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4H 5EMA System

  • #921
  • Nov 7, 2008 1:46pm Nov 7, 2008 1:46pm
Quoting ivonivon
Quite reasonable.. sometimes I break the rule (quit on premature profit) when the price hit some physiological levels / resistance / support. Does it sound that I don't trust the system or "let the profit stop"?

What do you think?
Let me put it this way. If you had a system already that took +500 pips consistantly you wouldnt even be in this thread, you would be sipping a fruty drink on some beech somewhere. That being said im giving you a system that has proven to make on average well over +500 pips a month and you want to change it without backtesting your idean. Ill say this again, this system only wins 60% of the time at best. So if you dont have the 3 big trades it ususally takes a month you will take a system that does make money and turn it into a loosing system. You have to have those big winning trades to be profitable with this system. The other 25 are going to work out to break even. Please feel free to test this theory and let me know.

-Sterling
Founder of Day Trading Forex Live
  • #922
  • Nov 7, 2008 1:49pm Nov 7, 2008 1:49pm
Quoting Arnold49
I've just done a very rough quick test from the start of November, using a move to breakeven at 100 pips & it seems that the losses would be about halved & the wins weren't affected

anyone want to confirm this?

Now this could work but you dont wanna cut the winners. Is there a way we could move the stop to break even using an order. If you use a trailing stop you it not the same as moving the stop to break even when you hit 100 pips. Any thoughts on how we could do this without an EA?

-Sterling
Founder of Day Trading Forex Live
  • #923
  • Nov 7, 2008 1:52pm Nov 7, 2008 1:52pm
Quoting JokeR
Help me to understand pls
Once we are in the trade, we check every 4 hours for a new setup bar.If it's there, do we move our original Stop Losses to the new bars high( in a short trade),-low(in a long trade). Besides do we adjust our Stop Buy/Sell orders with the new Setup Bar??
I went through the whole thread but couldnt see it, sorry if i missed it
If you are short and have a setup bar to go long you move the short trades stop loss to 5 pips above the new setup bars high (plus spread) and you also put a buy stop order there. I hope this makes sense, if not feel free to ask again.

-Sterling
Founder of Day Trading Forex Live
  • #924
  • Nov 7, 2008 3:12pm Nov 7, 2008 3:12pm
Quoting stersuhr
Now this could work but you dont wanna cut the winners. Is there a way we could move the stop to break even using an order. If you use a trailing stop you it not the same as moving the stop to break even when you hit 100 pips. Any thoughts on how we could do this without an EA?

-Sterling
I will start to use this method next week & will let you know the results,
I am going to use the "Swiss army" EA as it has a move to breakeven feature

the reason I am motivated to do this is, my account increases so I increase my lots then we lose and I am back where I was, this has happened 3 times now!

this is truly a great system & I wouldn't want to alter so that it wasn't.

Steve.
  • #925
  • Nov 7, 2008 5:06pm Nov 7, 2008 5:06pm
Quoting Arnold49
I will start to use this method next week & will let you know the results,
I am going to use the "Swiss army" EA as it has a move to breakeven feature

the reason I am motivated to do this is, my account increases so I increase my lots then we lose and I am back where I was, this has happened 3 times now!

this is truly a great system & I wouldn't want to alter so that it wasn't.

Steve.
Im sure there are quite a few things we could change to make this system better. Using a once profit hits 100 move SL to BE might or might not be one of those things that would make the system more profitable. It all something that just needs to be backtested. I will have more time to backtest when I get back from Virginia in a week. I should still be able to post daily charts of the system from Virginia.

-Sterling
Founder of Day Trading Forex Live
  • #926
  • Nov 7, 2008 7:21pm Nov 7, 2008 7:21pm
I thought I would post an example to help show the point. We've all seen the chart run up a bit, pull back and then take off. If that first run up forms the reverse bar and the trade goes 100 before it pulls back you may take yourself out with a stop move to BE before the big run up. If this happens once in a low pip month you go from a positive month to a negative one. I would say pick a few months that the system did great, well, and pore on and then retest with the move to BE at 100 profit idea.

If the EA had the option for a move to BE that could be turned on or off, and then adjusted, this idea could be tested and optimized fairly easily...

Now everyone go get some sleep, the markets closed ;-}
  • #927
  • Nov 7, 2008 7:25pm Nov 7, 2008 7:25pm
Sterling, I think your Karma account may exceed your Trading account, though I hope they both continue to via for the highest balance.

