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4H 5EMA System

  • #2,461
  • Edited 1:45am Dec 16, 2008 1:44am | Edited 1:45am
Sterling mentioned something about using a 10 EMA a while back. I remember some positive words about this were written but I don't remember if a definitive was given. I have not tested, was waiting for the EA to do testing to ease the process. Did anyone play with changing the EMA's to see if that changed results?
  • #2,462
  • Dec 16, 2008 3:37am Dec 16, 2008 3:37am
Quoting petersurrey
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?..
Yes I adjust the stop according to new bars, basically every bar is treated as a new setup bar, hence stop moves with it
Regards
  • #2,463
  • Dec 16, 2008 3:44am Dec 16, 2008 3:44am
Quoting alllivemind
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...
After a while I came to the conclusion that 4 hr was performing better than 8 hr, so I abondoned it.

For 8hr I followed the rules of 4hr exactly as set out by Sterling.

For daily rules are again the same except that every bar is a setup bar and there is target profit equal to the length of the setup bar and there is no weekend break.
Regards
  • #2,464
  • Dec 16, 2008 3:54am Dec 16, 2008 3:54am
Please read the replies in red

Quoting denverdude
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.[list=1][*]So far, what is the biggest SL you have encountered? Since inception the 27th November no stop has been hit, 5 trades so far[*]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)? [color=red]For longs I use 10 pips...
Regards
  • #2,465
  • Dec 16, 2008 4:00am Dec 16, 2008 4:00am
Quoting denverdude
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...

Some of the answers were not posted in my previous post here they are again:

1- So for 5 trades, no stop hit
2- For longs 10 pips above for shorts 5 pips below
3- Yes
4- You should use a chart with no Sunday bar for this method and any other method, Sunday bar distorts everything even moving averages
Regards
  • #2,466
  • Dec 16, 2008 11:59am Dec 16, 2008 11:59am
Update following my latest:

A setup bar came, and we moved the orders according to it;
In the next bar the long was stopped @ 1.5271, at which point we entered the short, with SL @ 1.5334 -> that long made +198 pips;

At the close of the reversal bar, we inserted the buy stop @ 1.5334, with SL @ 1.5199;

Next bar went up, triggered the short's SL and entered our current long -> -63 pips;
When the bar closed, it was a setup bar to a short, so we moved the long's SL to 1.5222, and the pending sell stop @ 1.5222, with SL @ 1.5388.
  • #2,467
  • Dec 16, 2008 1:40pm Dec 16, 2008 1:40pm
The last closed bar didn't become a reversal bar, nor a new setup bar (everything stays the same);
The current bar, if it doesn't reverse towards the SL, will become a new setup bar when closed (as it has already made a higher high).
  • #2,468
  • Edited 5:42pm Dec 16, 2008 4:51pm | Edited 5:42pm
Hi Howard and All!
I've not been following the thread for 4 weeks or so but have been trading the system live on daily since 24/11/08 and see that you've updated the rules slightly.
My daily results - following the original 4 hr rules are:
24/11/08 - Buy - Profit - 238 pips
28/11/08 - Sell - Profit - 486 pips
7/12/08 - Buy - Profit - 112 pips
Closed for weekend (forgot to close 1st w/end, new broker times prevented close 2nd w/end!)
15/12/08 - Buy - Still open at 244 pips locked in profit (assuming today's low isn't breached in the next 20 mins!)

No stop losses, never flat and negligable draw down.

Profit - £1000's!

Total work time to achieve 1080 pips = 3hrs 10min
How do your results with updated rules compare?



Sterling - If you're ever in Liverpool, England, I owe you a drink! (and did you ever look at those clarified rules that I sent you??)
You don't have to be right, just don't be too wrong
  • #2,469
  • Dec 16, 2008 5:07pm Dec 16, 2008 5:07pm
Quoting El Dee
Hi Howard and All!
I've not been following the thread for 4 weeks or so but have been trading the system live on daily since 24/11/08 and see that you've updated the rules slightly.
My daily results - following the original 4 hr rules are:
24/11/08 - Buy - Profit - 238 pips
28/11/08 - Sell - Profit - 486 pips
7/12/08 - Buy - Profit - 112 pips
Closed for weekend (forgot to close 1st w/end, new broker times prevented close 2nd w/end!)
15/12/08 - Buy - Still open at 244 pips locked in profit

No stop losses and negligable draw down.

