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4H 5EMA System

  • #2,401
  • Dec 11, 2008 1:17am Dec 11, 2008 1:17am
Quoting stersuhr
You have to be careful with this attitude. Look at the market now. Just as soon as it got you down it broke out hard to the upside. Thats why I say you must take every trade. Also its not like the system is taking big losses with these direction changes, much smaller than usual. It only takes one trade to turn this system around for the month, especially since were close to BE. Every system has down time and this one is no exception. Things will be much better after the damn holidays and the market gets back to normal

-Sterling
Maybe I picked the wrong smiley face. I was not serious - showing profit this time in real account. (I did not capture the first big move because I was still paper trading.)

Larry
  • #2,402
  • Dec 11, 2008 2:22am Dec 11, 2008 2:22am
Trade #10 - We wnet long when the market opened. Entry price was 1.4726 and then we closed the position when we got a sell signal. Close price was 1.4800 for a total profit of+74 pips.

Trade #11 - When we exited the long we also went short so we were short from 1.4800, and exited at 1.4831 when we got a signal to go long for a -31 pips.

Trade #12 - We went long at 1.4831 and closed the long and went short at 1.4770 for a -61 pip loss.

Trade #13 - We exited the long and went short at 1.4770 and exited that short at 1.4837 for a -67 pip loss.

Trade #14 - We went long from 1.4837 and are currently up around +150 pips.

As of this moment in time we are down -173 pips for the month. This is really the first time in the three months of this system being posted that it is negative for the month. Anyway no worries, this system always manages to turn positive months. Only one negative month last year, which should be pretty reasuring. This could be that month I donno, I just take every trade and know I make pips over the long run.

-Sterling
Attached Image (click to enlarge)
Click to Enlarge Name: dec 11th.jpg Size: 348 KB
Founder of Day Trading Forex Live
  • #2,403
  • Dec 11, 2008 5:09am Dec 11, 2008 5:09am
stop loss now at 1.4893 sell stop at 1.4893 with stop loss of 1.5006
  • #2,404
  • Dec 11, 2008 5:18am Dec 11, 2008 5:18am
Quoting tonirai
What do you call setup bars?
I ask, because if it's in favor of your trade, it isn't a setup bar;
Setup bars are the ones that:
- breach the upper ema by 5 pips, when you're flat or short;
- breach the lower ema by 5 pips, when you're flat or long.

Tonirai,

surely it's the other way round?

If your in a short trade you aren't looking for a setup bar to breach the upper ema, but to breach the lower one.

Steve.
  • #2,405
  • Dec 11, 2008 6:23am Dec 11, 2008 6:23am
Quoting Arnold49
Tonirai,

surely it's the other way round?

If your in a short trade you aren't looking for a setup bar to breach the upper ema, but to breach the lower one.

Steve.
Well catched, thanks
(sometimes I write faster than I think... and believe me, I think fast )

It might have been because I wasn't understanding the point, which I did in the following answer.

I'll go and edit that post.
  • #2,406
  • Dec 11, 2008 6:30am Dec 11, 2008 6:30am
Quoting jtmoore007
stop loss now at 1.4893 sell stop at 1.4893 with stop loss of 1.5006
BUY closed and SHORT now.
Thanks
  • #2,407
  • Dec 11, 2008 6:36am Dec 11, 2008 6:36am
question:

2.) A proper reversal bar has a lower high for a short or a higher low for a long.

let's supose that we have a setup bar to go long. This means that the setup bar breached the lower 5 ema by 5 pips and high of the setup bar did not breached the high 5 ema. The next bar is trigerring the buy stop so the order get's activated. the second next bar however is a reversal one. Now we cancel our order. We are in case to go short with an order. For this to happen, the High of this reversal bar must be lower than High of the previous bar - the one that activated our buy stop ? or it's High must be lower than High of the setup bar?

I am working on an EA for this trading system and still have some uncertain decisions to clarify.

Sorry if I missed the demo and results presented in this thread but without some values on bars (high low open close) is hard to verify by only using printed charts and a rule . I have tried to spot this happening by using charts from alpari-us but it takes time localizing different setups and beside that clarifing this might help others too.

