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4H 5EMA System

  • #1,321
  • Nov 20, 2008 10:25am Nov 20, 2008 10:25am
Quoting El Dee
Hi Piptrees - If you're stopped out before the reversal bar closes you must wait for a new setup bar - not go straight back in.

And yes again - the market can go further down before it goes up so the orders could be trigerred in the wrong order.

I've not seen any reason other than this, and that we only look at the chart every 4 hours but if the market has moved that far up and down in one period it could suggest instability / whipsaws which we don't want to be in!
Hi El Dee,
Thanks for your quick response on this. But the rule below clearly states that once we get stopped out, we immediately put in the order to go the opposite direction. The rule in question is:
3.) Lets say you got a buy signal and price went 80 pips in your favor and then went against you and stopped you out, at which point you reversed the trade according to the rules. So where would you put your stop? Your stop would be placed 5 pips above the high from when you got in the trade. If you get stopped out of your reversal trade you do not put another reversal trade in the market.

Any thoughts on this? Thanks again cos I am in this situation right now!
  • #1,322
  • Nov 20, 2008 10:28am Nov 20, 2008 10:28am
Quoting TimeFreedom
A quick question to anyone that will help. Please take a look at the attached chart and let me know if I would use bar #1 for my setup bar or bar # 2? Keep in-mind that this would be the first trade. The reason I ask is bar #2 is lower than bar #1.

TimeFreedom
Bar 1 is the setup bar , lower low
Regards
  • #1,323
  • Nov 20, 2008 10:32am Nov 20, 2008 10:32am
My chart shows that the system is flat at the moment, anybody else has the same?

El Dee is your position flat? It is one of those dubious cases
Regards
  • #1,324
  • Nov 20, 2008 10:37am Nov 20, 2008 10:37am
Quoting piptrees
Hi El Dee,
Thanks for your quick response on this. But the rule below clearly states that once we get stopped out, we immediately put in the order to go the opposite direction. The rule in question is:
[font=Arial][size=4]3.) [color=black]Lets say you got a buy signal and price went 80 pips in your favor and then went against you and stopped you out, at which point you reversed the trade according to the rules. So where would you put your stop? Your stop would be placed 5 pips above the high from when you got in the trade....
This rule is dealing with where to set your stop when you have reversed the position ACCORDING TO THE RULES, and the rules say that set your reverse order ONLY when reversal bar closes
Regards
  • #1,325
  • Nov 20, 2008 10:39am Nov 20, 2008 10:39am
Thanx for the quick responce. I am working on an EA and wanted to make sure I understand all aspects of the strat.

TimeFreedom

Quoting howard
Bar 1 is the setup bar , lower low
  • #1,326
  • Nov 20, 2008 10:42am Nov 20, 2008 10:42am
Quoting TimeFreedom
Thanx for the quick responce. I am working on an EA and wanted to make sure I understand all aspects of the strat.

TimeFreedom
That is great
Regards
  • #1,327
  • Nov 20, 2008 10:47am Nov 20, 2008 10:47am
Hi Howard,

I was short from #1 but was stopped out at #2 cos it was a signal to long. Then #2 made a low that was lower than the previous bar so I immediately reversed and is short again now.
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  • #1,328
  • Nov 20, 2008 10:50am Nov 20, 2008 10:50am
Quoting TimeFreedom
A quick question to anyone that will help. Please take a look at the attached chart and let me know if I would use bar #1 for my setup bar or bar # 2? Keep in-mind that this would be the first trade. The reason I ask is bar #2 is lower than bar #1.

TimeFreedom
I read your post again, your chart shows that bar 1 has the lower low but you say that bar 2 is lower than bar 1.
Whichever has the lower low is the setup bar after it closes, obviously bar 1 has already closed
Regards
  • #1,329
  • Nov 20, 2008 11:05am Nov 20, 2008 11:05am
Quoting piptrees
Hi Howard,

I was short from #1 but was stopped out at #2 cos it was a signal to long. Then #2 made a low that was lower than the previous bar so I immediately reversed and is short again now.
You are using interbankfx charts in which 4 hour bars start one hour later than our charts, 00GMT, however bar #2 has closed your short from bar #1 and at the same time has put you in a long trade, your long trade should have also been stopped out on the same bar; this is the case where you get in a trade and stop out on the same bar, and you should not reverse the position until the reversal bar closes
Regards
  • #1,330
  • Nov 20, 2008 11:13am Nov 20, 2008 11:13am
Quoting howard
You are using interbankfx charts in which 4 hour bars start one hour later than our charts, 00GMT, however bar #2 has closed your short from bar #1 and at the same time has put you in a long trade, your long trade should have also been stopped out on the same bar; this is the case where you get in a trade and stop out on the same bar, and you should not reverse the position until the reversal bar closes
Hi Howard,

Thanks for your help on the above. But why do we have to wait till the reversal bar closes before we reverse? How do i reverse, do i short at the low of #2(plus 8 pips)?
  • #1,331
  • Nov 20, 2008 11:18am Nov 20, 2008 11:18am
Quoting piptrees
Hi Howard,

I was short from #1 but was stopped out at #2 cos it was a signal to long. Then #2 made a low that was lower than the previous bar so I immediately reversed and is short again now.
Yowza! I thought I had this system just about cracked but then PipTrees throws in this left-ball!! I thought this was simple! In my chart (IG-Index) I tagged 1 the SetUp bar and 2 the Reversal bar. I went short at the Close of the reversal bar at 15,027 and am still short.