Total work time...
I dont think I ever got them...could you send them again I would be more than happy to give them a look!

-Sterling
Founder of Day Trading Forex Live
  • #2,470
  • Dec 16, 2008 5:32pm Dec 16, 2008 5:32pm
Sterling - I've re-sent to your gmail address
You don't have to be right, just don't be too wrong
  • #2,471
  • Dec 16, 2008 5:40pm Dec 16, 2008 5:40pm
Quoting El Dee
Sterling - I've re-sent to your gmail address
Wow those look great. If you want to post them and then I will in the rules section make a link to the post. If there is a better way to provide a link to those rules or reference the post they are in let me know and well do that. Great job.

-Sterling
Founder of Day Trading Forex Live
  • #2,472
  • Edited Dec 17, 2008 8:25am Dec 16, 2008 6:00pm | Edited Dec 17, 2008 8:25am
Here are Sterling's rules, written differently to help clear up some of the common misunderstandings.

If you think that anything written in these rules is different to the original rules posted by Sterling - Sterling's rules apply!

If you think that these rules differ, please let me know and I will change them if necessary.

Please print the rules and read through them at least 3 times before asking questions!

Have fun, El Dee

If these rules help then a personal request - everyone who makes good money out of this - and you will if you follow the rules - go to your country's UNICEF website and give them 1% of what you've made - what goes around comes around.
Attached File(s)
File Type: doc 4 Hr 5 EMA System.doc   595 KB | 2,685 downloads
You don't have to be right, just don't be too wrong
  • #2,473
  • Dec 16, 2008 8:46pm Dec 16, 2008 8:46pm
Quoting El Dee
Hi Howard and All!
I've not been following the thread for 4 weeks or so but have been trading the system live on daily since 24/11/08 ....
El Dee,
Thanks for the document you've posted consolidating the rules of the 4H system .

One question:
Did you meant to say that you've been using the 4H system rules but trading using a daily chart when you said
"have been trading the system live on daily since 24/11/08"
  • #2,474
  • Dec 16, 2008 10:18pm Dec 16, 2008 10:18pm
El Dee, nice description
Worth of being in the first page.


Update:
The long green bar became our setup bar when formed, so we placed ths SL @ 1.5276, and a sell stop at the same price, which SL is @ 1.5655;
Last bar failed to become either a new setup bar or reversal bar, so everything stayed the same;
Present bar is in the same situation (for now).
  • #2,475
  • Dec 17, 2008 2:34am Dec 17, 2008 2:34am
Quoting denverdude
El Dee,
Thanks for the document you've posted consolidating the rules of the 4H system .

One question:
Did you meant to say that you've been using the 4H system rules but trading using a daily chart when you said
"have been trading the system live on daily since 24/11/08"
That's right - 4hr rules exactly but applied to the daily timeframe and updated once a day at 00:00 (midnight) GMT when my charts update.

But I'm interested to see if the modifications posted by Howard give improved performance.
You don't have to be right, just don't be too wrong
  • #2,476
  • Dec 17, 2008 5:02am Dec 17, 2008 5:02am
Quoting El Dee
That's right - 4hr rules exactly but applied to the daily timeframe and updated once a day at 00:00 (midnight) GMT when my charts update.

But I'm interested to see if the modifications posted by Howard give improved performance.
The rules I am following:

Towards the end of the daily bar I place two pending orders:

1-Buy order 10 pips above the high of the bar, stop loss 5 pips below the low of the bar, target the same amount as the stop loss

2-Sell order 5 pips below the low of the bar, stop loss 10 pips above the high, target the same amount as the stop loss.

