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4H 5EMA System

  • #1,341
  • Nov 20, 2008 1:12pm Nov 20, 2008 1:12pm
Quoting piptrees
2.) Example: A proper long setup bar forms and you place your buy stop and stop loss. The next bar makes a lower low and then triggers the buy stop, in that order...where does the stop go now? The stop would go 5 pips below the low of the reversal bar. Essentially the reversal bar is also the setup bar. This is a very rare case but it does happen, and thus we need a rule for it. This happens because we do not watch the market 24/7 only a brief glance every 4 hours once you understand the system....
The rules state that you only put a reversal trade it once the reversal bar that triggers the trade closes. So in your case you would wait for the next setup bar and reversal bar.

-Sterling
Founder of Day Trading Forex Live
  • #1,342
  • Nov 20, 2008 1:15pm Nov 20, 2008 1:15pm
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....
I think your missing the rule that you only put a reversal order in once the reversal bar closes.

-Sterling
Founder of Day Trading Forex Live
  • #1,343
  • Nov 20, 2008 1:19pm Nov 20, 2008 1:19pm
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 should not have reversed the trade. You only put the reversal order in once the reversal candle closes. Alpari charts still have us short from 1.5014 with no buy order having been triggered as of yet.

-Sterling
Founder of Day Trading Forex Live
  • #1,344
  • Nov 20, 2008 1:22pm Nov 20, 2008 1:22pm
If you guys have any questions you want answered Ill be around for another 15 minutes or so, otherwise ill have the daily chart later today.

-Sterling
Founder of Day Trading Forex Live
  • #1,345
  • Nov 20, 2008 1:36pm Nov 20, 2008 1:36pm
Hello Sterling
It will be helpful If you can put numbers( Entry and stop loss for trade #s) in the daily charts as well.It will make things more clear.
Bhupinder
  • #1,346
  • Nov 20, 2008 2:16pm Nov 20, 2008 2:16pm
Quoting stersuhr
Sorry Ive been slacking a bit on the charts, I was getting burned out a bit. Here is the chart that brings us current. We are up +595 for the month and have a short going right now that is well in profit.

Trade #16 +298 pips

Trade #17 -118 pips

Trade #18 -141 pips

Trade #19 -39 pips

Trade #20 +26 pips

Trade #21 pending short position

Good month going so far hopefully it end up the same. We are well in profit on the short and as I said have a closed total pip count for the month of +595. Hope you guys are making some money.

-Sterling...
Sterling,
On trade#16 you are using Alpari. For myself, using IBFX, I have the week start with a candle on a four hour chart that only lasts 1 hour. In this case I would have gotten a better entry, but generally, would you combine that one "off" candle with the next four hours? Or maybe just ignore it? I belive in a previous post you said you are switching to another type chart with different closes soon.
I have been doing this for 1 1/2 months with you, this is the choppiest week yet!
Michael
  • #1,347
  • Edited 5:29pm Nov 20, 2008 2:30pm | Edited 5:29pm
I've backtested from Jan '08 in the daily timeframe - that means 1 update per day at midnight (GMT) details as follows:
Jan +41
Feb +385
Mar -23
Apr -36
May +129
Jun +362
Jul -24
Aug +1351
Sep +532
Oct +1796
Total = 4513 in 10 months
Average = 451 / month
Max drawdown if entered at worst time is 464 pips
Max stop loss hit was 373 pips
No of trades was 63. I didn't include spread in my test so at 3 pips / trade that's 190 lost in total.
Number of extra hours sleep = 65 / year
You don't have to be right, just don't be too wrong
  • #1,348
  • Nov 20, 2008 3:07pm Nov 20, 2008 3:07pm
Quoting El Dee
I've backtested from Jan '08 in the daily timeframe - that means 1 update per day at midnight (GMT) details as follows:
Jan +41
Feb +385
Mar -23
Apr +964
May +129
Jun +362
Jul -24
Aug +1351
Sep +532
Oct +1796
Total = 5513 in 10 months
Average = 551 / month
Max drawdown if entered at worst time is 464 pips
Max stop loss hit was 373 pips
No of trades was 63. I didn't include spread in my test so at 3 pips / trade that's 190 lost in total.
Number of extra hours sleep = 65 / year
Max drawdown is less than 4 hourly
Average per month roughly the same as 4 hourly
Work required 15 mins per day
Regards
  • #1,349
  • Nov 20, 2008 3:09pm Nov 20, 2008 3:09pm
El Dee

