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4H 5EMA System

  • #1,081
  • Nov 13, 2008 6:43pm Nov 13, 2008 6:43pm
Quoting tonirai
Yes and no :
If we didn't come to the computer since this bar's open (we're supposed not to), we still don't know it made a lower low;
So the stop is still where it was, and we still don't have a reversal order placed;
We will only realize this in a while


I'm the one who thanks you for this wonderfull thread!
Helping is the least we can do
Ok well i guess I have to specify more clearly...when I said now we move are stop below the new low I meant when the reversal bar closes. I thought this would have been clear, sorry ill be more specific next time.

-Sterling
Founder of Day Trading Forex Live
  • #1,082
  • Nov 13, 2008 6:48pm Nov 13, 2008 6:48pm
Quoting viperzz
Hey Tonirai,
Have a look at Sterlings post #2 on the first page of this thread
http://www.forexfactory.com/showpost.php?p=2259196&postcount=2

he posted a chart, trade number 7 on that chart has this very situation where we get stopped out the same bar before we get to place a reversal,
Sterling explains there that we then just sit out of the market completely until a new valid setup bar is made, which would only have to pass the EMA buy 5 pips. We do not place another reversal under the new low.

At post number #7 first page he explains...
Id like to thank you also for answering questions...thats eases my load and lets me put more effort into this system. Im always backtesting different variables on this system to make it better and you and others help me make this better for all of us. As always when I find something that will make it better you guys will be the first to know!

-Sterling
Founder of Day Trading Forex Live
  • #1,083
  • Nov 13, 2008 6:58pm Nov 13, 2008 6:58pm
Quoting El Dee
Sterling, I would appreciate it if you could give an answer to my question above - I guess what I am asking is would an EA place a reverse stop order as soon as an order was triggered or would it wait for the candle to close?
It will trade per the rules and place the reversal order when the reversal bar closes.

-Sterling
Founder of Day Trading Forex Live
  • #1,084
  • Nov 13, 2008 7:17pm Nov 13, 2008 7:17pm
Quoting Pip Hunterr
Thanks Steadyincome

If I understand you correctly you are trading the open of the Sydney market and scalping your trades off the clearing when the open hits. Then doing the same for the London open also. I am here in the Philippines so I think we are close to the same time zone. As I look back on my charts this seems to be a really good scalping strategy. You just dont want to still be in any trades about an hour after each market has its open. Let me know if I am wrong about something.

I am having trouble downloading the EA on this. My computer...
Hello PIP hunter,It does not really matter when you turn on the robot, sometimes it takes 30 to 40 minutes before any trades trigger,this morning in Australia i opened the robot at about 9.30 am and it did 8 trades,7 winners and 1 looser for +101 pips, the trades are in my live account so will not post details, yesterday i opened my Demo account and it did an auto update and it has not run properly sinse,it takes 3 to 5 restarts before it loads so have not done any trades. Thank You Stirling for your devotion to perfecting this 4HR5EMA system and you are right in saying that using the robot on 5,15,or 30 minute charts does not work for me but the 1Hr is very good. My results at the end of month is what matters to me. Im unable to get my head around all the teck stuff that you all are talking about, but keep it up.
  • #1,085
  • Nov 13, 2008 7:21pm Nov 13, 2008 7:21pm
Quoting stersuhr
Id like to thank you also for answering questions...thats eases my load and lets me put more effort into this system. Im always backtesting different variables on this system to make it better and you and others help me make this better for all of us. As always when I find something that will make it better you guys will be the first to know!

-Sterling
No problems Sterling it's the least I can do to answer the odd question for others, I just hope I have it right always haha.

I was discussing this with tonirai in earlier posts just want clarification.