When one of the above orders is triggered I do not cancel the other one but keep it as the reverse order in case the first one is stopped out.

When target is hit I cancel the other order.

Reverse position takes place only once as above mentioned.

If I am in a trade at the end of each bar I move the stop to the low or high of the new bar as appropriate (5 pips below, 10 pips above).

By doing the above I am in effect treating each daily bar as a setup bar.

When target is hit I repeat the process again.

When I say towards the end of the daily bar I mean it does not have to be the exact close as long as the high and low of the bar have been established, I normally place the orders between 9 and 10 pm GMT.

Trades taken since start of the test are as follows:

1-28 Nov short +220
2-02 Dec short +270
3-08 Dec long +263
4-11 Dec long +158
5-12 Dec long +324

6-17 Dec long open
Regards
  • #2,477
  • Dec 17, 2008 7:19am Dec 17, 2008 7:19am
Quoting howard
The rules I am following:

Towards the end of the daily bar I place two pending orders:

1-Buy order 10 pips above the high of the bar, stop loss 5 pips below the low of the bar, target the same amount as the stop loss

2-Sell order 5 pips below the low of the bar, stop loss 10 pips above the high, target the same amount as the stop loss.

When one of the above orders is triggered I do not cancel the other one but keep it as the reverse order in case the first one is stopped out.

When target is hit I cancel the other order.

Reverse position...
Hey I like the idea man...I liek the results even better As far as the 4H system goes the last 2 trade will probably net somewhere around 500 pips so thats good for the pip count. Well have to see how this short works out maybe more maybe less pips. Ill probably do a chart to bring us current tonight sometime and also a pip count. Talk to you guys later and keep the ideas flowing

-Sterling
Founder of Day Trading Forex Live
  • #2,478
  • Dec 17, 2008 7:21am Dec 17, 2008 7:21am
Quoting El Dee
That's right - 4hr rules exactly but applied to the daily timeframe and updated once a day at 00:00 (midnight) GMT when my charts update.

But I'm interested to see if the modifications posted by Howard give improved performance.
Yeah I believe me and Eric tested howards method...we didnt use EMAs at all as there is no need to but I think I remember testing it on the 4H not the daily. I think he is on the right track with the daily tho. Also I will at the top of the rules write a post number so people can find your rules. I would like to thank you for that, I know it took a lot of work and you really dont get anything in return so I really appreciate it!!!! The same goes to everyone else in this thread that helps out and answers questions, its much appreciated.

-Sterling
Founder of Day Trading Forex Live
  • #2,479
  • Dec 17, 2008 8:03am Dec 17, 2008 8:03am
Quoting howard
The rules I am following:

Towards the end of the daily bar I place two pending orders:

1-Buy order 10 pips above the high of the bar, stop loss 5 pips below the low of the bar, target the same amount as the stop loss



6-17 Dec long open
Howard, that looks really good - I'll have to read through your rules a few times to ensure they are properly planted in my head and then compare results to those I've been achieving - this system and timeframe has to be the most simple and time effective method of trading that there is
You don't have to be right, just don't be too wrong
  • #2,480
  • Dec 17, 2008 8:04am Dec 17, 2008 8:04am
Quoting El Dee
Hi Howard, a few questions about your daily strategy:
1. Long - 10 pips, short 5; I assume the 10 pips includes spread - that is, you are not adding spread on also?
2. When you say TP equal to setup bar - are you coming out when TP is hit?
3. Every bar a setup - so you are not using 'failed setup bar' rules - if it has crossed 5 EMA then it is a setup bar?
I assume that bars that cross both EMA's or neither are ignored and you wait for the next one that does?
Cheers
Hi El Dee

1-That is correct it is inclusive of spread.

2-Correct, in fact TP is equal to setup bar plus 15 as we have 10 pips above and 5 pips below the bar

3-Again correct, in fact we do not need the bands but their presence is helpful visually, I do not ignore any bars, in fact smaller bars which form inside bars are the best, however as an option I may ignore very long bars where stops become extremely big
Regards
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