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4H 5EMA System

  • #3,001
  • Feb 5, 2009 3:49am Feb 5, 2009 3:49am
Quoting pitpiter
Hello.
Can You confirm currrent situation on daily chart ?
Today was stopped sell -371 and now buy at 1.4551 SL 1.4046
Am I correct?
Thanks
Peter
I think you will find a complete explanation of the situation in the post above by El Dee on daily on by toni on 4 hourly.

Pending sell order is placed 5 pips below the closed bar of the 4th.(daily)
Regards
  • #3,002
  • Edited 5:54am Feb 5, 2009 5:13am | Edited 5:54am
Quoting tonirai
I might add, for better understanding, that in the example of that chart, and strictly by the 4H rules, it would be:

1 - Buy setup bar; note that the previous two bars are also buy setup bars but bar ‘1’ is the first bar that is followed by a reversal bar that fills the buy stop order that has been placed 10 pips above bar 1.
OK;

[size=1][b]2 - Reversal bar – fills buy stop order placed above the setup bar and is then stopped...
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Hi Toni, just to clarify things. I might be wrong. According to my understanding, regarding to NOTE 2, you stated that Bar 2 hits the stop loss, due to the fact that it hits the stop loss within the same bar, so there won't be any reverse order set and we are flat from the market. After it closed, you stated that it will be a LONG SETUP BAR because it has breach the lower ema by 5 pips.

Now, this is what clashes with my understanding. I always thought that this BAR 2 will not/cannot be used as our setup bar because it has just stopped our trade and leaves us flat in the market. We have to wait for a NEW SETUP BAR. Means only bars after this BAR 2 can be used as our setup bar. Am I right?

Lol, it feels bad to challenge the master here, my chances are slim but I would just give it a go Hope it can help me in my trading

Would appreciate any feedback and advice

- Sean
Discipline is PRIMARY, Method is Secondary.....
  • #3,003
  • Feb 5, 2009 5:44am Feb 5, 2009 5:44am
Hi El Dee if you are in the room later... can you post your daily chart please? You use a chart which closes at 24GMT right? I would just like to compare the price difference between your chart and mine, since I am using GFT with 24GMT closing too.

Thanks!

- Sean
Discipline is PRIMARY, Method is Secondary.....
  • #3,004
  • Feb 5, 2009 8:30am Feb 5, 2009 8:30am
Quoting Dabestone
Hi Toni, just to clarify things. I might be wrong. According to my understanding, regarding to NOTE 2, you stated that Bar 2 hits the stop loss, due to the fact that it hits the stop loss within the same bar, so there won't be any reverse order set and we are flat from the market. After it closed, you stated that it will be a LONG SETUP BAR because it has breach the lower ema by 5 pips.

Now, this is what clashes with my understanding. I always thought that this BAR 2 will not/cannot be used......
It's normal to have doubts about this situation... I had some in the past, too.
To quote myself from some posts ago:
Quoting tonirai
If we hit SL on a current trade, with the consequent filling of the reverse order, we do not place another reverse order UNTIL we get a setup bar to the opposite direction of the actual open position, which can be as soon as the bar that stopped us out.

(The only case where we don't consider the bar that has just closed is when we get 2 consecutive failed reversal bars - we start looking for a new setup bar starting from the following bar).
I will try to find some situation in the past, where Sterling applies this rule, and make a repost of it.
  • #3,005
  • Feb 5, 2009 9:15am Feb 5, 2009 9:15am
OK, this is taken from pages #4 and #5;
Take a look at the chart being discussed at that time (moments before being stopped out and flat);
Read the questions and answers about it - bolds on Sterling's post are mine.
Note that I've added two words (blue), which Sterling forgot (but reading the sentence, we understand he meant that).


Quoting VitaminBeer
Alright this looks like I'm going to get stopped out, if I do I wait till the price hits the upper 5 EMA and goes through it by 5 pips and then wait for a setup bar to go short, yeh?


Quoting VitaminBeer
Yep, got stopped.



Quoting stersuhr
Yup, first offical trade in the rrom got stopped out for -105pips. Actually vitabeer if I get another signal to go long I will take it. I dont only look for sells if I get stopped on a buy. I take every signal, thats what my results for last month and before that are based on. This bar is are new setup bar and we will have to wait until (it closes) 2 to place a trade. Stick with it, you seem to have the system down, you will make good money if you take every signal.
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  • #3,006
  • Feb 5, 2009 9:21am Feb 5, 2009 9:21am
Hi Tony, which bars are Sterling and VitaB refering to? The last few bars at the charts attached? or the few bars that marked with arrows?

