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Yet another 50 SMA trading strategy

  • #161
  • May 22, 2009 1:16am May 22, 2009 1:16am
Quoting Alec
Regarding that, this is what I did:

On the H1 chart, I found a break of the SMA(20) (the redish one) and the corresponding long signal fractal.

Attachment

I found the previous opposite fractal too far so, trying to find an alternative, went to the M30 chart and used the next opposite fractal to define the SL level.

Attachment

The distance between them is around 70 pip and I thought 140 pip could be too much to expect to TP, so I chose to go for a 1:1 R/R, apparently not as good as in the M15 time frame.

Does this...
Sorry but your entry was not the good one because you should be allready in a trade on the previous fractal.

I will make this more clear on the first port
  • #162
  • May 23, 2009 12:23pm May 23, 2009 12:23pm
Yes, I get what you say.

What happened was that the price went below the curve. There are two candles (barely, but they are) below the SMA (area 'A' in the chart). Then the price crossed back up and the first fractal after that ('B' in the chart) was the one I took for the signal.

Attached Image (click to enlarge)
Click to Enlarge Name: 3.png Size: 15 KB


I thought this was according to the rules..
  • #163
  • May 23, 2009 1:15pm May 23, 2009 1:15pm
Quoting Alec
Yes, I get what you say.

What happened was that the price went below the curve. There are two candles (barely, but they are) below the SMA (area 'A' in the chart). Then the price crossed back up and the first fractal after that ('B' in the chart) was the one I took for the signal.

Attachment

I thought this was according to the rules..
You are right, the trade you pointed out is valid but...
Attached Image
  • #164
  • Edited 2:24am May 27, 2009 1:33am | Edited 2:24am
One obvious entry.

edit: closed at BE failed break out.
Attached Image
  • #165
  • May 29, 2009 4:12pm May 29, 2009 4:12pm
How are you fixing your SL. If we have to put the SL behindthe previous fractal than in most cases it seems a huge stop and 1:2 risk:reward seems impossible?

I am thinking of doing a fixed stop of 20pips for low voliatile pairs and 30 pips for jpy pairs. Any idea on that?

btw - howz your trading on this strategy this week?
  • #166
  • May 29, 2009 4:48pm May 29, 2009 4:48pm
Quoting AndsX
How are you fixing your SL. If we have to put the SL behindthe previous fractal than in most cases it seems a huge stop and 1:2 risk:reward seems impossible?

I am thinking of doing a fixed stop of 20pips for low voliatile pairs and 30 pips for jpy pairs. Any idea on that?

btw - howz your trading on this strategy this week?
Very good week thanks to today in particular Lost 6% on EURYEN but made largely the losses on USD pairs USDYEN, USDCAD, NZDUSD and EURUSD(one 1% trade on GY)

For the stop, if it's too large, do not take the trade, this is the safest way or find another reverse fractal or another resistance.
  • #167
  • May 29, 2009 6:15pm May 29, 2009 6:15pm
That's nice. Are you trading most of the USD and Yen pairs? Are you trading just this system?
  • #168
  • May 29, 2009 6:23pm May 29, 2009 6:23pm
Quoting AndsX
That's nice. Are you trading most of the USD and Yen pairs? Are you trading just this system?
i'm also trading retracement continuation and divergence strategy but i dont scalp.

So i have 4 strategies at hand.

Retracement with fibonnaci and sexy stochastics
Continuation with sexy stochastics
Divergence with stochastics alone
And fractal for breakouts.

And i have yet to find a good exit strategy beside setting a TP.
  • #169
  • Jun 1, 2009 2:36pm Jun 1, 2009 2:36pm
Quoting melpheos
i'm also trading retracement continuation and divergence strategy but i dont scalp.

So i have 4 strategies at hand.

Retracement with fibonnaci and sexy stochastics
Continuation with sexy stochastics
Divergence with stochastics alone
And fractal for breakouts.

And i have yet to find a good exit strategy beside setting a TP.
Cool. What do u think of just trading this strategy.
  • #170
  • Jun 1, 2009 2:49pm Jun 1, 2009 2:49pm
Quoting AndsX
Cool. What do u think of just trading this strategy.
This strategy alone is enough and using only it will save time and you will not become crazy ^^
  • #171
  • Jun 1, 2009 3:08pm Jun 1, 2009 3:08pm
Quoting melpheos
This strategy alone is enough and using only it will save time and you will not become crazy ^^
are you getting crazy
  • #172
  • Jun 1, 2009 3:35pm Jun 1, 2009 3:35pm
Quoting AndsX
are you getting crazy
Not yet But sometime you get mixed signals and this can lead you in doing stupid thing (like trading mixed signals)
  • #173
  • Jun 3, 2009 2:17pm Jun 3, 2009 2:17pm
Couple of occasions i have seen fake breakouts where a strong candle turns to a pinbar at the end. If i wait till the candle to complete then i will miss trades where the strong momentum pushes the price very fast.

