
I don't see anything in the first post which explicitly says you should look for a long if the price breaks the lower EMA and look for a short when the price breaks the upper EMA.

Is that how you're trading it?

As I understand the system: If a setup bar appears, you trade the break of the high/low of that setup bar.
  • #388
  • Oct 22, 2008 1:49pm Oct 22, 2008 1:49pm
Hi ronald look at post #6
He explains it there
Nick
  • #389
  • Oct 22, 2008 1:54pm Oct 22, 2008 1:54pm
Thank you Sterling for sharing this method. I really appreciate it, it is one of the few complete systems you can find on this forum.

I do have one question though,
When a setup bar doesn't get broken by a reversal bar within 2 bars does the next bar automatically become the new setup bar (So the third bar after the original setup bar), even if it doesn't make a new low or high.
I hope you understand what i am asking if not i will try to explain it better.
Nick
  • #390
  • Oct 22, 2008 2:28pm Oct 22, 2008 2:28pm
Quoting 555ngone
Thank you Sterling for sharing this method. I really appreciate it, it is one of the few complete systems you can find on this forum.

I do have one question though,
When a setup bar doesn't get broken by a reversal bar within 2 bars does the next bar automatically become the new setup bar (So the third bar after the original setup bar), even if it doesn't make a new low or high.
I hope you understand what i am asking if not i will try to explain it better.
Yes it does become the setup bar. Being that the previous trade was cancelled you no longer look at those candles for the low. All that is required of the third bar to be a setup bar is that it breaks one of the EMA's by 5 pips. Sterling explian this a few posts back. i was talking to him today and we both agreed that the rules need to be written a little more clearly and in better order. Hes coming over tonight and were going to do this so look for the new rules tonight. Nothing on the rules will be changed, the system will remain the same...it will just be more clearly written.
  • #391
  • Oct 22, 2008 2:31pm Oct 22, 2008 2:31pm
Quoting stersuhr
Have you read the first post. Print that out and then look at the first few pages for charts. I broke down every trade for the month of September. This should help. Its very repatative but that is what is needed when your first learning a system. Hope this helps.

-Sterling
unfortunately, that is my downfall there are some discrepancies between graphs and descriptions, notably trade 12 on post 23 seems to ignore the large down spike in the middle of a trade, oh well, i'll persevere
  • #392
  • Oct 22, 2008 2:32pm Oct 22, 2008 2:32pm
Quoting Hiranya
Yes it does become the setup bar. Being that the previous trade was cancelled you no longer look at those candles for the low. All that is required of the third bar to be a setup bar is that it breaks one of the EMA's by 5 pips. Sterling explian this a few posts back. i was talking to him today and we both agreed that the rules need to be written a little more clearly and in better order. Hes coming over tonight and were going to do this so look for the new rules tonight. Nothing on the rules will be changed, the system will remain the same...it will just be more clearly written.
As Hiranya says, this is explained few posts back, look at post #303.
  • #393
  • Oct 22, 2008 2:32pm Oct 22, 2008 2:32pm
Quoting 555ngone
Thank you Sterling for sharing this method. I really appreciate it, it is one of the few complete systems you can find on this forum.

I do have one question though,
When a setup bar doesn't get broken by a reversal bar within 2 bars does the next bar automatically become the new setup bar (So the third bar after the original setup bar), even if it doesn't make a new low or high.
I hope you understand what i am asking if not i will try to explain it better.
It does not have to make a new high or low but it has to have the basic conditions of a setup bar.
Regards
  • #394
  • Oct 22, 2008 2:32pm Oct 22, 2008 2:32pm
Quoting Ronald Raygun
I don't see anything in the first post which explicitly says you should look for a long if the price breaks the lower EMA and look for a short when the price breaks the upper EMA.

Is that how you're trading it?

