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How to Build a Trading System around these Lines

  • #1
  • First Post: Edited 4:51am Mar 2, 2007 12:04am | Edited 4:51am
Hello Everyone,

I am looking for suggestions/Ideas on what I can add to these lines in the picture to create system rules.

i.e. if you had to build a system around these lines how would you go about it?

http://www.emerald-king.com/EKLines.PNG
On a Side note if an admin is reading this How can I get my name fixed? it should be Emerald King ( currrently I am missing the L )

Thank you for your Time and Effort
EK
  • #2
  • Mar 2, 2007 12:08am Mar 2, 2007 12:08am
I would trade when the price is on the outside of the quicker line.
  • #3
  • Mar 2, 2007 12:37am Mar 2, 2007 12:37am
and in addition I would say that you should wait for a retrace to the fastest and use the slowliest for your stop.
  • #4
  • Mar 2, 2007 1:05am Mar 2, 2007 1:05am
Have you back tested a simple system based on crossing of the two lines? Looks like it would be quite profitable.

When fast line crosses above slow line, buy. When fast line crosses below slow line, sell (or reverse).

I don't think I would use a system based on price crossing or touching the fast line. Looks like it might lead to overtrading.

If you care to share the formula that generates the two lines (moving averages?) I or others here can back test this. While the results look impressive for the time period of your snapshot of the chart, further back testing may prove different results.

It can also be back tested using profit exits before the lines reverse, with fitted stop loss orders.

CarlC
  • #5
  • Mar 2, 2007 1:10am Mar 2, 2007 1:10am
Quoting CarlC
Have you back tested a simple system based on crossing of the two lines? Looks like it would be quite profitable.

When fast line crosses above slow line, buy. When fast line crosses below slow line, sell (or reverse).

I don't think I would use a system based on price crossing or touching the fast line. Looks like it might lead to overtrading.

If you care to share the formula that generates the two lines (moving averages?) I or others here can back test this. While the results look impressive for the time period of your snapshot of the chart, further back testing may prove different results.

It can also be back tested using profit exits before the lines reverse, with fitted stop loss orders.

CarlC
no no no, look at where the price is when those two lines cross. you're not buying or selling WHERE they cross, you're buying or selling WHEN they cross. huge difference. and those arn't ma lines.
  • #6
  • Mar 2, 2007 9:20pm Mar 2, 2007 9:20pm
aicccia,

I DO know where the price is when the lnes cross, and I'm still standing by my "opinion" that trades should reverse when the lines cross. Unfortunately EK or someone changed the resolution of the chart to where it's barely legible now. Otherwise, I would take the time to go bar by bar to see how my theory worked.

It's obvious that the blue and purple lines are some kind of average of the 1 hour price bars, simply because they follow price. Now whether they are simple moving averages, or the result of massaging price or volume bars based on some complex cosmic equation, we won't know until EK tells us the composition of the lines. I don't know of any external data other than price or volume that would correlate so closely to the price action of the chart.

That being said, in my opinion the blue line follows too close to price to trade off the 1 hour chart. But that's a matter of personal preference. Some traders want to trade every wiggle, some are more patient. Some may use both, putting on a multiple contract position and legging out based on short and longer term signals. My philosophy is use whatever works for you.

CarlC
  • #7
  • Mar 2, 2007 11:11pm Mar 2, 2007 11:11pm
Quoting Emerad King
Hello Everyone,

I am looking for suggestions/Ideas on what I can add to these lines in the picture to create system rules.

i.e. if you had to build a system around these lines how would you go about it?

http://www.emerald-king.com/EKLines.PNG
On a Side note if an admin is reading this How can I get my name fixed? it should be Emerald King ( currrently I am missing the L )

Thank you for your Time and Effort
EK


blue line = B
violet line = V
1. if B is greater than V goto step 2
if B is less than V goto step 3
if B = V goto step 1
2. If B is greater than V and distance between B & V of current candle is greater than distance between B & V of previous candle then go long else return to step 1
3. If B is less than V and distance between B & V of current candle is greater than distance between B & V of previous candle then go short else return to step 1
You should add a candle count or pip value before closing any orders
I hope this makes sence
rsrol
If you can't find it or buy it, build it.
  • #8
  • Mar 3, 2007 7:36am Mar 3, 2007 7:36am
Hello Everyone,

Thanks for the great suggestions. The admins deleted my first pic because it was too big and then I made it smaller. On Monday I will post better pictures that show the great easy setups and the whipsaws. I am trying to figure out the best way to cut down on the whipsaws without missing out on the great moves.

