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4H 5EMA System

  • #1,041
  • Edited Nov 13, 2008 12:02am Nov 12, 2008 11:30pm | Edited Nov 13, 2008 12:02am
Ok guys im back. After trade #9 we had a closed profit of +411 for the month.

Trade #10 was closed for -8 pips

Trade #11 was closed for -150 pips

Trade #12 was closed for +79 pips Trade #12 is the red line where we went short on the reversal trade.

Trade #13 was closed for -123 pips #13 is not labeled on the chart but it is the last setub and reversal bar

Trade #14 is open still and we are up +410 pips at the moment.

Are current order in the market is a buy stop at 1.4998 with a stop 1.4825 At the buy stop we also have are stop loss for the short trade. If the buy is not triggered in the next 1:30 hours the buy stop ordered is cancelled and we wait for the new setup bar. If the trade is cancelled we use the 50% stop rule for are current short position. As I said before if there are any questions that I missed while I was gone I am sorry and if you ask them again I will be more than happy to answer all of them. Are current pip count for the month is +209 pips and that is closed. We are also short on the G/U and that position is up +410 pips so right now we are up +615 pips or so for the month.

-Sterling
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Founder of Day Trading Forex Live
  • #1,042
  • Nov 12, 2008 11:34pm Nov 12, 2008 11:34pm
Quoting tonirai
Hi Sterling,

OK, but apparently, I have different values than the rest of you guys (at least you and finnsol);
The high at the setup bar was in my case 1.5461 (finnsol had 1.5462);
The doji was my reversal bar, it made a high of 1.5467 (1.5466 for finnsol);

So in my case, the doji triggered the long (not the next bar) - so it wasn't the same bar for me (doji triggered the buy; next bar stopped it).
So I didn't miss the ride down

Don't know why I have different values than you guys... I'm with a demo Alpari UK, could be for that?
Anyone...
Either way the doji should not have triggered you trade. The rules state 5 pips above and below. In the case of a buy if you just put it 5 pips above it is really only 2 pips because it will buy you at the bid. So you have to put it 5 pips above + the spread (3 pips) so for a buy it is 8 pips above. You do his also when you place you stop on a sell (5 pips + your spread) hope this clears things up. If you made money on this consider it your lucky day and move on

-Sterling
Founder of Day Trading Forex Live
  • #1,043
  • Nov 12, 2008 11:37pm Nov 12, 2008 11:37pm
Quoting tonirai
If I may try giving a shot at answering that.
Sterling, correct me if I'm wrong:


Yes;


Correct, we don't;


Yes, when finished;


Now you confused me a bit...
The SL was never above the doji.
When you started the long, it was below the bar before the doji (setup bar that triggered the long);
[color=#0000ff][color=black]When you got stopped and reversed (at bar 1), the rules state that, as in this case you come from...

Ahh- Yes the reversal SL was never above the doji, I meant to say the candle before the doji- Thanks for clarifying, the main thing is it it was ok it got moved to above candle "1" in my pic after candle 1 closed, which you confirm is correct- Thanks.
  • #1,044
  • Nov 12, 2008 11:40pm Nov 12, 2008 11:40pm
Please look at the chart again for the right pip count. I forgot to put trade #13 in there and that was a negative -123 trade.

-Sterling
Founder of Day Trading Forex Live
  • #1,045
  • Nov 12, 2008 11:47pm Nov 12, 2008 11:47pm
Quoting stersuhr
Either way the doji should not have triggered you trade. The rules state 5 pips above and below. In the case of a buy if you just put it 5 pips above it is really only 2 pips because it will buy you at the bid. So you have to put it 5 pips above + the spread (3 pips) so for a buy it is 8 pips above. You do his also when you place you stop on a sell (5 pips + your spread) hope this clears things up. If you made money on this consider it your lucky day and move on

-Sterling
Sterling, I'm still not convinced, I didn't forget the spread

Calculate my case with me:
high of setup bar = 1.5461;
buy order at 1.5461+5+3=1.5469;
doji made an high of 1.5467... at the bid, so the ask made a high at 1.5470 and triggered my order by one pip.

Anyway I'm just demotrading it, no money involved... but I wonder why I have different values, if we have the same charts
  • #1,046
  • Nov 12, 2008 11:49pm Nov 12, 2008 11:49pm
Sterling, you are in a sell trade right now from about 1.5538? or no trade, like the trade me and also tonirai are in??
See our charts on previous page where we are in that trade. This trade is currently plus 390 pips.
  • #1,047
  • Edited Nov 13, 2008 12:04am Nov 12, 2008 11:53pm | Edited Nov 13, 2008 12:04am
Quoting tonirai
Sterling, I'm still not convinced, I didn't forget the spread

Calculate my case with me:
high of setup bar = 1.5461;
buy order at 1.5461+5+3=1.5469;
doji made an high of 1.5467... at the bid, so the ask made a high at 1.5470 and triggered my order by one pip.

