4H 5EMA System

Quoting Ronald Raygun

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I'm having trouble understanding the concept of the reversal bar.

A reversal bar is a bar whose price breaks the high of the setup bar--in case of a long, or whose price breaks the low of the setup bar--in case of a short.

Do we wait for the reversal bar to close? I'm curious to know what happens when the price of the reversal bar breaks the high low of the setup bar, and then makes a new high/low.

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Quoting batesmotel

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Actually, I was refering to post #553...I'll quote the part you explained.

\"As far as it triggering the buy order and then getting stopped out in the same bar, you do not have a reversal order in the market (howard). The rules state you do not put the reversal order in until the reversal bar closes. If you were to put the reversal order in who to say that order wouldnt get triggered without even triggering a buy? That is why you dont do that. I hope this clears things up.\"

Where will the next order go?? Do we put in a sell order 5 pips below low of the bar that took out our stop??

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Quoting stersuhr

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In the case of a long:

When price is below lower 5 EMA you are looking for longs only. Inverse for a short. So when the setup bar closes you place your buy stop 5 pips + the spread above the setup bars high and the stop 5 pips below the low. You do this so you only have to look at the market once every 4 hours.

If price goes up and triggers the buy then makes a lower low, its simple, you lose. When this happens, since the bar that stopped you out made a lower low it now becomes the setup bar and when it closes you put in the buy order as mentioned above. It does not happen very often that you get a trade triggered and stopped out in the same bar but it does happen. I think it has happended twice this month. Hope this clears things up.

-Sterling

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Quoting stersuhr

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When you first enter a trade you have the order to enter and the stop loss, thats it. So if you get a order triggered and it gets stopped out in the same bar then you are no longer in the market and you wait for a setup bar to occur before you enter the market. Is that what you were asking?

-Sterling

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Quoting AlexL

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In case of long:
Setup bar:
- 5pips + spread bellow EMA
- lower low and lower high

Reversal bar:
- it becomes a reversal bar the moment it has a higher high then the setup bar. It doesn't matter if it will make a lower low also.

Hope I'm right

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Quoting batesmotel

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Yes...this is the delemma for me....we are not in the market at this point....and risk missing a large downward move....

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Quoting stersuhr

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Ok if your using Alpari charts your long and have a sell stop order at 1.5270. If you are using the other charts you are currently short. No rick of missing a trade on either of them, its just one is going to take a loss before getting in the right direction. You only dont have a reversal trade in during the reversal bar, as soon as the reversal bar closes you put in the reversal trade.

-Sterling

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Quoting batesmotel

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Ok...thanks...

This isn't for the live trade at the moment....it was for a hypothetical position where our buy stop got triggered...then it came right back down (the same bar) to take out our stop loss....

So let me recap (thanks for your patience)...once we get stopped out in this case....we wait for the close of the candle that both triggered our buy stop and took out our SL...then, after it closes...then we get short...Correct??

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Quoting vsilver

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I see a lot of conversation about the alpari candles being a little diff. I just opened a mini with alpari. Just how diff are they?

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Quoting viperzz

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Hi Sterling,
Thank you very much for being so kind to share what obviously is a great trading method. I'm just starting out myself with it but think I have a good grasp.
In this picture can you just clarify that I have a correct stop and it would be appropriate to have a pending sell set at that stop as well?
If so, I assume if a bar from now on make a new high above the high EMA the stop and pending sell would then be moved to the low of that new bar.

Many Thanks, Paul

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Quoting BullRun

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If we were to stopped out at any time that would put us out of the market. To overcome this problem, is it ok to assume that once we stopped out that we immediately open another trade in the direction that was stopped out?

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Quoting stersuhr

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You got it right. hopefully we get that bar above the higher 5 EMA to move the stop closer....have to wait and see.

-Sterling

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Quoting jarcrocker

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I read through the thread. I've started demo trading this system. Seems to fit what I need. I have a few questions and I apologize if they have already been stated. I couldn't find them in the thread again.
1. Is there any form of trailing stop or stop movement other than when initiated by a signal the other direction?
2. If the reversal bar is an engulfing bar, meaning price goes both above and below your previous setup bar, would you move your stop to the high/low of reversal bar or keep it in the setup bar?

Thanks in advance,

jar

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Quoting viperzz

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Thanks for the reply

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Quoting stersuhr

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Potential Trade #23

You should have a sell stop at 1.5270 and the stop on that is 1.5711. We have had some big stops the last few trades but we have also had some huge profits as well. If this trade gets triggered most likely we will have a setup bar to go long and will be able to move are stop way down so as not to have to deal with such a big stop.

-Sterling

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