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Yet another 50 SMA trading strategy

  • #121
  • May 15, 2009 3:19pm May 15, 2009 3:19pm
I have to say. I'm impressed with the simplicity of the system. I'm pretty new to the ForEx market, and I have all of the understanding, and the rules for money management, etc. (Not risking more than 2% on any trade). I've been testing many systems, and it looks like this might be one of the best based on the risk:reward ratio, as many of the other systems I've seen on this page are something along the lines of 2:1 or even 3:1 risk:reward. I'm going to be trading this system live next week with very small amounts on my micro account and I'll post the results on here, along with screenshots, so if it doesn't work as well, I can figure out what's going on. Thanks for a great system. This might help me get up and running a little better.

Lucas
  • #122
  • May 15, 2009 4:21pm May 15, 2009 4:21pm
Hi. What can I say? I'm amazed too. So good and so simple.

I want to clearly understand some specific situations where I'm not sure exactly where the entry point (and the SL) should be, but for now I just want to congratulate and thank you, melpheos, for this impressive system.

A good weekend to all
  • #123
  • May 15, 2009 4:24pm May 15, 2009 4:24pm
THere were some good entry points on EJ, UJ and EU later after the drop.
  • #124
  • May 15, 2009 8:52pm May 15, 2009 8:52pm
Melpheos, can you clarify this for me?

"But the SL is not very important. What is important is making a proper risk calculation.

For example if you have 1000$ and want to risk 2% (20$) on a €$ trade and your SL is 20 pips , then your size lot should be 9000$ (that would be 0.09 standard size lot)
If your SL is 40 pips your size lot should be 4700$ ( 0.047 lot size) at current price.

Only Oanda will provide you a proper risk calculation if your account size is small."

I use Oanda and have a small account size, how does Oanda help with proper risk calculation?

For instance, say the account size is 400.00 and the stop loss is 30 pips. How do you risk 2% and take profit at 4%?

Thank you.
  • #125
  • Edited 5:13am May 16, 2009 5:01am | Edited 5:13am
Quoting Dreamliner
Melpheos, can you clarify this for me?

"But the SL is not very important. What is important is making a proper risk calculation.

For example if you have 1000$ and want to risk 2% (20$) on a €$ trade and your SL is 20 pips , then your size lot should be 9000$ (that would be 0.09 standard size lot)
If your SL is 40 pips your size lot should be 4700$ ( 0.047 lot size) at current price.

Only Oanda will provide you a proper risk calculation if your account size is small."

I use Oanda and have a small account size, how does Oanda help with proper...
In this case the proper size lot will be 2667$ on a €$ trade.

If your trade goes against you for 30 pips, you will loses exactly 8$.

I have attached the excel file i use to make this calculation.

You will believe first that the result are not correct but this depends on how you calculate your SL.

On Oanda, when you set your SL, it will add automatically the spread (so if you set 30 and the spread is 2, the calculation will be done on Oanda with 32SL)

For this file to work you need to enable DDE server under any standard MT4 plateform (tools/option/server tab). For mini plateform (the one with mEURCHF and not EURCHF) you will have to edit the formula.
Attached File(s)
File Type: xls Oanda position size.xls   35 KB | 626 downloads
  • #126
  • May 16, 2009 7:22pm May 16, 2009 7:22pm
Melpheos, thanks for this Excel file, but it doesn't seem to be able to pull the price in (even though DDE is enabled); is that because it is the weekend maybe?

Also, do you use this method to choose your stops? In other words, you decide to risk two percent, which gives you a "risk per trade" (based on your account balance), and so you then place your stop based on the above?

And it also looks as though you are just doubling your stop for your take profit for a 2:1 reward/risk. So if the stop worked out to be 40 pips you would place your take profit at 80, is this correct?

Quoting melpheos
In this case the proper size lot will be 2667$ on a €$ trade.

If your trade goes against you for 30 pips, you will loses exactly 8$.

I have attached the excel file i use to make this calculation.

You will believe first that the result are not correct but this depends on how you calculate your SL.

On Oanda, when you set your SL, it will add automatically the spread (so if you set 30 and the spread is 2, the calculation will be done on Oanda with 32SL)

For this file to work you need to enable DDE server under any standard MT4 plateform (tools/option/server...
  • #127
  • May 17, 2009 1:58am May 17, 2009 1:58am
If this wasn't the weekend gap, this would be the right setup now, would it?

-- Entry and SL, with 5 pip distance for signal confirmation, plus 2.8 on the upside for spread --

Attached Image (click to enlarge)
Click to Enlarge Name: eurjpy.gif Size: 17 KB


Sorry for the fibs, guys.
  • #128
  • May 17, 2009 2:17am May 17, 2009 2:17am
The entry marked invalid in the picture is correct right since that fractal is formed above the MA and we want the price to pierce the MA and then form the fractal.
Attached Image (click to enlarge)
Click to Enlarge Name: EJ.gif Size: 51 KB
  • #129
  • Edited 6:20am May 17, 2009 3:14am | Edited 6:20am
Quoting Dreamliner
Melpheos, thanks for this Excel file, but it doesn't seem to be able to pull the price in (even though DDE is enabled); is that because it is the weekend maybe?

Also, do you use this method to choose your stops? In other words, you decide to risk two percent, which gives you a "risk per trade" (based on your account balance), and so you then place your stop based on the above?

And it also looks as though you are just doubling your stop for your take profit for a 2:1 reward/risk. So if the stop worked out to be 40 pips you would place your take...
For DDE, no, it works also on WE. What MT4 do you use ?

