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4H 5EMA System

  • #801
  • Nov 2, 2008 1:06pm Nov 2, 2008 1:06pm
Quoting PowerBySol
Hey Ivon -

The green circled bar from 9/25 20:00 does not actualy touch the 5EMA Close. You can't tell from the posted picture but if you go to the actual chart you can see it. At least you can on my Alpari US Demo.
I don't remember seeing anything in the rules saying the bar has to touch the high/low EMA, it just nees to hav a part outside it.
  • #802
  • Nov 2, 2008 1:30pm Nov 2, 2008 1:30pm
The way I understand it is that the setup bar for going long has to have the lowest low ... thus your green tagged bars do not qualify as setup bars but are checked against being reverse bars ... since both of them do not qualify then you start looking for a setup bar again ... and that 2nd red bar becomes a setup since it has the lowest low and then it's high is pierced/broken by the next bar (reverse bar)

Actually if you look at the first pics of the example trades you will find the same setup as here.

m78


Quoting ivonivon
Hi, thanks for sharing your system...

I just want to ask regarding your first chart (post#2) and the explanation given in post#6.

Your chart (I've marked candle that confuse me):

You said you enter trade in no.2, and regarding to your rules:

Thanks for some explanations!
  • #803
  • Nov 2, 2008 1:33pm Nov 2, 2008 1:33pm
Sterling already said he recommends a standard lot for 20K account so if you have 10 times less then you use a minilot (10K positions vs 100K)

I guess the moment you get your account to 2200 you can go to 11K or you could wait till you double the account ...

It's all about surviving the drawdown without a marigin call

m78

Quoting Kosomolate
Hi Sterling and others,

I only have an account of 2k so STERLING I need advice on the following:

what size should I start with?
at what stage should I increase the size? e.g weekly...
and what should be the increase ? eg 0.01 to 0.02 ...
thanks
  • #804
  • Nov 2, 2008 2:21pm Nov 2, 2008 2:21pm
Quoting batesmotel
Hi Sterling:

Can you take a look at this long trade at 1.9597? This is a messy trade and it doesn't seem clear to me where I would close the long and go short...

If u can enlighten me on this one...it would clear up a lot of confusion....thanks

Greg
It dosent look like there was anywhere to get short. You would have used the 50% retracement rule and got out with half profit.

-Sterling
Founder of Day Trading Forex Live
  • #805
  • Nov 2, 2008 2:26pm Nov 2, 2008 2:26pm
Quoting Kosomolate
Hi Sterling and others,

After about 2 wks of demo trading the 5EMA I intend to start trading it on a live account from 3rd of Nov. following every rules. and keeping the record of all the trades I take, right through to the end of Nov. to see what happens.

I only have an account of 2k so STERLING I need advice on the following:

what size should I start with?
at what stage should I increase the size? e.g weekly...
and what should be the increase ? eg 0.01 to 0.02 ...

I would really need this and more cos I have finally decided to stick to this system

We all know that there is difference between demoing and live trading

thanks
The money managment I recommend is 1 mini per 2k in your account. Start trading 2 lot when your at 4K. This give enough room for any drawdown. If there is a drawdown dont stop trading, inevitable as sson as you stop trading the system will have 2 800+ pip trades and it will be very depressing. When you start trading take every trade!

-Sterling
Founder of Day Trading Forex Live
  • #806
  • Nov 2, 2008 2:30pm Nov 2, 2008 2:30pm
Quoting ivonivon
Hi, thanks for sharing your system...

I just want to ask regarding your first chart (post#2) and the explanation given in post#6.

Your chart (I've marked candle that confuse me):

http://img393.imageshack.us/img393/9198/chartux6.jpg

You said you enter trade in no.2, and regarding to your rules:

[font=Arial][size=4]1.) Price must go above/below the 5EMA by 5 pips for it to be considered a setup bar. If price breaks the lower EMA you only look for longs and if price breaks the high EMA you only look for short entries. Price must touch one or the other not both, if it touches both EMS[color=black][font=Arial]’s...
The bar before the green ones was the setup bar. It made the lowest low and the rules state that it has two bars after the lowest low or higest high to trigger the trade, if it dosent the trade is canecelled and you start looking for a setup bar. The first bar after the ones circled in green was a setup bar but then the next bar made a lower low and thus became the setup bar. That bars buy stop was triggered by the bar following it and was later stopped out on a weekend gap. Since it got stopped out you would have went short per the reversal rules and rode the short down. I hope this makes sense, if not ask again.