PLEASE explain the business about getting stopped-out at your bar #2. I am completely mystified! Have I missed something here?

CB
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  • #1,332
  • Nov 20, 2008 11:31am Nov 20, 2008 11:31am
Quoting Codebreaker
Yowza! I thought I had this system just about cracked but then PipTrees throws in this left-ball!! I thought this was simple! In my chart (IG-Index) I tagged 1 the SetUp bar and 2 the Reversal bar. I went short at the Close of the reversal bar at 15,027 and am still short.

PLEASE explain the business about getting stopped-out at your bar #2. I am completely mystified! Have I missed something here?

CB
Hi Codebreaker,

If you look at my chart, after being short from #1, I was happily short until a long signal came at #2 as it made a higher high than the previous bar by about 12 pips. Thats when my short was stopped out and a buy position was taken. Then #2 made a lower low than the previous bar and that stopped out my buy. So i am short from 1.4809 which is the low of the candle prior to #2.
  • #1,333
  • Nov 20, 2008 11:35am Nov 20, 2008 11:35am
Quoting piptrees
Hi Howard,

Thanks for your help on the above. But why do we have to wait till the reversal bar closes before we reverse? How do i reverse, do i short at the low of #2(plus 8 pips)?
That is what the rules say, after reversal bar closes; and that is why I said my chart shows a flat position, hopefully Sterling will clarify.

By the way it is 5 pips below the low for going short not 8 pips; 8 pips is for going long above the high, 5 pipps+spread
Regards
  • #1,334
  • Nov 20, 2008 11:39am Nov 20, 2008 11:39am
Quoting piptrees
Hi Codebreaker,

If you look at my chart, after being short from #1, I was happily short until a long signal came at #2 as it made a higher high than the previous bar by about 12 pips. Thats when my short was stopped out and a buy position was taken. Then #2 made a lower low than the previous bar and that stopped out my buy. So i am short from 1.4809 which is the low of the candle prior to #2.
Hi PipTrees

Thanks for the explanation - I can see exactly why you reversed. But I am currently too stupid to have learned this rule. Which (on this lucky occasion) saved me from an unnecessary whipsaw :-))

CB
  • #1,335
  • Nov 20, 2008 11:42am Nov 20, 2008 11:42am
Lucky you...
  • #1,336
  • Nov 20, 2008 11:49am Nov 20, 2008 11:49am
Quoting TimeFreedom
A quick question to anyone that will help. Please take a look at the attached chart and let me know if I would use bar #1 for my setup bar or bar # 2? Keep in-mind that this would be the first trade. The reason I ask is bar #2 is lower than bar #1.

TimeFreedom
Bar 1 is your setup bar, bar 2 has not made a lower low yet so is not a setup bar. If it does not make a lower low or trigger the buy stop order on bar 1 it will be a failed reversal bar.
If it does finish lower than bar 1, it will become your new setup bar.
Hope this is clear!
You don't have to be right, just don't be too wrong
  • #1,337
  • Nov 20, 2008 12:14pm Nov 20, 2008 12:14pm
Quoting howard
My chart shows that the system is flat at the moment, anybody else has the same?

El Dee is your position flat? It is one of those dubious cases
Sorry for late response - yes, should be flat now.

I'm in the middle of backtesting the year on 1 day timeframe - will post results later.
You don't have to be right, just don't be too wrong
  • #1,338
  • Nov 20, 2008 1:05pm Nov 20, 2008 1:05pm
Quoting Ezzy
Hi stersuhr

I followed this thread at the beginning, but after not being able to follow the 4hr regime given to time constraints I gave up your system.

Recently however I have begun to use the same system with the same rules in a daily chart. I must say it is working great! so far. It is giving me consistently profitable trades and of course I only need to be at my computer once a day.

The purpose of my message is to give you a big thanks for sharing your system that has no doubt taken a lot of your time and hard work to devise.

Once again...
NO problem man glad I could help. I hope the pips continue on the daily for you!!!

-Sterling
Founder of Day Trading Forex Live
  • #1,339
  • Nov 20, 2008 1:09pm Nov 20, 2008 1:09pm
Quoting Pip Hunterr
Hey Sterling & everyone

To me its laughable the way those of you who talk about changing the rules to try and improve your pip count. I was taught to never let a winner become a loser. I stick to that rule. However that does not apply to a purely mechanical system. Mechanics are the only thing that apply here.

When I first started reading this thread almost a month ago what mostly interested me was the simplicity, the fact your in on all the big moves, and the fact that most of the traders out there watch the 4hr chart. I dont post much because...
Hey bud thanks for the post. I would be happy to reword the rules. Someone in here posted some re-worded rules but I cant find them. I really dont know how to word it better.

-Sterling
Founder of Day Trading Forex Live
  • #1,340
  • Nov 20, 2008 1:11pm Nov 20, 2008 1:11pm
Quoting bullrock
Bone in the head or head in the bone? That is the question.

I just think this is a very good system. And I also think that with some added filters, ie do we trend or not trend, can work on other stuff as well. I am researching. I am thinking about simple stuff. 200ema OR rsi OR adx OR whatever.

The whatever indicator is the best I think.
Yeah I have been thinking along the same lines. There has to be a pretty simple indicator out there that can be used and yet still keep this system 100% mechanical.

-Sterling
Founder of Day Trading Forex Live
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