As I understand the system: If a setup bar appears, you trade the break of the high/low of that setup bar.
Your right Ronald it dosent, but Sterling posted every trade for last month and it clearly show this to be the case. Thank you for the observation and as I said in the last post me and him are going to write the rules a little more clearly tonight. We will definatly include this and again thank you.
  • #395
  • Oct 22, 2008 2:34pm Oct 22, 2008 2:34pm
Quoting Arnold49
unfortunately, that is my downfall there are some discrepancies between graphs and descriptions, notably trade 12 on post 23 seems to ignore the large down spike in the middle of a trade, oh well, i'll persevere
I just called Sterling and told him to check this out he will be home in fifteen and check to verify this.
  • #396
  • Oct 22, 2008 2:56pm Oct 22, 2008 2:56pm
Quoting Arnold49
unfortunately, that is my downfall there are some discrepancies between graphs and descriptions, notably trade 12 on post 23 seems to ignore the large down spike in the middle of a trade, oh well, i'll persevere
On trade 12, 3 bars before it was the setup bar and the next two bars failed to make a valid short so the bar your speaking about because the setup bar. I hope you understand this, if not I will explain further. Please edit your post so as not to confuse others thank you.

-Sterling
Founder of Day Trading Forex Live
  • #397
  • Oct 22, 2008 3:15pm Oct 22, 2008 3:15pm
Quoting stersuhr
On trade 12, 3 bars before it was the setup bar and the next two bars failed to make a valid short so the bar your speaking about because the setup bar. I hope you understand this, if not I will explain further. Please edit your post so as not to confuse others thank you.

-Sterling

"12.) As the rules state, after a proper reversal bar closes and gets you in a trade, you place a trade to switch the direction of the original trade at the stop loss. This is what happened her when we went long right when we got stopped out on the last trade.

Buy stop - 1.7987
Stop loss - 1.7793

Trade continues in are direction until a sell signal is given, at which point we exit at 1.8158 which is where we get short. + 181 pips"

I have highlighted the candle that bothers me, as you can see the down spike seems to have been ignored, it was lower than the previous bar but no short was taken.

please don't think I am being awkward, I'm not, just trying to fathom this out

thanks,
Steve.
Attached Image (click to enlarge)
Click to Enlarge Name: untitled.GIF Size: 12 KB
  • #398
  • Oct 22, 2008 3:24pm Oct 22, 2008 3:24pm
Quoting Arnold49
\"12.) As the rules state, after a proper reversal bar closes and gets you in a trade, you place a trade to switch the direction of the original trade at the stop loss. This is what happened her when we went long right when we got stopped out on the last trade.

Buy stop - 1.7987
Stop loss - 1.7793

Trade continues in are direction until a sell signal is given, at which point we exit at 1.8158 which is where we get short. + 181 pips\"

I have highlighted the candle that bothers me, as you can see the down spike seems to have been ignored, it was lower than the previous bar but no short was taken.

please don't think I am being awkward, I'm not, just trying to fathom this out

thanks,
Steve.
No I welcome questions. I hate systems that you can monday morning quarterback and I want to prove to everyone this system is not that way. Ok So lets talk about the chart. 3 candles before the one you circled is the setup bar...it made the highest high. The two following candles failed to break the low of that bar and trigger the short so that trade and setup bar was cancelled at the close of the bar right before the one you circled. As the rules state after a trade like this is cancelled you look for a setup bar, the candle you circled is the setup bar so at its close we would have put are short entry in. The next candle made a higher high and thus became the setup bar (the one with the red arrow pointing to it trade #13 is not labeled with a number only a arrow.) It was followed by a candle that broke its low by 5 pips and thus closed are long out and triggered are short. I hope this makes sense.

-Sterling
Founder of Day Trading Forex Live
  • #399
  • Oct 22, 2008 3:33pm Oct 22, 2008 3:33pm
CAN U PLESE MARK ON THE CHART WHIT SAME KIND OF LINE WERE EXCCELY

U ENTER THE TRADE BOOT THE "SET UP" + "REVESEL SIGNAL" +WERE THE EXIT

THANK ALL
  • #400
  • Oct 22, 2008 3:36pm Oct 22, 2008 3:36pm
thanks, I get that now, but what would have happened if that downspike had gone down a little further and taken out the stop from the previous trade, would you have been out of the market waiting for a new setup bar or would you reverse and go short?

thanks Steve.
0 traders viewing now