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4H 5EMA System

  • #2,441
  • Dec 15, 2008 2:13pm Dec 15, 2008 2:13pm
Let's bring us to current situation, since last week's close:

On friday, we had a stop & reverse, which was short @ 1.4849, SL @ 1.5042;
At the close of that reverse bar, we put the reverse order, a buy stop @ 1.5042, with SL @ 1.4810;
We closed that short and removed the pending order before the end of the market, around 1.4951 (ask price of the close) -> around -102 pips;
Sunday we re-entered the short and put the same reverse order, because the opening was inside our last SL range, @ 1.4966;
On the second bar of the week, the SL was hit, triggering our long, @ 1.5042 -> -76 pips;
When that bar has closed, it was a setup bar to a short, so we put the pending sell stop @ 1.5002, with SL @ 1.5073;
Next bar triggered the short -> -40 pips;
When that bar has closed, we put the pending buy @ 1.5073, with SL @ 1.4942;
The long green bar triggered the long @ 1.5073 -> -71 pips;
Next bar was a setup bar to a short, so we moved the SL on the long to 1.5226, and put a sell stop @ 1.5226, with SL @ 1.5387;
The current bar hasn't triggered it yet, nor made a higher high. We have locked +153 pips.
  • #2,442
  • Dec 15, 2008 2:18pm Dec 15, 2008 2:18pm
i hope thread doesn't die over a little loss here and there thanks toni for the update
  • #2,443
  • Dec 15, 2008 3:01pm Dec 15, 2008 3:01pm
Quoting howard
Some time ago a guy visited this thread and presented a daily version of this system with some slight modifications (see post 1742).

I started to forward test the idea and I thought it would be appropriate to mention the interim results here for anybody who is interested, of course a few weeks is not enough to prove anything in spite of the fact that it is during December and I will continue my tests.

GBPUSD

Start 27 November
To date 15 December

Number of closed trades: 4
Total of pips : +911

Open trade: Long from 1.5091 with stop and...
Thanks Howard I am very interested in this as I can only trade once per day - can you just clarify whether the stop is moved down each day with a new daily candle or, as it appears, stays at the original trade 'trigger' level. If it is the latter you presumably need to allow for some pretty big stop outs?..
  • #2,444
  • Dec 15, 2008 4:36pm Dec 15, 2008 4:36pm
Quoting howard
Some time ago a guy visited this thread and presented a daily version of this system with some slight modifications (see post 1742).

I started to forward test the idea and I thought it would be appropriate to mention the interim results here for anybody who is interested, of course a few weeks is not enough to prove anything in spite of the fact that it is during December and I will continue my tests.

GBPUSD

Start 27 November
To date 15 December

Number of closed trades: 4
Total of pips : +911

Open trade: Long from 1.5091 with stop and...
Thanks for doing that Howard,
You you repost the modifications to our rules for the daily as you understand them? Also, have you been trading the 8 hour still? I have with real money, and it's done way better than the four hour. But as I've posted before, I'm bad at record keeping, just know my account is higher. I use exactly the same rules, I use very small contract size with real money, and have been using the 8 hour since we started. Trust me, it has done much better.
I'm waiting for an EA that can test a few years, but this daily is a lazy trader's dream come true! 4 trades all month and check once per day? Yeah that's for me!
Michael
  • #2,445
  • Edited 9:05pm Dec 15, 2008 5:22pm | Edited 9:05pm
Update:
Failed (not proper) setup bar - everything stays the same.
  • #2,446
  • Dec 15, 2008 7:04pm Dec 15, 2008 7:04pm
Quoting jtmoore007
i hope thread doesn't die over a little loss here and there thanks toni for the update
Yeah I have no intention of letting this thread die. I know this system will come back and when it does for the month the people will return. The only real reason for me to post is when people ask questions and to post the charts. Ill still be here.

-Sterling
Founder of Day Trading Forex Live
  • #2,447
  • Dec 15, 2008 8:47pm Dec 15, 2008 8:47pm
Howard,
Thanks for posting the results of your forward test.

If its not asking too much from you, can you please start a new thread for the daily version?

Also, I have some questions about the daily version.

  1. So far, what is the biggest SL you have encountered?
  2. Is there any number of pips above/below the high/low you use before the trade is triggered from previous day's candle (like the 5 we use in 4H)?
  3. Do you let trades be open through weekends?
  4. How to handle Sun(some brokers) candles?