-Sterling
Founder of Day Trading Forex Live
  • #807
  • Nov 2, 2008 2:32pm Nov 2, 2008 2:32pm
Quoting Ronald Raygun
I don't remember seeing anything in the rules saying the bar has to touch the high/low EMA, it just nees to hav a part outside it.
You right Ronald. The rules state that price has to break the EMA by 5 pips. It can be completely below it with nothing touching the EMA...it just simply has to go threw it by 5 pips. Everyone dont over complicate the rules just take them for face value.

-Sterling
Founder of Day Trading Forex Live
  • #808
  • Nov 2, 2008 2:35pm Nov 2, 2008 2:35pm
Quoting m78
Sterling already said he recommends a standard lot for 20K account so if you have 10 times less then you use a minilot (10K positions vs 100K)

I guess the moment you get your account to 2200 you can go to 11K or you could wait till you double the account ...

It's all about surviving the drawdown without a marigin call

m78
You got it! You want to make money as fast as possable but you dont want to get a margin call. The worst drawdown ive seen, if you would have started at the worst possable time was 600 pips. If you trade 1 mini per 2K that would be a $600 drawdown and thats not so bad concidering the month that drawdown occured we ended up +450 for the month.

-Sterling
Founder of Day Trading Forex Live
  • #809
  • Nov 2, 2008 2:40pm Nov 2, 2008 2:40pm
how thise nice sys work on a sideway market condition?

can u please give here a visoel exempels?


thise is a good thread

thenk u all

  • #810
  • Nov 2, 2008 2:52pm Nov 2, 2008 2:52pm
Trade #29 was stopped out for -266

Trade #30 was stopped out for -52

Trade #31 was stopped out for -158

Pretty bad month for this system, and it was also a perfect example why I say to take every trade. This month netted only +52 pips. Ehhh...well atleast its a good month for someone to start trading it. If you backtest this system, anytime it has a small pip month 80% of the time its followed up with a huge month, so I hope for the best. The reason I said that this month showed that you have to take very trade for the system to be as profitable as it is over the course of a year is because of are huge short trade that netted +1050 pips. Without that one trade you take what was a small gain month into a losing month.

As always every system has its small months and its big months 700+ pips a month is a average. Last month was almost 1000+ pips and this month is 50+ pips so are average right now since the threads inseption is around 500+ pips a month. I have a feeling that will go up if history repeats itself. So heres to next month hopefully a few more pips than +50!

Right now we currently have no setup bar so we will have to wait and see what the first bar this Sunday does.
-Sterling
Attached Image (click to enlarge)
Click to Enlarge Name: g.gif Size: 68 KB
Founder of Day Trading Forex Live
  • #811
  • Nov 2, 2008 2:56pm Nov 2, 2008 2:56pm
Quoting FX fuel
how thise nice sys work on a sideway market condition?

can u please give here a visoel exempels?


thise is a good thread

thenk u all

It depends on how tight the range is. Anything over a 250 pip range and it works good. Tighter ranges not so much. But then again lately have you seen the G/U stay in a 100-150 pips range? If you have not for long. Last month was definatly below average but thats why its a average. The last month (sept) was above average so over the course of the year if you add up all the months and devide it by 12 it should average around 700 pips.

-Sterling
Founder of Day Trading Forex Live
  • #812
  • Nov 2, 2008 4:24pm Nov 2, 2008 4:24pm
Quoting stersuhr
The bar before the green ones was the setup bar. It made the lowest low and the rules state that it has two bars after the lowest low or higest high to trigger the trade, if it dosent the trade is canecelled and you start looking for a setup bar. The first bar after the ones circled in green was a setup bar but then the next bar made a lower low and thus became the setup bar. That bars buy stop was triggered by the bar following it and was later stopped out on a weekend gap. Since it got stopped out you would have went short per the reversal rules and rode the short down. I hope this makes sense, if not ask again.

-Sterling
It's good to know I need to work this out a bit more before a reversal is formed ;-}

I appreciate the way you walked the process though Sterling. I am going to try and write a 'check list' to perform at each new candle to help cement the process in my mind. I'll post it in case it helps anyone, and in case anyone is willing to correct any mistakes. Here's to a new week
  • #813
  • Nov 2, 2008 4:24pm Nov 2, 2008 4:24pm
Thanks for a great system and your own huge personal contribution Sterling - just a thought have you thought about quitting the month after, say +1000 pips is reached? Do you have many months which are a lot greater than this? It just seems a shame to lose all of those hard earned early pips to the last week of losses..
  • #814
  • Nov 2, 2008 4:31pm Nov 2, 2008 4:31pm
Thanks Ronald - Sterling,

The fact that the bar did not need to touch was not clear to me. When looking for a buy set up candle the candle must break the lower 5EMA to the down side, once it does then it dosn't matter if it still touches the L 5EMA. Opposite for a Sell setup. This sound right? Had it in my head that the bar had to be touching. I think the statement 'follow it for a week and it will come clear' will prove true ;-}
  • #815
  • Edited 5:25pm Nov 2, 2008 4:49pm | Edited 5:25pm
Hi Everyone:

I'm continuing to back test 2007. The results are quite surprising...so here is January - July results: 2007 was not a particularly good year....unless my backtests are in error.