Did you use alpari charts? They close at 11pm GMT
Regards
  • #1,350
  • Nov 20, 2008 3:52pm Nov 20, 2008 3:52pm
Quoting alllivemind
Sterling,
On trade#16 you are using Alpari. For myself, using IBFX, I have the week start with a candle on a four hour chart that only lasts 1 hour. In this case I would have gotten a better entry, but generally, would you combine that one "off" candle with the next four hours? Or maybe just ignore it? I belive in a previous post you said you are switching to another type chart with different closes soon.
I have been doing this for 1 1/2 months with you, this is the choppiest week yet!
Michael
hmm...ive never had to deal with that becasue I dont use those charts. I would think, and this is just my opinion I havent backtested it, that you should use that bar as a regular bar. Usually the market on Sunday jack around for a bit and then picks a direction atleast for the next 4-12 hours. I would just use that bar as a normal 4H bar and trade per the rules.

Yeah its been a bit choppy, but that just shows how strong this system is. A choppy market is the worst for this system and givin that fact were still up +595 pips, and thats what we have closed. Are short trade is up almost +300 pips in addition to the +595 we already have!

-Sterling
Founder of Day Trading Forex Live
  • #1,351
  • Nov 20, 2008 3:58pm Nov 20, 2008 3:58pm
Quoting howard
Max drawdown is less than 4 hourly
Average per month roughly the same as 4 hourly
Work required 15 mins per day
Hey thanks for backtesting that! If more people were like you and actually did some work instead of shooting from the hip with no proof to back it up we might have a even better system by now. Youve done something else, givin me the motivation to actually backtest it for myself to verify the results. I might do that tonight. I think that if the daily chart is even close to the 4H I might go to that in a few months after I do some "optimizing" for the daily instead of the 4H. Good work man! Keep it up!

As far as it being the same pips, it close but not quite. I just say +500 pips so people are more excited when it takes more. If you backtest last year its more like +700 pips. +150 more pips a month is still worth me getting up every 4 hours but I think we could tweak it a little to get those pips back and maybe switch this system to the daily. Maybe we could combine the 2 timeframes somehow. Entries on the 4H and then somehow use the daily for exits. I donno its all something that is going to take some time to figure out but Ill start working on that. Any other good ideas are welcome but please backtest them and come with some facts.

-Sterling
Founder of Day Trading Forex Live
  • #1,352
  • Edited 4:43pm Nov 20, 2008 4:07pm | Edited 4:43pm
Trade #21 - We are short from 1.5014 and got stopped out for a +31 pip profit.

Trade #22 - We went long from 1.4983 and got stopped out at 1.4911 for a -72 pip loss.

Pretty good month going. We have a closed total of +554 and are currently flat right now. Look for a setup bar to go long at the moment.

-Sterling
Attached Image (click to enlarge)
Click to Enlarge Name: nov 21st.jpg Size: 337 KB
Founder of Day Trading Forex Live
  • #1,353
  • Nov 20, 2008 4:23pm Nov 20, 2008 4:23pm
Quoting El Dee
I've backtested from Jan '08 in the daily timeframe - that means 1 update per day at midnight (GMT) details as follows:
Jan +41
Feb +385
Mar -23
Apr +964
May +129
Jun +362
Jul -24
Aug +1351
Sep +532
Oct +1796
Total = 5513 in 10 months
Average = 551 / month
Max drawdown if entered at worst time is 464 pips
Max stop loss hit was 373 pips
No of trades was 63. I didn't include spread in my test so at 3 pips / trade that's 190 lost in total.
Number of extra hours sleep = 65 / year
these calculations are wrong, I picked mar,april,may and all wrong,
I don't know how april for example is +964,
please post all of april trades so we can see if they follow rules or no,
april was -130 pips and here are april trades on daily using alpari(not aplari-us)
Attached File(s)
File Type: zip gbp-daily.zip   2 KB | 353 downloads
  • #1,354
  • Nov 20, 2008 4:27pm Nov 20, 2008 4:27pm
Quoting stersuhr
Trade #21 - We are short from 1.5014 and have the current stop at 1.4846 The market has now made a lower low so when the current bar closes we will move the stop to 1.4843 porvided the current bar does not make a higher high in the next hour. At the stop for the sell trade you should also have a buy stop order to go long.