Also, if you can post a chart of the trades that you've taken so far, it would be great.

As much as I like the 4H system, I'd like to try out the daily as well. Instead of cluttering this thread, we can follow the daily in another thread.

If you need any help in this task, please let me know.

Thanks

  • #2,448
  • Dec 15, 2008 8:50pm Dec 15, 2008 8:50pm
Quoting alllivemind
Thanks for doing that Howard,
I use very small contract size with real money, and have been using the 8 hour since we started. Trust me, it has done much better.
Michael
Hi Michael,
How do you get 8H in MT? All I see is 1H and 4H with the "H".

Thanks
  • #2,449
  • Dec 15, 2008 9:15pm Dec 15, 2008 9:15pm
In my last post (#2445) I made a mistake - shouldn't move the stop, as it was not a new setup bar (didn't make a higher high).
I edited that.

So this last bar has closed and is again a failed reversal bar - it's the second consecutive failed reversal bar, so we start looking for a new one;

This long was triggered @ 1.5073, so it made a maximum profit of 1.5379 - 1.5073 = 306 pips, qualifying for the "50% rule", that states we cancel our sell stop and move the SL on the current live order to half of that:
306 / 2 = 153 -> 1.5073 + 153 pips = 1.5226.

So 1.5226 is the current SL, we have no pending sell, and we're waiting for a new setup bar.
  • #2,450
  • Dec 15, 2008 10:00pm Dec 15, 2008 10:00pm
Quoting denverdude
Hi Michael,
How do you get 8H in MT? All I see is 1H and 4H with the "H".

Thanks

I have called stersuhr and i have not got a answer from him, but i know that it is a download that you can get. So i hope that he well see this and put the download on the forum when he gets up to trade at 2am est. I know that Howard has been running this system and i hope that it is providing some good pips, there is no reason for him to start another thread i would love for him to post what the 8 hr system is doing on this thread.
  • #2,451
  • Dec 15, 2008 10:16pm Dec 15, 2008 10:16pm
tonirai who have you been?

I have not seen very much from this tread and i really would hate to see it die. this is a money making system and there is no reason for it to die. We all need to think of ways to make this system work when volatility gets slow like it is now. If that is trading the 8hr chart then that is what we have to do but we all need to think of what we can do for the slow months. I know as soon as there are some good trades there will be a ton of post but until then lets think of some ideas that will help...
  • #2,452
  • Dec 15, 2008 10:47pm Dec 15, 2008 10:47pm
Everything's fine here

It's like somebody said: low movement & some losses are keeping people away... and they will return once the profits reappear.

I think of ways to improve the system... different timeframes could be one, but I personally believe more in some sort of Trailing Stop;
Even knowing this system wins on account of the big moves, maybe locking more on the smaller moves could outcome that.

There was a post a long time ago (sorry, don't remember from who) about a variation that, once at 100 pips of profit, moved the SL to breakeven... I'd like to know more about this strategy and its results.
  • #2,453
  • Dec 15, 2008 10:47pm Dec 15, 2008 10:47pm
Hi Guys,

Backtesting on the daily bar gave very interesting results for Dec.

Rule is the same as 4H 5EMA, except that we carry the trade over the weekend.

Profit is calculated when you realized it ( so there could be trade from previous month and TP in the current month ).


Sell triggered@ 1.5307 on 11/28.
Buy triggered @ 1.4821 on 12/08 - profit +486 PIPS

Open trade still buy @1.4821 SL @ 1.4915 - locked +94 PIPS

Sell stop @ 1.4915 SL 1.5387 not triggered yet


Total locked profit for the month = + 580 PIPS


I've also backtest for the last few months, but need to recheck my calculations. Hopefully Toni or anybody could confirm my calculation for Dec.


Sterling, thanks again for the great system. By the way you must have backtest the Daily as well. Any reason why you're not using this, master ? SL too big ?


Anuar
  • #2,454
  • Dec 15, 2008 11:39pm Dec 15, 2008 11:39pm
Quoting tonirai
Everything's fine here

It's like somebody said: low movement & some losses are keeping people away... and they will return once the profits reappear.

I think of ways to improve the system... different timeframes could be one, but I personally believe more in some sort of Trailing Stop;
Even knowing this system wins on account of the big moves, maybe locking more on the smaller moves could outcome that.

