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4H 5EMA System

  • #1,541
  • Nov 24, 2008 6:01pm Nov 24, 2008 6:01pm
Quoting CitiTrade
Sterling,

I didn't see anything in the thread about the mechanism of taking profit other than to say when you get a signal to go in the other direction. I see that you take profit always at 5 pips above or below EMA (depending on the position). What exactly do you do to take profit at precisely this point, yet manage to wait for the bar to finish formation and even wait for the bar after it to confirm reversal, and thus to confirm the status of the previous bar as a setup bar so you can accept the reverse signal and take profit accordingly?
Perhaps I can help here CitiTrade. Closing a trade whether it be in Profit or Loss is governed by Stop placement, which in turn is governed by closed 4 hour Setup or Reversal bars. I suggest you refer again to page 1 where Sterling sets out the rules for "Exits", because there are no exceptions. I have attached a chart showing the most recent/current Setup bar (arrowed). My charts indicate this Setup bar had a LOW of 1.5076 and a HIGH of 1.5189. Therefore you should have a pending Sell order set at 1.5071 (5 pips below the LOW) with your SL at 1.5197 (5 pips + spread above the HIGH).
Attached Image
If there is ever any doubt then there is no doubt.
  • #1,542
  • Nov 25, 2008 1:30am Nov 25, 2008 1:30am
Well, reversal bar failed to come within the two bars following the setup bar, so we continue flat, and now waiting for a new setup bar.
  • #1,543
  • Nov 25, 2008 3:13am Nov 25, 2008 3:13am
Quoting tonirai
Well, reversal bar failed to come within the two bars following the setup bar, so we continue flat, and now waiting for a new setup bar.
Good to see how this keeps us out of whiplash trades..waiting for the next short reversal/new set up bar..
  • #1,544
  • Nov 25, 2008 3:17am Nov 25, 2008 3:17am
Quoting pitpiter
Hi guys.
I read thread and re read any place and now I'm in half off , I think I get it , but I want read all thread , in weekend I make some EA and testing them on historical data , and on mine opinion it's work good , but I don't sure . I am opened account on Alpari US and run it...
..no opened trades with the latest version after 12 hours on a 15 minute chart using default setting on a 5 dec place Alpari UK chart...
  • #1,545
  • Nov 25, 2008 3:27am Nov 25, 2008 3:27am
Quoting petersurrey
..no opened trades with the latest version after 12 hours on a 15 minute chart using default setting on a 5 dec place Alpari UK chart...
Yup were still flat guys. Looks like the current bar is going to be a setup bar as long as it dosent touch the other EMA. I traded all last night (im on EST) and havent slept yet so ve been up about 36+ hours, im going to bed. I wanted to have the daily chart done for ya but thats just not going to happen tonight. Ill have that tomorrow along with the current pip count as always. Chad if your here ill give you a ring tomorrow. If I forget call me sometime. Goodnight all.

-Sterling
Founder of Day Trading Forex Live
  • #1,546
  • Nov 25, 2008 3:51am Nov 25, 2008 3:51am
Quoting tonirai
Well, reversal bar failed to come within the two bars following the setup bar, so we continue flat, and now waiting for a new setup bar.
No pending order right?
  • #1,547
  • Nov 25, 2008 3:54am Nov 25, 2008 3:54am
Hello all
I want ask about what realy we can do when have revers
for ex
bar A is set up bar for short and we put sellstop when A is closed ,
we put triger on bar B , have sell , but price go north and stop our order on bar B
now with rule about revers we need put order buystop , when bar B closed with price - high +5 pips , stoploss low-5pips-spread (high and low from bar B)
from other side bar B is new set up bar for short and when bar B closed we need put order sellstop with price low-5 pips and stoploss high +5 pips +spread (high and low from bar B)
any word we need put two orders?
please confirm if am correct or say where I am wrong
thanks
good luck
pit
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  • #1,548
  • Nov 25, 2008 3:54am Nov 25, 2008 3:54am
Quoting Kristo
Perhaps I can help here CitiTrade. Closing a trade whether it be in Profit or Loss is governed by Stop placement, which in turn is governed by closed 4 hour Setup or Reversal bars. .
Hi Kristo,

Thanks for your help. My question is really not about the logic, but about the mechanism. I understood how and where to place an SL. But I still don't know how to take profit. Is it automated like SL? or do we do it manually? If it is automated and we place a value for TP like we did for SL, then what if it triggered by something other than a setup bar? This would be against the rules, no?
  • #1,549
  • Nov 25, 2008 4:28am Nov 25, 2008 4:28am
Quoting CitiTrade
Hi Kristo,

Thanks for your help. My question is really not about the logic, but about the mechanism. I understood how and where to place an SL. But I still don't know how to take profit. Is it automated like SL? or do we do it manually? If it is automated and we place a value for TP like we did for SL, then what if it triggered by something other than a setup bar? This would be against the rules, no?
What you're missing is that your SL is your take profit order;
If you're in a long, this long will only be closed when you'll enter short;
For that, at some point you'll have a setup bar to go short, at which low +5 pips you'll place the SL on the long (it's your exit, your take profit), AND the sell stop to enter the future short.

