Swing trading system

hello,

The reason I post this new thread is to share some trading tips with fellow traders and hopefully in the process will learn something usefull as well. I been trading live with this Swing Trading method ( my own version ) with some -promising results, if you dont believe me try it for yourself

Indicators I use :
4hourly time frame ( any pairs )
Heikin Ashi
MACD

stop loss is bellow the last low swing or the last high swing

take profit 60 pips at least(i prefer not to be greedy ) - can use trail stops its up to you.

one thing i notice about forex trading is whatever goes up must come down eventually.. so the principle is sell -high buy -low

Trading set up goes like this :-

buy
-when Heikin Ashi color changed from red to white - heikin ashi is good indicator when it comes to trend changing.execute your order after the 1stwhite bar is complete

-when MACD cross the zero line upwards or when the signal linetouch the bars going upwards

sell- opposite rules applies

i am posting a screenshot of buying and selling set up here

second try...

third try..

Moving Average Convergence and Divergence (MACD)


Definition:
Moving Average Convergence and Divergence (MACD) is the difference between a fast exponential moving average (fast EMA) and a slow exponential moving average (slow EMA). The name was derived from the fact that the fast EMA is continually converging towards and diverging away from the slow EMA.

In IQ Chart, we show the difference between the two moving averages (the MACD) plotted as green or blue vertical lines, and a red signal line plotted over the MACD which is a moving average of the MACD line.

Interpretation:
The MACD can be a very helpful technical indicator, and is subject to several conventional interpretations which can all be useful depending on your trading and investment philosophies.

One interpretation is that a positive MACD value is a bullish signal, and a negative MACD value is a bearish signal.
The crossover interpretation posits that the signal line can be used alongside the MACD to determine the appropriate entry and exit point. (The signal line is a moving average of the MACD line). When the MACD falls below its signal line, it can be considered a sell signal. Similarly, a buy signal can be interpreted when the MACD rises above its signal line.
A third popular method of interpretation is that when the MACD is making new highs or lows, and the price is not also making new highs and lows, it signals a possible trend reversal. This type of interpretation is often verified with an overbought/oversold oscillator.

Most profits (and losses) are generated when markets are trending--so predicting trends correctly can be extremely helpful. Many traders use candlestick charts to help them locate such trends amid often erratic market volatility. The Heikin-Ashi technique--"average bar" in Japanese--is one of many techniques used in conjunction with candlestick charts to improve the isolation of trends and to predict future prices.

http://ads.forbes.com/RealMedia/ads/...30?_RM_EMPTY_& Calculating the Modified Bars
Normal candlestick charts are composed of a series of open-high-low-close (OHLC) bars set apart by a time series. The Heikin-Ashi technique uses a modified formula:

 

1. <LI itxtvisited="1">xClose = (Open+High+Low+Close)/4
   o Average price of the current bar
   
   <LI itxtvisited="1">xOpen = [xOpen(Previous Bar) + Close(Previous Bar)]/2
   o Midpoint of the previous bar
   
   <LI itxtvisited="1">xHigh = Max(High, xOpen, xClose)
   o Highest value in the set
   
2. xLow = Min(Low, xOpen, xClose)
   o Lowest value in the set

Constructing the Chart
The Heikin-Ashi chart is constructed like a regular candlestick chart (except with the new values above). The time series is defined by the user--depending on the type of chart desired (daily, hourly, etc.). The down days are represented by filled bars, while the up days are represented by empty bars. Finally, all of the same candlestick patterns apply.

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Here is a normal candlestick chart:

http://i.investopedia.com/inv/articl...s/092204_1.gif
Chart by Educofin.com

Here is a Heikin-Ashi chart:

http://i.investopedia.com/inv/articl...s/092204_2.gif
Chart by Educofin.com

Putting It to Use
These charts can be applied to many markets; however, they are most often used in the equity and commodity markets. Traders often program these new instructions into existing trading programs, such as MetaTrader, or use many online tools (listed in the reference section below). Finally, it can be applied via Microsoft Excel or other similar spreadsheet programs.

There are five primary signals that identify trends and buying opportunities:

 

1. <LI itxtvisited="1">Hollow candles with no lower "shadows" indicate a strong uptrend: let your profits ride!
   <LI itxtvisited="1">Hollow candles signify an uptrend: you might want to add to your long position, and exit short positions.
   <LI itxtvisited="1">One candle with a small body surrounded by upper and lower shadows indicates a trend change: risk-loving traders might buy or sell here, while others will wait for confirmation before going short or long.
   <LI itxtvisited="1">Filled candles indicate a downtrend: you might want to add to your short position, and exit long positions.
2. Filled candles with no higher shadows identify a strong downtrend: stay short until there's a change in trend.

These signals show that locating trends or opportunities becomes a lot easier with this system. The trends are not interrupted by false signals as often, and are thus more easily spotted. Furthermore, opportunities to buy during times of consolidation are also apparent.

Conclusion
The Heikin-Ashi technique is extremely useful for making candlestick charts more readable--trends can be located more easily, and buying opportunities can be spotted at a glance. The charts are constructed in the same manner as a normal candlestick chart, with the exception of the modified bar formulas. When properly used, this technique can help you spot trends and trend changes from which you can profit!

Thanks for sharing
I'm gonna back test your systems first.

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Gartley patterns

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What are your MACD settings?

The standard 12,26,9 according to the screenshot in post 4

thanks for visiting my thread... over 1000 views in 24 hours not too bad..

well i have another tip to share for the newbies around here my rules for trading for retracement is that set your take profit at the 50% of the fibro.. that should do the trick...

hi fxaddict, on your entry rule....do you mean when candles turn from say red to white, we only buy when macd crosses above zero or as long as macd line is above signal line? vice versa for short? tks.

yes thats what i mean .. but make sure you enter on the 2nd bar and not the first one...( to be on the safe side )

tks fxaddict.
do you mean if prev bar has changed from red to white and macd line is above signal line as at that bar close, we dont execute trade? we wait for a 2nd white bar to formed & enter at the close? tks.

yep u got it right...that way you have less chance to loose the trade.

tks fxaddict.
one last question....you mentioned you only use this for 4 hr time frame. in your opinion, does it work well in other time frames like 15, 30 or 60 min?
tks....

do you mean we buy when Heiken Ashi changes from red to white?

i have tested and tried with 60 min T/F it works well but anything less than that i really doubt it..

FOr those who prefer 1 hour time frame , its very useful to have an alert when the candle turns color, i am posting it here for everyone to use.

In your pic on post #4, why are you selling when MAC is above zero? Isn't the filter above/below zero line? The first two trades look opposite your MACD filter.

i am just following the basic rules in buying or selling in MACD..