Thanks

- Sean
Discipline is PRIMARY, Method is Secondary.....
  • #3,007
  • Feb 5, 2009 9:28am Feb 5, 2009 9:28am
Quoting Dabestone
Hi Tony, which bars are Sterling and VitaB refering to? The last few bars at the charts attached? or the few bars that marked with arrows?

Thanks

- Sean
Quoting tonirai
Take a look at the chart being discussed at that time (moments before being stopped out and flat);
They were discussing the live trade they were in at the moment, so it's the two last bars.
You even have the lines of the trade positions at the moment (buy/SL).
  • #3,008
  • Edited 11:39am Feb 5, 2009 11:20am | Edited 11:39am
All this week while learning I have been trading two demo
accounts.... using an IBFX chart and the Alpari chart.

They close at different hours on the 4H TF so I have had
to check the candle closes at these different intervals to
monitor my trades. Alpari's candles close first (PST US -
12, 4, 8) followed by IBFX one hour later. PST US 1, 5, 9).
With this stagger, IBFX show an extra candle throughout
the week by showing a extra candle on Sunday before Alpari.

My point in this exercise, is to show how different the trades
play out.

My actual trade platform results have varied (and may always)
because of my inherent propensity to error (LOL) and continual
lack of understanding or unwillingness to adhere precisely to the
rules. I'm getting better.

Nevertheless, here's the theoretical results through 3+ days of
simultaneous trading using two different charts according to my
strict understanding of the 4H 5EMA system. It is based on the
varied candle formations on these two types of 4H charts given
the one hour time frame difference on the closes of each candle.


IBFX (~4H timeframe of when the trade opened / or closed)

sell-stop @ 1.4430 2/01 20:00 closed @ 1.4231 + 199 pips

buy-stop @ 1.4231 2/02 16:00 closed @ 1.4410 + 179 pips

sell-stop @ 1.4410 2/04 12:00 closed @ 1.4491 - 81 pips

buy-stop @ 1.4491 currently running @ 1.4680 + 169 pips

TOTAL + 486 pips

ALPARI (~4H timeframe of when the trade opened / or closed)

sell-stop @ 1.4420 2/02 00:00 closed @ 1.4252 + 168 pips

buy-stop @ 1.4252 2/02 16:00 closed @ 1.4369 + 117 pips

sell-stop @ 1.4369 2/04 00:00 closed @ 1.4491 - 122 pips

buy-stop @ 1.4491 2/04 16:00 closed @ 1.4425 - 66 pips

sell-stop @ 1.4425 2/04 20:00 closed @ 1.4585 - 160 pips

buy-stop @ 1.4585 (currently running) @ 1.4680 + 75 pips

TOTAL + 32 pips

This is bizzare. +486 pips vs +32 pips

Now obviously this could reverse itself in a similar trading period.
I'm not promoting one broker's charts over another, only pointing
out the 'power' of one hour when trading a 4H timeframe.

I may trade both charts as a way of 'hedging my bet'. LOL

Pull up a TF of one hour or less with each chart platform and
obviously they are nearly the same.

Corrections, rebukes, ridicules and reprimands always welcomed.

Dr. D.
  • #3,009
  • Feb 5, 2009 12:01pm Feb 5, 2009 12:01pm
Hi Fourxtrader,
It 's true, but your sl will be bigger because ibfx candles are normally larger than alparis-us candles. It seems to me that using alparis-us your sl are normally small during side way market and let you in an hour early when you catch the trend. I have demo with ibfx before, it was not pretty when you had big sl and market knocked you out a few times in the rolls.
  • #3,010
  • Feb 5, 2009 1:01pm Feb 5, 2009 1:01pm
Quoting patrick25
Hi Fourxtrader,
It 's true, but your sl will be bigger because ibfx candles are normally larger than alparis-us candles. It seems to me that using alparis-us your sl are normally small during side way market and let you in an hour early when you catch the trend. I have demo with ibfx before, it was not pretty when you had big sl and market knocked you out a few times in the rolls.


I'm sure you're right.

I'm also sure the masters of this thread are amused by my predilection
towards pain and an obsessive compulsive nature of numbers dissection.

I'm trying to not make a judgment here even if this weeks numbers
are glaring and transparently obvious.

I'm convinced this is merely a random event. If we could shift the start
and close of the alpari charts one hour to the other side of IBFX we would
find a different conclusion.

I've heard complaints about IBFX with their spreads during volatility
and this may be significant in selecting a broker. As far as the charts
are concerned the data seems to match closely if you just look at
hourly charts. Then again in the long term it may not matter. I just
haven't seen it yet.