I wrote on the pic.
Attached Image (click to enlarge)
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  • #1,086
  • Nov 13, 2008 7:30pm Nov 13, 2008 7:30pm
Quoting steadyincome
Hello PIP hunter,It does not really matter when you turn on the robot, sometimes it takes 30 to 40 minutes before any trades trigger,this morning in Australia i opened the robot at about 9.30 am and it did 8 trades,7 winners and 1 looser for +101 pips, the trades are in my live account so will not post details, yesterday i opened my Demo account and it did an auto update and it has not run properly sinse,it takes 3 to 5 restarts before it loads so have not done any trades. Thank You Stirling for your devotion to perfecting this 4HR5EMA system and...
If you backtest this system on the 4H and then do it on the 1H, over time the 4H is more profitable. Im just tryin to help when I say this. Not saying you cant modify a few things, use the one hour and beat the original system, im just saying if you trade them the same just on there respective timeframes the 4H is more profitable.

-Sterling
Founder of Day Trading Forex Live
  • #1,087
  • Nov 13, 2008 7:33pm Nov 13, 2008 7:33pm
Quoting viperzz
No problems Sterling it's the least I can do to answer the odd question for others, I just hope I have it right always haha.

I was discussing this with tonirai in earlier posts just want clarification.

I wrote on the pic.
It should be under the bar labeled #2. This system has its base in support/resistance and since bar #2 bounced off of "support" you want the stop 5 pips below that. You should also have your reversal order there as well. Ive said this in a few post but ive never wrote it in the rules...I dont think. Ill do that now before it effects a trade.

-Sterling
Founder of Day Trading Forex Live
  • #1,088
  • Nov 13, 2008 7:37pm Nov 13, 2008 7:37pm
Thanks Sterling- Understood, so the stoploss for the reversal order under 2 now will be placed above 2 as well? or will it remain at our buy order currently in market

tonirai- You had it right!
  • #1,089
  • Nov 13, 2008 7:44pm Nov 13, 2008 7:44pm
Quoting viperzz
Thanks Sterling- Understood, so the stoploss for the reversal order under 2 now will be placed above 2 as well? or will it remain at our buy order currently in market

tonirai- You had it right!
Lets say we were in a buy and it went 100 pips in are favor and then went and stopped us out and triggered are reversal short order, where does the stop go. It goes 5 pips plus the spread above the high from the time we got in the original buy trade. I hope this makes sense. If not this is written in the rules already and there is a link to a post that explains it very well.

-Sterling
Founder of Day Trading Forex Live
  • #1,090
  • Nov 13, 2008 7:47pm Nov 13, 2008 7:47pm
Quoting stersuhr
Lets say we were in a buy and it went 100 pips in are favor and then went and stopped us out and triggered are reversal short order, where does the stop go. It goes 5 pips plus the spread above the high from the time we got in the original buy trade. I hope this makes sense. If not this is written in the rules already and there is a link to a post that explains it very well.

-Sterling
Thanks Sterling yes I know that rule, the situation just appeared a little different here, but I understand now.
  • #1,091
  • Nov 13, 2008 7:49pm Nov 13, 2008 7:49pm
Quoting viperzz
Thanks Sterling yes I know that rule, the situation just appeared a little different here, but I understand now.
How is it different? Im just asking so I can help

-Sterling
Founder of Day Trading Forex Live
  • #1,092
  • Nov 13, 2008 7:58pm Nov 13, 2008 7:58pm
Quoting stersuhr
How is it different? Im just asking so I can help

-Sterling
Just different to me in that I hadn't seen the situation yet where the reversal candle made a lower low first then went on to make a higher high than the setup- I was always used to moving stops closer you see rather than further back. It's all clear now though- Thanks.
  • #1,093
  • Nov 13, 2008 8:00pm Nov 13, 2008 8:00pm
Quoting viperzz
Just different to me in that I hadn't seen the situation yet where the reversal candle made a lower low first then went on to make a higher high than the setup- I was always used to moving stops closer you see rather than further back. It's all clear now though- Thanks.
Oh ok ic. Yeah its a little different situation definatly.