Anyway I'm just demotrading it, no money involved... but I wonder why I have different values, if we have the same charts
Dude you completely right!!! I cant believe I didnt catch that. I guess thats what taking a month off of trading this system will do to ya. When I actually am placing the orders I dont make mistakes but when I just post charts I guess I miss some things. Ill be going back live the fist of December so we wont have this problem anymore. Even tho you only have to be up every 4 hours sometimes I get tired of doing that and will take a month off. Thanks for keeping me on my toes and your completely right! I will adjust the current chart right now and give a much better monthly pip count lol my bad!

Sorry guys re-check the current chart a few post back for the current situation and true pip count.

-Sterling
Founder of Day Trading Forex Live
  • #1,048
  • Nov 13, 2008 12:03am Nov 13, 2008 12:03am
stersuhr,
It only mean you have attentive students

viperzz,
short since 1.5538?
No, got reversed (long) at the doji, then stopped & reverse at the next bar, so... short since 1.5341.

See you guys tomorrow, it's 6 am here, going to sleep... Glad I don't work these days (I'm at home sick), orelse...
  • #1,049
  • Nov 13, 2008 12:07am Nov 13, 2008 12:07am
Quoting tonirai
stersuhr,
It only mean you have attentive students

viperzz,
short since 1.5538?
No, got reversed (long) at the doji, then stopped & reverse at the next bar, so... short since 1.5341.

See you guys tomorrow, it's 6 am here, going to sleep... Glad I don't work these days (I'm at home sick), orelse...
Yes thats good to see that teaching this method to people is getting threw. Thank you again...its good to have people like you and others in here that really understand the system for the most part.

-Sterling
Founder of Day Trading Forex Live
  • #1,050
  • Nov 13, 2008 12:40am Nov 13, 2008 12:40am
Quoting tonirai
stersuhr,
It only mean you have attentive students

viperzz,
short since 1.5538?
No, got reversed (long) at the doji, then stopped & reverse at the next bar, so... short since 1.5341.

See you guys tomorrow, it's 6 am here, going to sleep... Glad I don't work these days (I'm at home sick), orelse...

oooops that was typo, I meant 1.5338, you got in 1.5341- 3 pips difference- must be because I added spread on short and you didn't.
  • #1,051
  • Nov 13, 2008 4:05am Nov 13, 2008 4:05am
Hi sterling

I was under the impression that you would close the position on Friday at the closing price which you did, and then wait for a new setup bar on Sunday evening to enter a new trade; if this was the case the 1st blue bar of your chart on Sunday evening should be the 1st setup bar and going short from there without first going long and then reversing to short.

Is this not correct?
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Regards
  • #1,052
  • Nov 13, 2008 5:16am Nov 13, 2008 5:16am
Trying to learn the system and having some problems with the basics. In step 1 (no I haven't gotten passed that yet we're looking at 5 pips above the high 5ema or 5 pips below the low 5ema. Well, which 5ema stage are we looking at? The very last numbers from the previous 4h period?. Like if the time is now 11 am, do I evaluate the 5ema from the 8am values? Or do I wait for the LAST bar to finish formation, then I evaluate it for a setup or reversal? Thanks in advance.
  • #1,053
  • Nov 13, 2008 5:19am Nov 13, 2008 5:19am
Quoting howard
Hi sterling

I was under the impression that you would close the position on Friday at the closing price which you did, and then wait for a new setup bar on Sunday evening to enter a new trade; if this was the case the 1st blue bar of your chart on Sunday evening should be the 1st setup bar and going short from there without first going long and then reversing to short.

Is this not correct?
Hey Howard,
See Sterlings post here
http://www.forexfactory.com/showpost.php?p=2335526&postcount=929
about what happened when we closed on Friday, I think he explained it well there.
The bar we closed out on Friday was actually a setup bar to go long, so when the market opened and gapped above it we immediately entered a long at the very start of the new blue bar, if it went the other way and opened the same price as Friday or gapped below we would have re-entered short. We don't wait for a new candle on market open we immediately enter one way or the other to continue on the position of last week.
If I am wrong sterling please correct.