2007
Jan +626 pips
Feb -465 pips
Mar +100 pips
Apr +407 pips
May +286 pips
Jun +30 pips
Jul -27 pips

Average for the first 7 months of 2007 is +137 pips/mth.
Using Sterling's fixed lottage of 1 mini per $2000 of account size.....the average %gain on account was 6.9% per month over the first 7 months of 2007...
Still respectable numbers.

February was a bad month and March wasn't much better...I included the charts for the "challenging months" if anyone wants to double check...

Note: bar shift is 0:00, 4:00, 8:00, 12:00, 16:00 and 20:00 hours

Greg
Attached Image(s) (click to enlarge)
Click to Enlarge Name: feb 2007.gif Size: 29 KB
Click to Enlarge Name: jun 2007.gif Size: 24 KB
Click to Enlarge Name: jul 2007.gif Size: 25 KB
Attached File(s)
File Type: xls gbp_4hr_5ema_Backtest 2007.xls   250 KB | 386 downloads
  • #816
  • Nov 2, 2008 5:05pm Nov 2, 2008 5:05pm
Quoting PowerBySol
It's good to know I need to work this out a bit more before a reversal is formed ;-}

I appreciate the way you walked the process though Sterling. I am going to try and write a 'check list' to perform at each new candle to help cement the process in my mind. I'll post it in case it helps anyone, and in case anyone is willing to correct any mistakes. Here's to a new week
Thats a great idea and it might help some other people to. Great idea!

-Sterling
Founder of Day Trading Forex Live
  • #817
  • Nov 2, 2008 5:07pm Nov 2, 2008 5:07pm
Quoting PowerBySol
Thanks Ronald - Sterling,

The fact that the bar did not need to touch was not clear to me. When looking for a buy set up candle the candle must break the lower 5EMA to the down side, once it does then it dosn't matter if it still touches the L 5EMA. Opposite for a Sell setup. This sound right? Had it in my head that the bar had to be touching. I think the statement 'follow it for a week and it will come clear' will prove true ;-}

No it dosent have to touch an EMA the price just has to go threw it by 5 pips at some point. It can open and close below the lower EMA and still be a setup bar, because price is threw the EMA by 5 pips atleast.

-Sterling
Founder of Day Trading Forex Live
  • #818
  • Nov 2, 2008 5:23pm Nov 2, 2008 5:23pm
Quoting batesmotel
Hi Everyone:

I'm continuing to back test 2007. The results are quite surprising...so here is January - July results: 2007 was not a particularly good year....unless my backtests are in error.


2007
Jan +626 pips
Feb -465 pips
Mar +100 pips
Apr +407 pips
May +286 pips
Jun +30 pips
Jul -27 pips

Average for the first 7 months of 2007 is +137 pips/mth.

February was a bad month and March wasn't much better...I included the charts for the \"challenging months\" if anyone wants to double check...

Note: bar shift is 0:00, 4:00, 8:00, 12:00, 16:00 and 20:00 hours

Greg
I just went over July of 07' and got +150 for the month. Are you using alpari as your standard or another broker? You charts are fuzzy and I cant download them, or else I would check those and let you know where you went wrong. Unless your using another broker then your probably right.

-Sterling
Founder of Day Trading Forex Live
  • #819
  • Nov 2, 2008 5:27pm Nov 2, 2008 5:27pm
Hi sterling,
What if we have a failed or several failed setup bars and no where to put our stop if the price has not yet gone 150+ in profit so the 50% rule would then not apply.

Would we temporally move the stop back to low/high+5 of the very first setup bar where we entered the current trade? If that is the case, is it just a stoploss we put there without an opposite order until a new signal comes?

Thanks, Paul
  • #820
  • Nov 2, 2008 5:38pm Nov 2, 2008 5:38pm
Quoting viperzz
Hi sterling,
What if we have a failed or several failed setup bars and no where to put our stop if the price has not yet gone 150+ in profit so the 50% rule would then not apply.

Would we temporally move the stop back to low/high+5 of the very first setup bar where we entered the current trade? If that is the case, is it just a stoploss we put there without an opposite order until a new signal comes?

Thanks, Paul
The stoploss would go back to the original location and you would have a reversal order there as well.

-Sterling
Founder of Day Trading Forex Live
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