There was a post a long time ago (sorry, don't remember from who) about a variation that, once at 100 pips of profit, moved the SL to breakeven......



It could be something as simple as take a percent of your lot size. Say you use 1 lot if you could get 50 pip and take 25% of your lot size then let the rest roll. It is all something that we need to back test and forward test but i would like to see what it would do.
  • #2,455
  • Dec 15, 2008 11:53pm Dec 15, 2008 11:53pm
Quoting anuar
Hi Guys,

Backtesting on the daily bar gave very interesting results for Dec.

Rule is the same as 4H 5EMA, except that we carry the trade over the weekend.

Profit is calculated when you realized it ( so there could be trade from previous month and TP in the current month ).


Sell triggered@ 1.5307 on 11/28.
Buy triggered @ 1.4821 on 12/08 - profit +486 PIPS

Open trade still buy @1.4821 SL @ 1.4915 - locked +94 PIPS

Sell stop @ 1.4915 SL 1.5387 not triggered yet


Total locked profit for the month = + 580 PIPS


I've also backtest...

Just looking at Dec it looks good. Good job i like it
  • #2,456
  • Dec 16, 2008 12:29am Dec 16, 2008 12:29am
Quoting denverdude
Hi Michael,
How do you get 8H in MT? All I see is 1H and 4H with the "H".

Thanks
I have been with GFT forex and use thier dealbook platform. Not Mt4 though. Someone posted a converter here early in the thread history though. Go to the paperclip up to the right of the page numbers and then go to oct 27th and look for Period converter. Shortly after it got posted he gave some directions on how to use it.
M
  • #2,457
  • Dec 16, 2008 12:31am Dec 16, 2008 12:31am
Quoting anuar
Hi Guys,

Backtesting on the daily bar gave very interesting results for Dec.

Rule is the same as 4H 5EMA, except that we carry the trade over the weekend.

Profit is calculated when you realized it ( so there could be trade from previous month and TP in the current month ).


Sell triggered@ 1.5307 on 11/28.
Buy triggered @ 1.4821 on 12/08 - profit +486 PIPS

Open trade still buy @1.4821 SL @ 1.4915...
I remember he had some different rules like "every bar is a setup bar."
  • #2,458
  • Dec 16, 2008 12:58am Dec 16, 2008 12:58am
I have been playing around with this method on the 8 hour TF for a couple of months now, including manual backtests from Jan '07. Bottom line - I don't think its as profitable over the long haul, mainly because the 8 hour TF includes the London and US sessions in the one bar. I believe this is where the 4 hour TF picks up many of its winners, whereas the 8 hour TF misses many, if not all of the smaller moves. I would have to dig out the paperwork, but Nov '08 was something like -850/900 pips. Many other months had big losses with the occasional big winning month. I fiddled with the EMA's and also tried 10hr, 12hr, 13hr and 16hr just for the exercise and came up with similar findings. I am still tweaking on the 8 hour as I trade from this chart quite a bit anyway (makes sleeping easier) and will post here if I come up with a suitable solution which survives a decent backtest.
If there is ever any doubt then there is no doubt.
  • #2,459
  • Dec 16, 2008 1:29am Dec 16, 2008 1:29am
Sterling and I have came up with this system and we all know that it makes money. I am only trying to get people involved in to the tread again and think of different things and to get more involved. we have never seen the market in the type of the slum that it is in right now, so if ALL of us can work together and come up with something that would make every one happy that would be good. If you look back to the last year Dec it was not a good month so i am just trying to up build every one that is it.
  • #2,460
  • Dec 16, 2008 1:34am Dec 16, 2008 1:34am
Quoting Hiranya
Sterling and I have came up with this system and we all know that it makes money. I am only trying to get people involved in to the tread again and think of different things and to get more involved. we have never seen the market in the type of the slum that it is in right now, so if ALL of us can work together and come up with something that would make every one happy that would be good. If you look back to the last year Dec it was not a good month so i am just trying to up build every one that is it.
If the worst thing is we take off till January, is that so bad? I've reduced my contract size quite a bit so I have enough capital when things get better. Also Fed day tomorrow, we all need to just chill. Like you say, the system is profitable. Plus Sterling is working on the scalping system. I'll be in this thread a long time.....
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