For the stops, i usually use the last reversed fractal if it is not too far away from the break. For the number of pips yes, if i have a 40 pips SL, my TP should be AT LEAST 80 pips (this does not means that you should stop at 2 times your risk)

Quoting Alec
If this wasn't the weekend gap, this would be the right setup now, would it?

-- Entry and SL, with 5 pip distance for signal confirmation, plus 2.8 on the upside for spread --

Attachment

Sorry for the fibs, guys.
You got it right

Quoting AndsX
The entry marked invalid in the picture is correct right since that fractal is formed above the MA and we want the price to pierce the MA and then form the fractal.
You got it right too In fact i took this trade too but it ended in BE (+13 pips for 60 pips SL so that is less than .5%)

I couldn't take the next entry as i was not in front of my PC but the next entry could have rounded 4%
  • #130
  • Edited 3:51am May 17, 2009 3:37am | Edited 3:51am
You mean that one?

Attached Image (click to enlarge)
Click to Enlarge Name: eurjpy.gif Size: 19 KB


I took it here and on $Yen, my happy first trades with this system Just my exits... Not so good.

The first one, invalid, was good on €$.
  • #131
  • May 17, 2009 6:21am May 17, 2009 6:21am
Quoting Alec
You mean that one?

Attachment

I took it here and on $Yen, my happy first trades with this system Just my exits... Not so good.

The first one, invalid, was good on €$.
Yes this one. The previous Up signal should not have been taken using a pip buffer of 5-10 pips.
  • #132
  • May 17, 2009 7:04am May 17, 2009 7:04am
melpheos


would it work better if the 50ma is pointing up or down at an obvious angle on the 1hr chart and then take trades only in that direction on the 15min ?

*) this method seems to give good R:R but in your opinion, which pairs seem to work best ?

*) may i know what's your winning rate with this method thus far ?

it'll be great if this method can continue to give good R:R since it's mechanical. after all, tedious analysis might not give as good results.
  • #133
  • May 17, 2009 8:04am May 17, 2009 8:04am
Quoting findcount
melpheos


would it work better if the 50ma is pointing up or down at an obvious angle on the 1hr chart and then take trades only in that direction on the 15min ?

*) this method seems to give good R:R but in your opinion, which pairs seem to work best ?

*) may i know what's your winning rate with this method thus far ?

it'll be great if this method can continue to give good R:R since it's mechanical. after all, tedious analysis might not give as good results.
I dont know but i dont think so.

I have to do some back test but there does not seem to be any constitancy on that level. Sometime reverse is very good, sometime continuation is very good, sometime flat is very good too...
  • #134
  • May 18, 2009 7:01am May 18, 2009 7:01am
Melpheos, in this situation, which of the fractals would have been the signal - A, B, C or D?

And why? Is it the first, the last, the highest, the lowest...? Thank you for your help.

Attached Image (click to enlarge)
Click to Enlarge Name: eurjpy.gif Size: 17 KB
  • #135
  • Edited 2:50pm May 18, 2009 11:53am | Edited 2:50pm
The signal A-B-C was the good ones. D was the only signal not sticking to the rules.

Actually i took it but it reversed on me and closed at a bit more than BE.

But i have a $CAD short, £$ long and £Yen long still running ^^for a total of locked 18% ga
Attached Image
  • #136
  • May 19, 2009 5:21am May 19, 2009 5:21am
Quoting melpheos
The signal A-B-C was the good ones. D was the only signal not sticking to the rules.

Actually i took it but it reversed on me and closed at a bit more than BE.

But i have a $CAD short, £$ long and £Yen long still running ^^for a total of locked 18% ga


18% in a single day................

looks like this method is looking to be a real killer............

Melpheos............did you get these good results from taking more winning than losing trades or becoz of the good R:R............?
  • #137
  • May 19, 2009 6:39am May 19, 2009 6:39am
hi Melpheos,
I have try this system and see that good. but for the exit I use SMA 20 and EMA 12 cross. what do you think.
Attached Image (click to enlarge)
Click to Enlarge Name: exitpoint.jpg Size: 75 KB
  • #138
  • Edited 3:14pm May 19, 2009 11:45am | Edited 3:14pm
Quoting findcount
18% in a single day................

looks like this method is looking to be a real killer............

Melpheos............did you get these good results from taking more winning than losing trades or becoz of the good R:R............?
Good R:R ratio. I think 18% is the best i had with this method untill now (i remember doing 100% on a crazy day back in august 2007 what a day on GY ^^ )

Add 8% more today (6% on €$ and 2% on GY, no losing trade, GY could have given 4% but i was on a customer site that would not have been very professional ^^ ) The €$ was not respecting the rules, i have no idea why i took it but i would have taken it 45 minutes later with the same result (smaller SL resulting in the same TP)

Quoting abmyke
hi Melpheos,
I have try this system and see that good. but for the exit I use SMA 20 and EMA 12 cross. what do you think.
Sometime it's very good but most of the time you have better result just following the fractals. The only way to make sure would be to have an EA testing it for you.

Exit is the most difficult part of trading but thanks for the input.

edit : added another €$ trade for 4% but i lost i the meantime 1% on GY so 3% and a total of 11% for the day. I wanted to post it live but FF keep crashing on me (probably because of the DDos attack )
Attached Image (click to enlarge)
Click to Enlarge Name: 19-05-2009 18-19-50.png Size: 28 KB
Attached Image
  • #139
  • May 19, 2009 3:20pm May 19, 2009 3:20pm
Good trades mate. I saw some good trades on EY, GU last night.
  • #140
  • May 19, 2009 4:35pm May 19, 2009 4:35pm
Let see how it turns out
Attached Image
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