-Sterling
Founder of Day Trading Forex Live
  • #1,094
  • Nov 14, 2008 4:21am Nov 14, 2008 4:21am
Sterling, you said in post #485 that:
Quote
at the close of the reversal bar you put the sell stop order in at the same price the buy order will get stopped out.

Here's the chart: http://www.forexfactory.com/attachme...1&d=1224827896

and regarding this chart,
http://www.forexfactory.com/attachme...1&d=1226625700

you must be in short now because of reversal trade right? Because candle #2 is now a reversal bar.. as you said: "at the close of the reversal bar you put the sell stop order in at the same price the buy order will get stopped out."

or do you treat candle # 2 as a setup bar?

thanks for explaining
  • #1,095
  • Nov 14, 2008 4:46am Nov 14, 2008 4:46am
As candle #2 has made a lower low it is now our latest setup bar, therefore our stop for the long trade and the sell stop is below bar #2
Regards
  • #1,096
  • Nov 14, 2008 4:51am Nov 14, 2008 4:51am
Quoting ivonivon
Sterling, you said in post #485 that:


Here's the chart: http://www.forexfactory.com/attachme...1&d=1224827896

and regarding this chart,
http://www.forexfactory.com/attachme...1&d=1226625700

you must be in short now because of reversal trade right? Because candle #2 is now a reversal bar.. as you said: "at the close of the reversal bar you put the sell stop order in at the same price the buy order will get stopped out."

or do you treat candle # 2 as a setup bar?

thanks...
The second chart you posted there was mine, and I had the sell stop placed wrong, sterling corrected me in a later post.
candle 1 was the setup bar,
Candle 2 was the reversal bar, what happened was candle 2 made that lower low first and then hit the buy last before it closed( sell stop wasn't there at that point)- so we are in a buy.
When candle 2 closed the stoploss for that buy should be moved to under candle 2 as it is now the lower low and also a pending sell stop in the same spot, you can see my sell stop and SL are under candle 1 in the pic as I was unsure, that is not correct. Sterling corrected me and also updated the rules on the first page to make this clear.

The sell stop at the bottom which should currently be further away under candle 2 also has a SL for itself if triggered and that will be above the high of candle 2 as it is the highest point at where we got into the buy trade we are in now, that is also in page one rules.
Hope this Helps- and Sterling correct me if I'm wrong in any way.
  • #1,097
  • Nov 14, 2008 4:57am Nov 14, 2008 4:57am
Sterling, thanks for earlier reply - I've seen examples now where not placing the reverse order till the bar is closed would save me so I understand the reason now - swings & roundabouts!

On the chart shown you can see we are flat during the rally but there is no valid entry for the reverse at the top. Would you enter on the 50% level shown (as if it was a reversal order if you had been long thru the rally) or wait for a fresh entry setup?
Attached Image (click to enlarge)
Click to Enlarge Name: EUR_USD Spot.png Size: 15 KB
You don't have to be right, just don't be too wrong
  • #1,098
  • Nov 14, 2008 5:29am Nov 14, 2008 5:29am
50% rule only applies to the stop loss when you are in a trade and have a profit of over 150 pips and there is no valid setup bar to place your stop loss.

There is no 50% rule for entry, you should wait for a valid new setup bar for the entry.
Regards
  • #1,099
  • Nov 14, 2008 5:31am Nov 14, 2008 5:31am
Could you all please size your charts so we wont have to scrol to left and right
Regards
  • #1,100
  • Nov 14, 2008 7:16am Nov 14, 2008 7:16am
An EA can work exactly how you wish. I have sent Sterling a demo EA which I think he is testing at the moment. This EA exactly follows Sterling's rule (Initial Stop Placement rule 2) "Only put a trade to go the other direction in the market after a proper reversal bar closes". I have assumed that this overrides "If you are long and get stopped out you enter short when you get stopped out".

The advantage of an EA is that it can work all the time so the restrictions of having to be around every 4 hours are overcome.

Once Sterling is happyy that the EA is doing as he expects it will be possible to backtest alternatives to his strategy. That way we should be able to optimise the profitability of this system.
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