MACD, DMI+ADX, Ichimoku Siding Systems

Traders/Investors,

I will attempt to describe/discuss my particular trading system in the hopes of helping other traders, noobs and experienced traders/investors alike. I use three different trading methods and invite all to pick one and profit.

MACD

DMI+ADX

Ichimoku

All three trading methods share one major fact.
Their ALL Trend Following Systems

These systems were developed to help traders/investors stay on the right side of the trend. Though, these systems are not perfect, if you follow 3 simple trading rules, you will profit.

1. Daily Chart
2. Trend
3. Pending Order

Tips

1. EMA(21) & The Cloud are moving support and resistance line. Trade off them. They're very important.
   
2. Hard stops are best for these 3 trading methods. Place a pending order ONLY. Pending is hit and your trade is live. Place stops at Break Even once a small profit of 20 pips or so, has been reached. Ajust your stops accordingly.
   
3. Before you think about placing Market order, see above first. Stops are the first, last, & only thing a trader should think about before placing an Market/Pending order. Market orders are dangerous, period. Only trade the above 3 methods using "Pending Stop" orders only. Applying this entry method will keep a traders head leveled, stoping he/she from making impulse trades.

Follow 3 simple rules and apply these tips to your trades ... green pips will be manditory.

More Tips

When you place everything together ... it becomes clear that all three systems show the same trend. If you don't prefer to trade the Daily chart ... at least, use it as a direction reference on lower time frames

More Tips & Tools

For any trader, noob or experieced, that can't find the trend, there are Tools, Signals, Filters and Backtests available that could give you buy/sell signals or trend up/down signals. Some are free ... some aren't.

This is a backtest signal from ProRealTime Charts available free. It uses DMI/ADX signals for longs and shorts entries on a Daily chart. Its pretty simple, red bar tells a trader to sell and don't close out position until red bar disapprears or green bar appears. Its not an EA and does not trade automatically. Its a indicator signal and intended to help traders read/interpret the indicator better.

Every trader needs an edge!

Are you an EOD trader since it seems you favor Daily TF? I am curious when you decide to place a trade hopefully not catching the top or bottom of a move.

Hey Phonehome,

I am an EOD trader that utilize the Ichimoku indicator. I don't focus on intraday all that much. The Daily chart is my favorite, by allowing me to "see the big picture" in addition to the Weely chart. I do hold trades overnight by placing pending orders in the direction of trend. My trading style attempts to ride out the momentum of a new trend after the S/R line has been broke. Using the Ichimoku Cloud as a S/R level.

When a trade is open and price action moved 50 pips or so in my favor, I move my Stops to break even. As the market continues to move in my favor I adjust my Stops all the while locking in more profits.

Entry Tips
Traders that do not leave trades open over night may use the previous candle as an entry point on the daily chart. Once the trend has been established using any one of the three systems above, by jotting down the previous candle's high/low, trader would setup an appropriate pending order.

Example:

1. Previous Candle High = 1.300
2. Previous Candle Low = 1.200
3. Trend is Bearish
   ---
4. Entry1.180

Allowing a 20 pips or so "cushin" would protect the trader's entry of false breakouts.

Exit Tips
I can't say this enough, alway plan on placing stops at "Break Even". When 20-50 or so pips are in your favor, place a hard Stop Order at break even, which is $0.00. If/when the trade comes back, you will not have lost/gained anything. Its better to have not gained at all ... than lose some. Remember to adjust your stops once 20-50 or so pips have been gained. Lock that profit in and adjust accordingly as more profits are gained.

Hello and thank you to share your method. I use a little bit similar one which may be profitable.

Indicators I use is ADX/DMI/MACD/EMA34/EMA10. But I use it on a 1hour chart, almost with eur/usd pair.

Nevertheless I have some different money management rules but it is very similar. If you think it could be interesting, I can give you the lethod I use and you could backtest it coz I don't code anything in MT4 nor TS.

Let me know....

Thank you for explaining how to use Ichimoku because I have a hard time to understand how it works until I found this. I learned this new one.

Hi Jhig,
I like also Ichimoku, however I have some issues/questions:
- if you move your stops to BE after only 20-50pips, you will be stopped out quite often. the entries in Daily Ichimoku are quite rare, if you are stopped out, how you re-entry? in your example chart, why to sold only in middle of September and not immediately after the Price broke below the cloud? The other Ichimoku conditions where also fullfilled, like Tenkan below Kijun, Chikou was below price....
- I notice that you recommend a sort of trailing stops of 20-50 pips (by adjustings SL every time 50 pips are gained). but on a daily frame this TS is not too tight?

Hi all,

Sorry about the late post! Let me start with, hmaoui ...
Your method is very similar ... if you don't mind, please post you method and money management, would be interested in backtesting it. If you do not want it public, just PM me. Would love to know you entry/exit rules.

Askjo ...
You welcome. Ichimoku can be very mis-leading as well as intimidating to new and expereiced traders alike. Sometimes, its worth tackling the difficult and confusing strategy ... rewards pay off in the end, only if its worth it to you. I use two strategies, and Ichimoku is on my longterm account. Its only used on Daily/Weekly chart only, though I know a trader or two that uses it on the Hourly charts, and doing well with it. Just remember, backtest it for a few months before going live and I would recommend not using it on anything lower than the Hourly chart.

Randy09 ...
Hey Randy, good questions ... I personally only use Ichimoku on the Daily/Weekly charts. My personal stops are placed 50-100-150 back. The stops I've recomended are for new traders that don't have the account balance to take a 100+ pip drawdown. My first rule of trading, " limit your losses"! If the market goes against you 50 pips, this is your time to, GET OUT. Market drawdown 50 pips is normal. 50 pips drawdown is a new trader's signal to, close out and accept the lose. Afterwich, the trader should let the market do it thing, and place an pending order at where the position got stoped out at (Jacko's Anti Hedge System). So, yes, for an experienced trader, 20-50 pips stop may be to tight. Randy, if the system works for you, please adjust accordingly for your style of trading.

The great thing about the Ichimoku strategy is, you'll get many signals that will tell you many things about what the market is up to. Using Ichimoku, its always better to wait and let the entire system show you what direction the market is heading. It better for the trader to determine if a trade should be executed based on the Ichimoku's readings than using the indicator's cross signals as entry signals. Randy, remeber, Ichimoku give three indicators, so its best to use those three indicators accordingly. Though, experienced using Ichimomu, will understand and know the signs and what to look for when reading Ichimoku. Such as, trading only in the direction as the Moving Averages while predicting P/A bouce or break S/R lines.

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Hoped I helped everyone. Please keep the questions coming if you have any.
Jhig

Jhig,please can you post here the MT4 indicators & template files that you are using for those 3 trading systems you just shared?Thanks!

Vladv,
I don't trade using MetaTrader, I use DealBook360 or DealBookWeb by GFT. It been a while since I've used MT, but I can download a demo copy from Alpari and post the template here.
Unless there is a FF user willing to post MT4 templates of MACD(default setting), ADX+DMI(14), EMA(14), & ichimoku(default settings).
If not, I'll get on it tonight (US NY Est Time)

Vladv, Happy Trading

Hello Jhig,

There is not anything secret but I think it would be better to make another file to avoid from confusion. I will post a pm so you can have a look.

Can you post those MT4 indicators & templates anytime soon?Thanks!

It seems a good one

Hi, Jhig

Thank you for the explanation about Ichimoku.

What is the reason you use ichimoku with 7,21,42 period, and does not use the standard ichimoku of 9,26,52?

Thanks.

*Sorry about my bad english.