I would also be happy to contribute to the expense of this EA should you wish it.

-Shawn
  • #928
  • Nov 7, 2008 10:00pm Nov 7, 2008 10:00pm
Quoting PowerBySol
Sterling, I think your Karma account may exceed your Trading account, though I hope they both continue to via for the highest balance.

I would also be happy to contribute to the expense of this EA should you wish it.

-Shawn
Thanks power I really appreciate you saying that! As far as the EA goes I appreciate people offering to help me with the cost, that means a lot. I really dont want anyones money for the EA. I would rather just let it be a gift to the people that follow this thread. When I made the thread I wanted to give people a system that would make them money and had everything already designed into it so that if they learned the system and followed it to a t they would make money. I think i've done that. If you follow this system and take every trade you will make money. Were up around 400 pips a this month.

As far as the 4H 5EMA challenge goes I think we have the first taker. In the rules I said I want it to be a mechanical system. It is, but he is going to use an EA. I also told him I want him to make a thread and explain the rules the way I have so everyone can learn from it and have another good system. So as soon as he does that we can start. Were not going to wait till the first of December to start it, we will probably start in a week or two. I have to fly to virginia to go meet an investor so well start after I get back. Im leaving Sunday and should be back the following monday at the latest.

As far as the EA goes there are some issues with it. I promise we will have a functioning EA by the first of Ded. Ill do everything in my power to make that happen. Its not going to hurt for me to pay Ferrufx to make one and also have the EA that the other guy is coming up with when he gets it done. He is very capable and should have it shortly. The guy im going to pay said he can have it done in a week at most so either way we will all have one in a few weeks.

-Sterling
Founder of Day Trading Forex Live
  • #929
  • Nov 7, 2008 10:20pm Nov 7, 2008 10:20pm
Heres the chart for Nov 7th

Trade #8 was closed for +37 pips

Trade #9 was closed for +43 pips

For the month we are up +411 pips. The last bar was also a setup bar to go long so if the market is below that bars high we will just re-enter the trade we exited before the weekend. If the market gaps up above it we will enter long and put are stop 5 pips below its low. If you guys dont understand the weekend rules or what I have said above then just ask and I will explain. Ill be around this weekend to answer any questions too.

I would also like to let everyone know what is happening with my Alpari account. Last week I made 23K with them and they put a 10 second delay on all my orders. This is not an option for my scalping so I closed my account. I dont want to say there a bad broker or anything but they will do this to you as well if you are a profitable trader. I personally would stay away from them and avoid the hassel of having them do this to you. I will be using an Alpari demo for the rest of the month and then I will use the 4H close that is most common. I believe that a close of 12,4,8 EST is the most common so I will use that. If that is not the most common let me know and I will use that.

-Sterling
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Founder of Day Trading Forex Live
  • #930
  • Nov 8, 2008 3:48am Nov 8, 2008 3:48am
Thanks for the heads up on Alpari - I was considering opening an account with them to run an automated system - not now!
Has anyone heard of similar practices from other brokers (I'm in the UK)
You don't have to be right, just don't be too wrong
  • #931
  • Nov 8, 2008 6:00am Nov 8, 2008 6:00am
sterling,
I want to thank you for this excellent system.
I have tried dozens of systems and indicators and this is the most simple and most profitable I have seen so far. My search for systems is over now, now i can focus completely on my trading, using this system. I give you a big .

The beauty I think is that it is mechanical and leaves little or no room for emotion or doubt, and that it can be used on all kinds of instruments. I trade mainly index futures, using M15 and made good profit with it last week. Forex is better of course because of the liquidity and volume. I am aForex newbie, and started trading only a few months ago, using MIG Investments, a swiss broker, and am very satisfied with them. However I cannot tell you how they act when you make large sums of money,as my trading is not at such a level (yet). I am trading 0.1 lots now.
  • #932
  • Nov 8, 2008 12:31pm Nov 8, 2008 12:31pm
Congrats on the originator of this System.It makes a lot of sense to let the profit run.I am pretty sure most of us here has understand the basics of the rules.Maybe we should start focusing on the exceptional situations.Like No setup candle within the next 2 hour candle or so.If a new setup candle forms everthing is clear and good but if the setup bar does not form this is when we might get confused..
Again Stersuhr, we appreciate your time and your will to share this system with us
  • #933
  • Nov 8, 2008 1:15pm Nov 8, 2008 1:15pm
Quoting El Dee
Thanks for the heads up on Alpari - I was considering opening an account with them to run an automated system - not now!
Has anyone heard of similar practices from other brokers (I'm in the UK)
Alpari-us and alpari-uk are two different companies, but they are still a bucket shop broker, so if you are a profitable trader im sure both will do it to you in time. I knew not to take that much in one week that my own fault to some extent.