Is there a way to handle this? I am thinking of entering the trade mechanically 5 pips away but set SL to 20 pips for EU and 30 pips for GU instead of setting the stop below the previous fractals so if you hit the SL at least your risk:reward will save you.
  • #174
  • Jun 3, 2009 2:48pm Jun 3, 2009 2:48pm
Quoting AndsX
Couple of occasions i have seen fake breakouts where a strong candle turns to a pinbar at the end. If i wait till the candle to complete then i will miss trades where the strong momentum pushes the price very fast.

Is there a way to handle this? I am thinking of entering the trade mechanically 5 pips away but set SL to 20 pips for EU and 30 pips for GU instead of setting the stop below the previous fractals so if you hit the SL at least your risk:reward will save you.
Hi AndsX,

from my understanding of melpheos system, a pending order is set at the fractal... this can get you into those beatiful "hit and run" breakouts, but these are less frequent, and one can never know which one will be a runner.

I'm trading a similiar approach, and learned a lot from this thread, but I'm usually a little more conservative. Very often breakouts are followed by a retrace (1/2, 1/3, some Fib, whatever), and very often this retrace comes back to fractal level. If this fractal broken is holding now as new S/R, then it's time to jump in... Of course, some "hit and runners" will be missed, and you'll be pissed off...

That was just me 2 cents, trying to help, but it's a different approach os melpheo's, which I think is very good...

Sorry, If seems too much deviation, and BTW, thanks for shring, melpheos...been following this thread and learning a lot!

Cheers!

HT
Many share my views with me. But I don't share them with them...
  • #175
  • Jun 3, 2009 3:12pm Jun 3, 2009 3:12pm
Quoting HouseTrader
Hi AndsX,

from my understanding of melpheos system, a pending order is set at the fractal... this can get you into those beatiful "hit and run" breakouts, but these are less frequent, and one can never know which one will be a runner.

I'm trading a similiar approach, and learned a lot from this thread, but I'm usually a little more conservative. Very often breakouts are followed by a retrace (1/2, 1/3, some Fib, whatever), and very often this retrace comes back to fractal level. If this fractal broken is holding now as new S/R, then it's time...
Thanks HT you advice is really helpful and sometimes i do that esp if the price is sitting at the top or moving against the the current timeframe trend.

What i really like about me melpheo's system is that it cuts the human discretion on entry and that really helps

btw do you trade every fractal breakout?
  • #176
  • Jun 3, 2009 3:42pm Jun 3, 2009 3:42pm
Quoting AndsX
Thanks HT you advice is really helpful and sometimes i do that esp if the price is sitting at the top or moving against the the current timeframe trend.

What i really like about me melpheo's system is that it cuts the human discretion on entry and that really helps

btw do you trade every fractal breakout?
... But, even trying to be as much automated as I can , it's impossible not to use a bit of discretion, ie.... avoid buying a breakout against a huge R zone...

This is very much alike the DIBS concept.... take a good entry point with tight SL... personally, I don't take the trade if the fractals distance is too wide. And after PA crosses the 50MA, I'm looking for take the first, or the second fractal. If I miss the train, I keep waiting on the station for the next...

Cheers!
Many share my views with me. But I don't share them with them...
  • #177
  • Jun 4, 2009 11:16am Jun 4, 2009 11:16am
Quoting AndsX
Couple of occasions i have seen fake breakouts where a strong candle turns to a pinbar at the end. If i wait till the candle to complete then i will miss trades where the strong momentum pushes the price very fast.

Is there a way to handle this?
If i'd knew i would allready be a millionaire

But you have a good point. The way i trade it is low win rate ratio but i catch allmost every big move so my risk/reward is very high but it is possible that taking only a trade after a breakout and a retracement can increase the win/rate ratio without decreasing too much the risk/reward ratio.

Only backtest over a long period of time can tell you that.
  • #178
  • Jun 4, 2009 5:51pm Jun 4, 2009 5:51pm
Quoting HouseTrader
... But, even trying to be as much automated as I can , it's impossible not to use a bit of discretion, ie.... avoid buying a breakout against a huge R zone...

This is very much alike the DIBS concept.... take a good entry point with tight SL... personally, I don't take the trade if the fractals distance is too wide. And after PA crosses the 50MA, I'm looking for take the first, or the second fractal. If I miss the train, I keep waiting on the station for the next...

Cheers!
yea this seems to work better for me
  • #179
  • Jun 4, 2009 5:52pm Jun 4, 2009 5:52pm
Quoting melpheos
If i'd knew i would allready be a millionaire

But you have a good point. The way i trade it is low win rate ratio but i catch allmost every big move so my risk/reward is very high but it is possible that taking only a trade after a breakout and a retracement can increase the win/rate ratio without decreasing too much the risk/reward ratio.

Only backtest over a long period of time can tell you that.
Aren't you a millionaire already or in the process of making one
  • #180
  • Jun 5, 2009 12:54am Jun 5, 2009 12:54am
Quoting AndsX
Aren't you a millionaire already or in the process of making one
More than Doubled one of my account in two monthes but it was the smallest one
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