Review the rules if you still have doubts, and also some pages back, where trades where posted live
  • #1,550
  • Nov 25, 2008 4:44am Nov 25, 2008 4:44am
Quoting tonirai
For that, at some point you'll have a setup bar to go short, at which low +5 pips you'll place the SL on the long (it's your exit, your take profit), AND the sell stop to enter the future short.
Yes, I was missing that point. Given your above, you still need to enter an SL for the newly entered sell stop too, no? What threw me off is calling it SL when it is TP (two seperate entries in the metatrader).
  • #1,551
  • Nov 25, 2008 4:49am Nov 25, 2008 4:49am
You've got something wrong there.
What you have to imagine is that you only go to check on the trades (and place orders) every 4H, so:
Quoting pitpiter
bar A is set up bar for short and we put sellstop when A is closed ,
Yes, correct;

Quoting pitpiter
we put triger on bar B , have sell , but price go north and stop our order on bar B
Don't know what you mean by "we put trigger on bar B"...
We don't do anything until it's closed.
Like you said, it triggered the sell and then went up and triggered the stoploss on that order;

Quoting pitpiter
now with rule about revers we need put order buystop , when bar B closed with price - high +5 pips , stoploss low-5pips-spread (high and low from bar B)
This is where you're wrong:
The rules say you don't reverse a failed reversal bar;

Quoting pitpiter
from other side bar B is new set up bar for short and when bar B closed we need put order sellstop with price low-5 pips and stoploss high +5 pips +spread (high and low from bar B)
This is the only side... you start looking for a new setup bar, which is bar B itself.
  • #1,552
  • Nov 25, 2008 4:52am Nov 25, 2008 4:52am
Quoting CitiTrade
Hi Kristo,

Thanks for your help. My question is really not about the logic, but about the mechanism. I understood how and where to place an SL. But I still don't know how to take profit. Is it automated like SL? or do we do it manually? If it is automated and we place a value for TP like we did for SL, then what if it triggered by something other than a setup bar? This would be against the rules, no?
Happy to try to help Cititrade. I am also demoing this system on the 8 hour timeframe and at the moment I am still Long from yesterdays open. What Tonirai has described above is unfolding on the 8 hour TF. The trade is about 120pips in profit at the moment and a new Setup bar to possibly go short is forming. If it closes and forms as a proper Setup bar, I will then move my SL for the long trade to 5 pips below the low of the new Setup bar and also set my new Sell Stop at the same price. This is how profits (or losses) are realised. If you wish, can post the chart to illustrate, but its on the 8 hour not the 4 hour and I dont want to clutter up the thread with too many 8 hour charts.
If there is ever any doubt then there is no doubt.
  • #1,553
  • Nov 25, 2008 4:56am Nov 25, 2008 4:56am
Quoting CitiTrade
Yes, I was missing that point. Given your above, you still need to enter an SL for the newly entered sell stop too, no? What threw me off is calling it SL when it is TP (two seperate entries in the metatrader).
Carefull, it's SL, not TP;
if you're long, it will always be placed below the current price, so it's a SL.
Imagine it like a Trailing Stop that is manually moved.

As for the newly entered sell stop, yes, you put a SL for it, at the high+8 of the setup bar;
But be aware that, if the reversal bar makes a higher high before it triggers the sell, the SL on it has to be moved to that new high+8.
  • #1,554
  • Nov 25, 2008 5:12am Nov 25, 2008 5:12am
OK we appear to be short now - Alpari Uk was showing a new set up bar after the 2 failed reversals and the latest reversal bar has just broken the low by a few pips..
  • #1,555
  • Nov 25, 2008 5:19am Nov 25, 2008 5:19am
Quoting tonirai
Carefull, it's SL, not TP;
if you're long, it will always be placed below the current price, so it's a SL.
Imagine it like a Trailing Stop that is manually moved.

As for the newly entered sell stop, yes, you put a SL for it, at the high+8 of the setup bar;
But be aware that, if the reversal bar makes a higher high before it triggers the sell, the SL on it has to be moved to that new high+8.
The idea is starting to clear up. One more thing and I will have it down. If the bar you're using for your above activities (SL on Buy, new sell stop, and SL on new sell stop) is not followed by a reversal bar immediately what happens? and if not followed within two bars with one, also what happens?

Thanks to both of you and Kristo for your pateince with us novices.
  • #1,556
  • Nov 25, 2008 5:22am Nov 25, 2008 5:22am
Quoting petersurrey
OK we appear to be short now - Alpari Uk was showing a new set up bar after the 2 failed reversals and the latest reversal bar has just broken the low by a few pips..
on Alpari US the sell is still not triggered (the reversal bar's low is 1.5054 three pips short of the trigger)
  • #1,557
  • Edited 5:53am Nov 25, 2008 5:23am | Edited 5:53am
thanks for quikly reply
Quoting tonirai



Don't know what you mean by "we put trigger on bar B"...
We don't do anything until it's closed.
Like you said, it triggered the sell and then went up and triggered the stoploss on that order;
I mean our order sellstop change to sell and been closed with stoploss

Quoting tonirai

This is where you're wrong:
The rules say you don't reverse a failed reversal bar;
in this case I can't get how we can have situation with revers on non failed reversal bar ?
when sellstop change to sell , price break our actual higher high
when price hit our stoploss in the same time price break actual lower low , any words all what happened make this reversal bar failed
how can be possible revers if price don't break our actual high and low on one bar?
thanks so much
pit
  • #1,558
  • Nov 25, 2008 5:24am Nov 25, 2008 5:24am
Quoting petersurrey
OK we appear to be short now - Alpari Uk was showing a new set up bar after the 2 failed reversals and the latest reversal bar has just broken the low by a few pips..
Ooops - forgot the 5 pips rule so we're still flat
  • #1,559
  • Nov 25, 2008 5:25am Nov 25, 2008 5:25am
Quoting CitiTrade
on Alpari US the sell is still not triggered (the reversal bar's low is 1.5054 three pips short of the trigger)
..you're right still to trigger..
  • #1,560
  • Nov 25, 2008 5:32am Nov 25, 2008 5:32am
Quoting petersurrey
..you're right still to trigger..
Learning the 4h5ema system is making me feel like I am learning to ride the bicycle allover again, with no training wheels this time... watch out for that tree.....damn! LOL
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