I trade with MBTrading Futures and they consistently show a different
bid/ ask than IBFX by several pips. Variations will always occur.

I noticed Alpari closes later on Friday matching closer to my broker.
I like that.

This is all fun and games and I'm trying to make it boring.

Dr. D.
  • #3,011
  • Feb 5, 2009 1:48pm Feb 5, 2009 1:48pm
Fourxtrader,
I think Sterling has created a good system because it is based on support and resistance, with good money management and trade it by following the rules to the T. then I have fun trading. I have come to the conclusion that either I am stress out trading smaller time frame and with a lot of discretency or trade a larger time frame with money management where the loss is not hurt the account but the profits will increase the account slowly(not talking about penny trade) and stress free.
  • #3,012
  • Feb 5, 2009 3:25pm Feb 5, 2009 3:25pm
Quoting El Dee
Hi Shawn,
The bar that closed on the 3rd Feb did not have a reversal order on it as it had not made a higher high than the original bar (Jan 30th) which had the sell order under it and no reversal order was placed above the Jan 30th bar on the close of the Feb 2nd bar as the sell order was the result of a stop loss / reversal order. The bar that stopped us out (Feb 4th), is a new sell setup so a contingent sell order is placed 5 pips below it.
This is all as per rules.
The reason I don't want it to open until Monday is that Fridays can display volatility...
Hi El Dee.
I'm not sure I good understood what You say here.
On my daily chart from Alpari US I have long .
After bar 1 (friday 30.01) close I place sellstop .
On bar 2 buy was stopped and triggered sell.
After 2 close I place reverse buystop at high(1)+10 SL=low(2)-5 .
On bar 3 sell was stopped and triggered buy.
After 3 close I'm placed sellstop at low(3)-5 SL=high(3)+10 and change stoploss for buy at low(3)-5.
I did all correct with rules and tweaks or lose something?
Thanks
Peter
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  • #3,013
  • Feb 5, 2009 3:46pm Feb 5, 2009 3:46pm
Quoting fourxtrader
I'm sure you're right.

I'm also sure the masters of this thread are amused by my predilection
towards pain and an obsessive compulsive nature of numbers dissection.

I'm trying to not make a judgment here even if this weeks numbers
are glaring and transparently obvious.

I'm convinced this is merely a random event. If we could shift the start
and close [color=blue][i]of...

Good point and a good time to raise it for the benfit of others who have only recently joined the thread. I seem to recall this issue was raised late last year (November comes to mind although I haven't checked the thread). Several traders were using different brokers and experiencing losses whilst others using Alpari were experiencing profits. Anyway, direct comparisons were made at the time and I believe some backtesting was done. The conclusion reached was that comparative results would end up very much the same over time and the notion of trading this system with several brokers was raised in order to "smooth out" the profit curve.
If there is ever any doubt then there is no doubt.
  • #3,014
  • Feb 5, 2009 4:04pm Feb 5, 2009 4:04pm
Quote
Originally Posted by tonirai
If we hit SL on a current trade, with the consequent filling of the reverse order, we do not place another reverse order UNTIL we get a setup bar to the opposite direction of the actual open position, which can be as soon as the bar that stopped us out.

(The only case where we don't consider the bar that has just closed is when we get 2 consecutive failed reversal bars - we start looking for a new setup bar starting from the following bar).

Hi Toni, thanks for the reply.

As highlighted above, when a current candle hit stop loss and triggered a reverse trade and eventually closed as a setup bar for the opposite direction, THEN WE CAN SET REVERSAL STOP ORDER AT THE LOW/TOP OF THIS BAR WHEN IT CLOSES.

1) Note that in this case, we are stopped and triggered the reverse order, we are still in the market, so when it closes and ends up as a new setup bar, then we can set reversal stop order.

2) In contrast, if we are stopped flat out of the market (because the stop was triggered before the reversal bar close OR a reverse trade was stop before the bar was closed), the same bar itself cannot be used as a setup bar. We have to wait for at least the next bar for a NEW SETUP BAR.


I have checked back at page #4 and page #5

I repeat reading it few times, I think what sterling meant was that they were stop in a reversal stop order trade and is flat from the market. So the next bar(which is their current bar) is forming a setup bar. So, they were waiting for it to close at EST 2 and then put in their reversal stop buy order.

I'm pretty sure that I am right here. Not trying to start a debate here, just trying to clarify things. Any other veterans here would like to correct me ?