Teo
  • #2,408
  • Dec 11, 2008 8:05am Dec 11, 2008 8:05am
good to see some positive pips close!!! good luck everyone
  • #2,409
  • Dec 11, 2008 8:57am Dec 11, 2008 8:57am
Quoting teoforex
question:

[font=Arial]2.) A proper reversal bar has a lower high for a short or a higher low for a long.

let's supose that we have a setup bar to go long. This means that the setup bar breached the lower 5 ema by 5 pips and high of the setup bar did not breached the high 5 ema. The next bar is trigerring the buy stop so the order get's activated. the second next bar however is a reversal one. Now we cancel our order. We are in case to go short with...
If the buy stop got triggered, when that bar closes, you place a reverse order;
Than you said the next bar is a reversal? Don't you mean a reverse?
Because reversal bars come after setup bars... but reverse bars are the ones that trigger the SL without a having a setup before;
In that case, it would stop the long and enter the short at the same price.
  • #2,410
  • Dec 11, 2008 9:03am Dec 11, 2008 9:03am
pending reverse buystop at 1.5006 stoploss at 1.4852
  • #2,411
  • Dec 11, 2008 10:00am Dec 11, 2008 10:00am
Quoting tonirai
If the buy stop got triggered, when that bar closes, you place a reverse order;
that i understand


i still do not understand what the rule means ... what is "reversal bar" in this rule ? reversal bar is that what we understand when we say the trend will change (a reversal bar in this case might be the last one from a series of 3 bars with same trend but with the last one breaking one of the ema's and this one become the setup bar) or a reversal bar in standard trading language (for example: long trend -bullish- and the last one is bearish with higher high and close below opening and the previous bar close ) ?

2.) A proper reversal bar has a lower high for a short or a higher low for a long.


You have for example the next picture:

In standard trading the first red bar is reversal bar (makes a higher high and closes below opening and the previous bar close ) while in our trading system the second bar is setup bar ... and therefore we consider it reversal bar?



I think i might just well skip this part until I find what this rule means and where it is applicable.
Attached Image
  • #2,412
  • Dec 11, 2008 10:05am Dec 11, 2008 10:05am
1st red bar is set up bar. 2nd red bar is reversal and triggered short trade
  • #2,413
  • Dec 11, 2008 10:11am Dec 11, 2008 10:11am
can you post a trade where this rule gets applied? even from thread will be great.

i understand that the 5 ema high was hit ... and then your response is correct ... what about this case?
Attached Image
  • #2,414
  • Dec 11, 2008 10:16am Dec 11, 2008 10:16am
the bar after 1 is the setup bar to go short, since 1 did not pierce the ema-high by 5 pips. if the bar after the setup bar goes 5 pips below the low of the setup bar, it is recognised as the reversal bar to go short (where the sell stop order to go short will be taken). hopes this clears things up a bit more.
  • #2,415
  • Dec 11, 2008 10:22am Dec 11, 2008 10:22am
teoforex,

You can't see the names in the classical term of trading... they are names chosen for this system's rules.

It's too hard too explain it to you, at this stage of your learning (of this system);

My advice is for you to go to the first few pages (or to the posts referred by Sterling on the rules), and watch the charts and description of trades that Sterling made (several trades in a row, like weekly updates);
At the same time, have the rules printed beside you, so you can go through it and the terms used in it.

Believe me, for some it took 1 week to learn all (with full daily following and dedication to the thread), to others, 1 month... but you've got to at least go through the early weekly updates.
  • #2,416
  • Dec 11, 2008 10:57am Dec 11, 2008 10:57am
So suppose we went long and then we saw a proper reversal bar and therefore went short. If the reverse losses do we look for a short for our next trade or do we look for any type of trade?
  • #2,417
  • Dec 11, 2008 11:09am Dec 11, 2008 11:09am
Quoting nikim
So suppose we went long and then we saw a proper reversal bar and therefore went short. If the reverse losses do we look for a short for our next trade or do we look for any type of trade?
Just to be sure you understand it, let me first say that if you're long, you don't "look" for a reversal bar - you look for a setup bar;

If you mean when the trade is triggered and then stopped in the same bar, leaving us flat... you look for any type of setup after.
  • #2,418
  • Dec 11, 2008 11:15am Dec 11, 2008 11:15am
I am demoing this system since late Nov/early Dec.

Initially, I was all caught in the rules. What is setup bar? what is reversal bar?

When I tried to read the rules, even though they are simple, they appeared too complex to me.

Then, I just decided to observe trades from sidelines - as people post here trade details, it became clearer to me.

I'd advice you to start following the trade - don't worry about placing them if you don't understand the rules. Once a step is taken, say, a BUY stop is placed, or SL is moved up, then try to find out from the rules, why it was done. If needed, rewrite the rules in your own words in a journal with screenshots. I'm sure, this exercise, even if done for a week, would help you a lot. As I'm writing this,we have a SELL trade in action, while we have a BUY stop. Follow these two, and see what happens.

And hang in there, buddy. Take it from me, this is a pretty damn simple system. Initially, as we try to learn everything at once, it appears hard.

Just pop in here once in every 4H, when trade details get posted, and I'm sure you'll see "light bulb" glow.

Thanks.
  • #2,419
  • Dec 11, 2008 11:50am Dec 11, 2008 11:50am
reversal trade was taken. we are now long
  • #2,420
  • Dec 11, 2008 1:05pm Dec 11, 2008 1:05pm
stop now at 1.4880 with sellstop there also
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