-Sterling
Founder of Day Trading Forex Live
  • #934
  • Nov 8, 2008 1:17pm Nov 8, 2008 1:17pm
Quoting The7
Congrats on the originator of this System.It makes a lot of sense to let the profit run.I am pretty sure most of us here has understand the basics of the rules.Maybe we should start focusing on the exceptional situations.Like No setup candle within the next 2 hour candle or so.If a new setup candle forms everthing is clear and good but if the setup bar does not form this is when we might get confused..
Again Stersuhr, we appreciate your time and your will to share this system with us
Are you asking where do you put your stop in the case of a failed setup bar and no reversal bar?

-Sterling
Founder of Day Trading Forex Live
  • #935
  • Edited 2:28pm Nov 8, 2008 2:11pm | Edited 2:28pm
Quoting stersuhr
Are you asking where do you put your stop in the case of a failed setup bar and no reversal bar?

-Sterling

Lets say we just opened long trade with a reversal bar.But no new setup bars are forming( price doesnt break the higher ema by 5 pips) within 2 bars.Even if the trend looks good do we have to CLOSE the trade because the 2 bars have not break the higher ema or in other words didnt qualify as setup bars right????

If yes, i remember somebody saying somewhere, if the 2 bars dont qualify as setup bars, no matter what, the 3rd bar will be our setup bar. So does that mean even if the 3rd bar has not broke the high or low ema, it is still considered a Setup Bar??
  • #936
  • Nov 8, 2008 2:49pm Nov 8, 2008 2:49pm
What i mean is:
Bar 1 is the Setup Bar
Bar 2 is the Reversal Bar
Bar 3 and 4: Dont have Lower Lows then the previous bar ( they are failed setup and reversal bars).So we close the trade immediately after Bar number 4 closes and wait for the new setup bar which is Bar 5

Do i have this correct?
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  • #937
  • Nov 8, 2008 2:57pm Nov 8, 2008 2:57pm
Quoting The7
Lets say we just opened long trade with a reversal bar.But no new setup bars are forming( price doesnt break the higher ema by 5 pips) within 2 bars.Even if the trend looks good do we have to CLOSE the trade because the 2 bars have not break the higher ema or in other words didnt qualify as setup bars right????

If yes, i remember somebody saying somewhere, if the 2 bars dont qualify as setup bars, no matter what, the 3rd bar will be our setup bar. So does that mean even if the 3rd bar has not broke the high or low ema, it is still considered a Setup Bar??
No you dont close the trade. The rules state you only exit the trade when you get a signal to go the other direction. Say you are long and there are no setup bars to go short you just stay in the trade with the stop at the original location. If the trade hit a max profit of 150 pips you use the 50% retracement rules for your stop. If you dont know that rule its listed on the first page with a post# and explination.

-Sterling
Founder of Day Trading Forex Live
  • #938
  • Nov 8, 2008 2:59pm Nov 8, 2008 2:59pm
Quoting The7
What i mean is:
Bar 1 is the Setup Bar
Bar 2 is the Reversal Bar
Bar 3 and 4: Dont have Lower Lows then the previous bar ( they are failed setup and reversal bars).So we close the trade immediately after Bar number 4 closes and wait for the new setup bar which is Bar 5

Do i have this correct?
That trade never hit a max profit of 150 pips so you would use the original stop location on that one.

-Sterling
Founder of Day Trading Forex Live
  • #939
  • Nov 8, 2008 3:14pm Nov 8, 2008 3:14pm
Quoting stersuhr
That trade never hit a max profit of 150 pips so you would use the original stop location on that one.

-Sterling
Thanks for the clarification Stersuhr.
One question about the SL. My last SL on this chart is 5 pips above the bar before Bar # 3. Everytime we having a new Setup bar i move it to its High/Low +5. When u say u keep it on the original location( Bar 1's High) it makes me think we not suppose to move it to the new bars HL??
  • #940
  • Nov 8, 2008 4:28pm Nov 8, 2008 4:28pm
In the case of the trade you are talking about you do move it to the new setup bars high + 5 pips + the spread, but when the setup bar fails you have no setup bar and thus move the stop back to the original location.

-Sterling
Founder of Day Trading Forex Live
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