P/S: Toni I acknowledge your help, appreciate it. Hope that this rule can be cleared up afterall. Cheers

-Sean
Discipline is PRIMARY, Method is Secondary.....
  • #3,015
  • Feb 5, 2009 4:17pm Feb 5, 2009 4:17pm
Quoting Kristo
Good point and a good time to raise it for the benfit of others who have only recently joined the thread. I seem to recall this issue was raised late last year (November comes to mind although I haven't checked the thread). Several traders were using different brokers and experiencing losses whilst others using Alpari were experiencing profits. Anyway, direct comparisons were made at the time and I believe some backtesting was done. The conclusion reached was that comparative results would end up very much the same over time and the notion of trading...

Beyond the charts.... are most traders here using and satisfied
with Alpari as a broker?

I'm not sure I'd ever find confidence in IBFX as a broker. I've
e-listened in on numerous complaints against IBFX for there
seemingly deliberate delays in filling orders, poor customer
response in moments of crisis (hahaha) and wild egregious
swings towards stop-hunting over the past 5 years.

I've placed hundreds of scalping orders / trades with MBT and
I can hardly remember a time when their actions were more
outrageous than mine. ☼Ü☼ I especially liked their narrow spread
on GBPJPY when I solely traded that pair.

Just curious.

Thanks always for your responses,

Dr. D.
  • #3,016
  • Feb 5, 2009 4:34pm Feb 5, 2009 4:34pm
Quoting fourxtrader
Beyond the charts.... are most traders here using and satisfied
with Alpari as a broker?

I'm not sure I'd ever find confidence in IBFX as a broker. I've
e-listened in on numerous complaints against IBFX for there
seemingly deliberate delays in filling orders, poor customer
response in moments of crisis (hahaha) and wild egregious
[color=blue][i]swings towards stop-hunting over the...

I can't speak for others, but I have been live with Alpari (UK) for a couple of years and have not had any issues whatsoever. I also have a second live account with MBT and fully agree with your comment above - for my part no problems at all with either of them. Perhaps it is coincidental in relation to Alpari, because from the start it has been the "chart standard" on this thread and I believe many traders may have opened demo accounts with Alpari to ensure they were looking at the same real-time charts as Sterling when trying to learn this system.
If there is ever any doubt then there is no doubt.
  • #3,017
  • Feb 5, 2009 9:16pm Feb 5, 2009 9:16pm
Quoting Dabestone
(...)1) Note that in this case, we are stopped and triggered the reverse order, we are still in the market, so when it closes and ends up as a new setup bar, then we can set reversal stop order.

2) In contrast, if we are stopped flat out of the market (because the stop was triggered before the reversal bar close OR a reverse trade was stop before the bar was closed), the same bar itself cannot be used as a setup bar. We have to wait for at least the next bar for a NEW SETUP BAR.
(...)
Hi Sean,

I've mixed up the contexts, as you pointed out:
First I spoke about a reversal bar (but still in trade)... then I was speaking about a reversal bar stopped before close (being flat at its end)!

Not making sense, clearly
But then you got me thinking... and pretty confused, not sure of any of those

So I went back to look for posts of both situations, and you're right:
- A reversal bar (while still in a trade) can be a valid setup bar;
- A reversal bar stopped (leaving you flat) demands waiting for a new setup bar.

I guess I haven't seen that second one for a too long time, that I was now treating them the same way!
(I even found the post from 3 months ago, where this was clarified to me).

Well catched, and thanks for pointing that out
Toni.
  • #3,018
  • Feb 5, 2009 10:57pm Feb 5, 2009 10:57pm
So for those who have been trading the 4H 5EMA system,
how has the NFP event played out each month?

Most traders run the other way.

Dr. D.
  • #3,019
  • Feb 5, 2009 11:34pm Feb 5, 2009 11:34pm
Hi Toni,

Good 1 there, now everything has cleared up for me and I am happy....

So, how's the system been working for you this week? I have some good pips around 100++ pips for this week on my broker which has a GMT 24:00 close time.

Still few hours away before the week close... NFP coming up later and I am in a short now, wonder how will the market move..

Happy trading everyone

-Sean
Discipline is PRIMARY, Method is Secondary.....
  • #3,020
  • Feb 6, 2009 9:10am Feb 6, 2009 9:10am
Hi there folks. What, no star rating for this thread?? Am still reading my way through from the start of the thread and I know I will have some questions about the system but will wait until I have finished. But a few questions I would like to ask now are

1) What is the average drawdown for the 4H 5EMA and the daily system?
2) For those who have been trading the above systems for a period of time, what is the largest drawdown that you have experienced?
3) Has there been any discussion or agreement on the best time for the start of the 4H candle or the Daily candle, be it EST or GMT and what time of day should the 1st candle start.

Thanks and good luck.
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