Thank you for this open forum and to its members who contribute.
EK
  • #9
  • Mar 3, 2007 8:46am Mar 3, 2007 8:46am
Emerald

Those lines seems like FATL or SATL ?? Am I wrong??
Johann Channels and cycles are everything
  • #10
  • Mar 3, 2007 4:51pm Mar 3, 2007 4:51pm
I think it's FATL and SATL. The crosses look like good signals, but I suspect you would get whipsawed to death in a flat market just trading those. Trading when the fast line crosses the slow line would be the standard strategy with just the two lines. Maybe try adding ADX as a filter. There are other specialized indicators that work along with these lines to make the complete system.
  • #11
  • Mar 4, 2007 4:52pm Mar 4, 2007 4:52pm
Hello Everyone,

My Goal is to build a system that uses precise rules for entry and exit. I need a totally mechanical system that I can codify and turn into an EA to run on Metatrader hands free (Mostly Hands Free).

I am not looking for the Holy Grail; I am not looking to build a EA that needs optimization to have Positive Expectancy. I need to build a system that is robust enough to run on multiple markets, without optimization and without needing constant monitoring.

My Lines are propriety but the closest I have seen come to what I have is the StepMA from Igorad from Forex-Tsd forums.

I am trying to build a system with these lines as the core and to catch trends as defined by the system while limiting drawdown.

Thank you for your Time and Effort
Attached Images
  • #12
  • Mar 4, 2007 5:05pm Mar 4, 2007 5:05pm
can you send indicators?
  • #13
  • Mar 4, 2007 5:58pm Mar 4, 2007 5:58pm
I am not going to release my indicators to the public

Thank you for you're time and effort.
EK
  • #14
  • Mar 4, 2007 8:22pm Mar 4, 2007 8:22pm
Quoting Emerad King
Hello Everyone,

My Goal is to build a system that uses precise rules for entry and exit. I need a totally mechanical system that I can codify and turn into an EA to run on Metatrader hands free (Mostly Hands Free).

I am not looking for the Holy Grail; I am not looking to build a EA that needs optimization to have Positive Expectancy. I need to build a system that is robust enough to run on multiple markets, without optimization and without needing constant monitoring.

My Lines are propriety but the closest I have seen come to what I have is the StepMA from Igorad from Forex-Tsd forums.

I am trying to build a system with these lines as the core and to catch trends as defined by the system while limiting drawdown.

Thank you for your Time and Effort
I don't know of any. I have never came across a mechanical system that works on every instrument without some type of optimization. Optimization is not necessarily a bad thing, BTW.

Also, you have to be careful with those StepMAs. You must realize that they don't paint until the timeframe that they are set on comes to an end.
  • #15
  • Mar 22, 2007 12:36pm Mar 22, 2007 12:36pm
If you're not going to release your indicators, Emerad King, how can anyone help you? To everyone else, those are multi timeframe moving avarages, probably an average of SATL in a multi timeframe, like the one I've attached. You have to put both SATL and the other one into custom indicators, and it's a little squirrely. I doubt the ones being shown here are all that original. These aren't mine, a guy over at TSD came up with the idea...
Attached File(s)
File Type: mq4 SATL.mq4   3 KB | 1,104 downloads
File Type: mq4 #MTF_xpMA_v2SATL.mq4   6 KB | 1,062 downloads
"The time to act is when others show signs of tire." --W.D. Gann
  • #16
  • Last Post: Mar 22, 2007 1:37pm Mar 22, 2007 1:37pm
Quoting Emerad King
I am not going to release my indicators to the public

Thank you for you're time and effort.
EK
Then, do not ask the public it's opinion - and certainly - never ask for help.
I'm pretty much done with all this ...
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