Paul
  • #1,054
  • Nov 13, 2008 5:29am Nov 13, 2008 5:29am
Quoting CitiTrade
Trying to learn the system and having some problems with the basics. In step 1 (no I haven't gotten passed that yet we're looking at 5 pips above the high 5ema or 5 pips below the low 5ema. Well, which 5ema stage are we looking at? The very last numbers from the previous 4h period?. Like if the time is now 11 am, do I evaluate the 5ema from the 8am values? Or do I wait for the LAST bar to finish formation, then I evaluate it for a setup or reversal? Thanks in advance.
We are looking at the last bar that closed, at any stage of it's formation it has to have at least penetrated the one EMA by 5 pips, it can even close back inside just as long at some point during it's 4 hours ( we are using 4H candles) it past it. Even if it starts already outside the EMA and closes outside it is still counted as being 5 pips past.
Yes the bar must finish before being evaluated- why? Because if it happens to touch both EMA's as it is forming it is disqualified as a setup and we must wait and see what the next one does.
Hope that helps. If not have a look at all the charts that have been posted throughout the 70 odd pages of this thread, you will see them easy.
  • #1,055
  • Nov 13, 2008 5:41am Nov 13, 2008 5:41am
Hi Sterling,

I'm new to forex and would just like to express my thanks to you.

After trawling through the forums, this is the best system to base my future trading on, I have come across. It suits my timeframe and I like the fact it is totally mechanical. The system is fairly simple to understand and you have put a lot of work into this thread; keep up the great work.

My question to you concerns akukaya's system which was a result of your challenge to come up with a more profitable mechanical system. Would you consider using this type of system in your account (ie. one using a martingale style of money management). My feeling is that even though these type of systems may be profitable in the short term, they can produce heavy drawdowns.
  • #1,056
  • Nov 13, 2008 5:51am Nov 13, 2008 5:51am
Quoting viperzz
Hope that helps. If not have a look at all the charts that have been posted throughout the 70 odd pages of this thread, you will see them easy.
It sure does. Yes, I have been reading the thread for the past couple of days. Actually, something on the charts don't add up (I must be getting the logic wrong). First of all, I think the word "at least" is missing from the instructions. Price must go above/below... at least by 5 (right)? Second. I am looking at the very first chart posted by Ster. in post #2. According to the way I understood the logic, this chart has more setup bars than pointed out by the red arrows. For example, setup bar number 8... seemingly the 7 bars before it qualify as setup bars, no?
  • #1,057
  • Nov 13, 2008 6:27am Nov 13, 2008 6:27am
Hi can you explain some examples of taking profit with charts I still don't get that. Thanks
My Email For Help: [email protected]
  • #1,058
  • Nov 13, 2008 6:33am Nov 13, 2008 6:33am
Quoting CitiTrade
It sure does....
Yes this is because you have a setup bar, say a setup for a long/buy trade it is past the low ema, you put the buy stop above it when closed, if the next bar then makes a lower low past the previous setup and closes without hitting your buy, the first setup is canceled and that becomes your new one. It keeps going on and on like this if lower lows are being made until finally the next candle breaks it's high and puts you in the buy.
Sterling has only put the red arrows below those particular setup bars as they were the ones that has a following "reversal bar" trigger the buy, you might say the were the lowest low followed by a higher high.
  • #1,059
  • Nov 13, 2008 9:13am Nov 13, 2008 9:13am
Quoting tcmm
Hi can you explain some examples of taking profit with charts I still don't get that. Thanks
We only take profit when we have a signal to enter the opposite way (or if we get stopped in profit)...

Do you understand the concept of the setup bar?
If you are short and have a setup bar to go long:
If its high is broken by 5 pips+spread, it's a sign to enter in the opposite trade, so we get stopped from the previous short there, and enter long there, also.

You'll have an example of the current situation in my next post.
  • #1,060
  • Nov 13, 2008 9:37am Nov 13, 2008 9:37am
OK, current situation:

bar 1 was a setup bar;

bars 2 & 3 didn't qualify neither for a new setup bar nor for a reversal bar, so we started looking for a new setup bar from now on (previous setup bar was cancelled).
At this point, as we don't have a setup bar to put our orders, we follow the 50% rule and place our stop at 50% between the entry and the lower low;
Entry was 1.5341, and lowest low was bar 1 at 1.4830;
So 50% is at 1.50855 - our new stop until a new setup bar shows up;

bar 4 qualified for a setup bar, so we moved our stop accordingly above, and placed our buy stop at the same point (with stop bellow);

bar 5 was a new setup bar, so we moved all previous orders according to its high & low (don't forget the 5 pip rule for both, plus spread for buy);

We now began bar 6, which hasn't trigger any of the orders, neither qualifies for a new setup bar (for now).

So current short has a stop at 1.4976;
Reversal buy stop order is placed at the same 1.4976, with stop at 1.4766.
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