Pretty good month going. We have a closed total of +595 and a additional short trade that is floating around the +300 pip mark.

-Sterling
Thanks sterling - can you explain why the bar @ 04.00 wasn't a reversal bar for the previous set up bar on your chart, as it appears to break the previous bars high by 10+ pips? Was it because it didn't open at a higher level for example? If it was wouldn't the stop and reverse be at the close of the previous set up bar?
  • #1,355
  • Nov 20, 2008 4:29pm Nov 20, 2008 4:29pm
Quoting howard
El Dee

Did you use alpari charts? They close at 11pm GMT
No - I use IG Index. I guess they will close at 11pm during DST
You don't have to be right, just don't be too wrong
  • #1,356
  • Nov 20, 2008 4:37pm Nov 20, 2008 4:37pm
Quoting stersuhr
Trade #21 - We are short from 1.5014 and have the current stop at 1.4846 The market has now made a lower low so when the current bar closes we will move the stop to 1.4843 porvided the current bar does not make a higher high in the next hour. At the stop for the sell trade you should also have a buy stop order to go long.

Pretty good month going. We have a closed total of +595 and a additional short trade that is floating around the +300 pip mark.

-Sterling
why the 4:00 bar on 11/20 which has a low of 1.4916 and high of 1.4975 wasn't a setup bar , this setup bar was followed by a reversal bar that triggered a buy
  • #1,357
  • Nov 20, 2008 4:38pm Nov 20, 2008 4:38pm
Quoting petersurrey
Thanks sterling - can you explain why the bar @ 04.00 wasn't a reversal bar for the previous set up bar on your chart, as it appears to break the previous bars high by 10+ pips? Was it because it didn't open at a higher level for example? If it was wouldn't the stop and reverse be at the close of the previous set up bar?
Wow I totally missed that. This time it worked in my favor. Ill go fix the chart to reflect this. Good eye, dont know how I missed that. Its very rare that you mess up in a market and you dont get screwed lol

-Sterling
Founder of Day Trading Forex Live
  • #1,358
  • Nov 20, 2008 4:56pm Nov 20, 2008 4:56pm
Quoting ziko123
these calculations are wrong, I picked mar,april,may and all wrong,
I don't know how april for example is +964,
please post all of april trades so we can see if they follow rules or no,
april was -130 pips and here are april trades on daily using alpari(not aplari-us)
HI Ziko - you're right!
My testing was done in the old fashioned pen & paper method!
I actually get -68 for April, I carried a wrong opening price forward.
The results are from the first trade that opened after the start of the month so the first trade that starts in April for example, starts on the 2nd - the last starts on the 29th but finishes in May.
This will obviously skew results if you are considering open positions at either end of the month.
If you have backtested it are your results for the 10 months close to mine with the correction for April?
A few other points - I didn't close for weekends and I used a 10 pip opening gap which would equate to a loss of 315 or so pips and I didn't consider the spread which results in my figures being up by 190 or so pips over the period.
Good job you were checking on me, I will edit my original post to update figures correctly
You don't have to be right, just don't be too wrong
  • #1,359
  • Nov 20, 2008 5:10pm Nov 20, 2008 5:10pm
Quoting El Dee
HI Ziko - you're right!
My testing was done in the old fashioned pen & paper method!
I actually get -68 for April, I carried a wrong opening price forward.
The results are from the first trade that opened after the start of the month so the first trade that starts in April for example, starts on the 2nd - the last starts on the 29th but finishes in May.
This will obviously skew results if you are considering open positions at either end of the month.
If you have backtested it are your results for the 10 months close to mine with the correction...

I will try to download the GBPUSD M1 data for 2008 and test all months,
the link for alpari data bank is not working
http://databank.alpari.org/h_mt/M1_GBPUSD.zip
  • #1,360
  • Nov 20, 2008 5:16pm Nov 20, 2008 5:16pm
I am also flat .I got stopped by alpari 08.00 am candle.
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