4H 5EMA System

In word doc I see second rule for weekend exit , wich looking like :
Where the previous week’s closing bar was a setup for a trade in the other direction, if a gap crosses the entry level from that setup bar, open the trade in the new direction.
and based on that rule I open buy today , but may be I'm wrong understood this rule
Good luck
Peter

Hi guys,
I see some confusion about the rules...

Without quoting who's right or wrong, or the particular values, this week started with a long;
The last bar from Friday is a setup bar and counts to what we should do when the market re-opens on Sundays;

In these cases, if the market re-opens above the bar, we enter long;
If it re-opens below, we re-enter the previous short we were in.

We are currently short, since this week's third bar.

hello everybody,
my first post in this thread...

what i can say...very good thread starts by sterling. keep it up guys.
i don't want to intervene the system which is very good for everybody...while it is not broken, why must we fix it...isn't it? however i do read at the 1st page on sterling statement that welcomes new idea on how we take trades based on his idea

for myself... i personaly enter the trades based on candlestick formation and 1 or 2 indi that shows divergence e.g MACD or stochastic....on daily basis or 4hr candle or sometimes when i have free time..to enter at lower tf...

for this system, what i can suggest to all of the user of this system to maximise the profit is as follows:

1. look for the candle that forms.....whether it is harami/shooting star/hammer/engulfing bear/bull... (only this 4 type of candle is enough)..easy to remember yahhhh

2. look at your 5EMA low and high (try follow sterling rules as many as possible)...

3. here come my tweaks on this system....(i didn't use sterling system in the beginning..but i put the 5 EMA to get a feel and better understanding on his system)....and what i found is..amazing job sterling!

-i m picky on my trades.....when i saw a candle formation....i try to look at 5EMA(H/L).....if the candles that shows reversal opportunity close beyond the border of 5EMA (H/L).....i found that it is almost true it is a valid reversal moment.....enter without any hesitant....i didnt enter the trades if the candle touch both H/L of EMA.....also, i put notes on SnR of the area...

the 5 EMA system introduce by sterling has provide me with ' patient syndrom'...." wait...it's not coming yet for reversal......"

maybe i'm not really good in explaining this..but..trust me...sterling system works great with candlestick formation... you can put better MM with candlesticks formation. (low SL, better TP because you follow the EMA to the top/bottom until it comes to reversal.....) - for myself....risk reward of 1:3 is very good..but with sterling system, can provide you more if you re patient enough......wait until the valid signals come to you.....

it can be used in GU, GY, EY, EU.....and most amazingly....i personally get better trades with GOLD with 'patient syndrom of EMA'

i have to say BIG THANK YOU to sterling for helping me re-shaping my trading styles (become more patient with his EMA style)
again thanks a lot.....

p/s - i m very in love when the shooting star body n wick is outside of the 5EMA high n low.....it moves faster to green side hehe

Hi guys. I'm sorry for the mess. I've been away all day and I just popped in. At a quick glance I see I was wrong (again ) and the day should have started with a buy. Then a new sell setup took place and we got into what looks a magnificent short so far. I have to rush away again though and will check later about the prices. I'm glad to see there's some life again in this thread. Thanks to everybody contributing.

Sure, I was told off a few weeks ago for giving a sermon but I make no apologies for doing it again!
These tweaks are only for the daily timeframe & don't use them until you're satisfied with your own backtesting that they work. The 4 hr rules work perfectly well on this timeframe but Howard and I have identified that these tweaks can, on occasion, increase the pippage.
Sermon over!

All rules as per Sterling's 4 hr rules except:
1) Stop orders and stop losses placed 10 pips above or 5 pips below setup bar
2) Don't close for weekends
3) If the system puts us flat by virtue of a) two failed reversal bars or b) an outside reversal bar, we place a buy order 10 pips above and a sell order 5 pips below the last closed bar with stops at the other end and with the provision for one stop and reverse trade only; this is 'Tweak #1'
4) If we get a setup bar and two failed reversal bars we exit our position on the close of the second bar thus becoming flat, this is 'Tweak #2' (and replaces the 50% rule). Now we apply Tweak #1 to get back in the trade.
5) Following a buy or a sell, if the following bars' price action all occurs between the 5 EMA's, the SL is moved upwards or downwards as appropriate
until a proper setup bar forms or there is a stop reversal.
If you look at the word doc on post 2472, look at 2.1 Example - Identification of Bars. Look along the bottom at examples 1, 4, 3, 1, 3, 1. The second '3' shows 2 red candles, the first is a reversal that would open the sell order placed on the previous green setup; the second red candle is not a setup so according to 4 hr rules, SL would not be moved. 'Tweak 3' is to put the SL and buy stop order 10 pips above the close of this bar.

Hope this is clear - thanks to Howard for wording it so well!

Just to update my view: we've been short since 1.4815 and the actual SL is at 1.4521. So we've locked 294 pips! Hats off to Sterling once again!
A buy order is pending at the same level, with a SL at 1.4355.
And with the latest news from El Dee, I'm sure many people will be drooling.
I also have a feeling that denverdude's path will not be much different: a pity we have to wait till the end of the month...
At this pace who the h*ll will ever need to scalp or be stuck to the PC for hours anymore?
This time I'm attaching my whole chart, as requested by Alex.

Just found this thread few weeks ago and have not read fully but I could see I am already trading good. (Cannot believe it myself). I made > 1100 pips (small size 1 cent per pip). in 3 trades. (cable, eu,gj).

Hats off to Sterling,Eldee/Howard and others for their time and explanation.

Just dropped in to say thanks to all!..

IKent

Hi guys,

Another newbie here. I have been trading the 5ema system on the 1 hour and 15 min tf's but it's killin me. This looks like an awesome system. I really appreciate you guys explaining your trades. I will try to do the same and hopefully find a system that doesn't leave me blind from screen glare and frustrated with the whipsaws. GLTA!

Stop Loss and buy order moved to 1.4353. SL for buy order set to 1.4127. One more step to heaven

Cool Alright. I think you have 700 pips running by now on the sell .

Well, I wish I were trading for real...
Unfortunately I see I still make some stupid mistakes. I need more practice. Also I need to find a reliable way to place trades when I'm away from home.
This system is still proving itself to be sound though. The ones who have been trading it for real should start arranging for a dinner to a luxury restaurant for Sterling and Hiranya.

P.S. - As I'm writing the pips are over 800!

El Dee, are your buy entry levels already inclusive of spread, or should they become 13 pips above setup bar?

Hi

10 pips above the high is inclusive of the spread

I will start today to test the daily method as i can be online at end of each day. Hope i get it right

Thanks, howard. As I see it, the latest short was opened at 1.4643. Correct?

Hi El Dee.
Thanks for sharing Your results.
I want be sure I good understood what You say here.
Like on pic when bar A close You close sell order and open buystop and sellstop , based on high and low from bar A. Is that correct?
Thanks
Peter

SL and pending buy adjusted to 1.4282, while the SL for the buy order goes to 1.3931.

That is the exact figure on my chart

You've got it. On 4 hr rules you would apply 50% rule here and wait for a new setup bar. In this example you would take a small hit as your new buy trade reverses into a sell.

I'm just re-writing the 4 hr rules (Post 2472) for Daily, including tweaks, and will post them. Give me a day or so.
Mrs Dee is now trading the daily live and was very happy with her account balance this morning!