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Simple 5 / 8 moving average crossover

  • #841
  • Edited 2:55pm Aug 21, 2009 1:03pm | Edited 2:55pm
Looks like a good cross for a buy on the EUR/USD I am up on it right now..
  • #842
  • Aug 21, 2009 9:25pm Aug 21, 2009 9:25pm
Yeah, everything set for a good trade from yesterday's cross. This will probably be my real swing trading technique. My backtests convinced me (see post #838). I didn't even try to improve the strategy and I'm sure it can be done. For instance, stop loss could be brought to breakeven + 5 pips when 20-30 pips gains are reached (or like on the picture right now in case price reverses) or closing part of the trade when price reaches 1XATR. I haven't played with those possibilities lately because I was looking for short term strategies. I think most of the times false signals occur when market is ranging. I tried the Bollinger Squeeze indicator to avoid those situations. It helps, but not perfect. I also have Choppiness index, but I don't know what setting to use. Any ideas are welcome.

This weekend, I will backtest July and August 2009 and maybe 2008 so I get better overall picture.

Chamane

http://i28.tinypic.com/6fv1vq.gif
  • #843
  • Aug 22, 2009 3:22am Aug 22, 2009 3:22am
Quoting chamane
Yeah, everything set for a good trade from yesterday's cross. This will probably be my real swing trading technique. My backtests convinced me (see post #838). I didn't even try to improve the strategy and I'm sure it can be done. For instance, stop loss could be brought to breakeven + 5 pips when 20-30 pips gains are reached (or like on the picture right now in case price reverses) or closing part of the trade when price reaches 1XATR. I haven't played with those possibilities lately because I was looking for short term strategies. I think most...
Only a suggestion but do you tried the rainbow to avoid choppy markets?
  • #844
  • Aug 22, 2009 3:34am Aug 22, 2009 3:34am
Quoting MCFly
Only a suggestion but do you tried the rainbow to avoid choppy markets?
But I don't know if it makes sense to use the rainbow and macd.
  • #845
  • Aug 22, 2009 7:23am Aug 22, 2009 7:23am
Quoting MCFly
Only a suggestion but do you tried the rainbow to avoid choppy markets?
I suppose the rainbow is a group of moving averages, right? How do you use them to avoid ranging market?

By the way, my use of the MACD in my chart is only a way to show the cross of EMA. It is not standard setting.

Chamane

http://i30.tinypic.com/fmqmtd.gif
  • #846
  • Aug 23, 2009 7:29am Aug 23, 2009 7:29am
Quoting chamane
I suppose the rainbow is a group of moving averages, right? How do you use them to avoid ranging market?

By the way, my use of the MACD in my chart is only a way to show the cross of EMA. It is not standard setting.

Chamane

http://i30.tinypic.com/fmqmtd.gif
Hi,

you can read the part of this blog which deals with the rainbow to get a short overview. http://www.bustathief.com/earn-money...rend-follower/
  • #847
  • Aug 23, 2009 12:05pm Aug 23, 2009 12:05pm
Quoting MCFly
Hi,

you can read the part of this blog which deals with the rainbow to get a short overview. http://www.bustathief.com/earn-money...rend-follower/
Thanks a lot. I'll have a look. I think that wichever the indicator you use for identifying choppy markets, the first one or two signals of a trading system will always be false before that indicator triggers. I will probably stick to BBSqueeze (BBands + Kertnel channel) for ranging situations.

Chamane
  • #848
  • Aug 23, 2009 12:38pm Aug 23, 2009 12:38pm
Quoting chamane
Thanks a lot. I'll have a look. I think that wichever the indicator you use for identifying choppy markets, the first one or two signals of a trading system will always be false before that indicator triggers. I will probably stick to BBSqueeze (BBands + Kertnel channel) for ranging situations.

Chamane
Yes I think the best is always to use what fits you most (and works )
  • #849
  • Aug 25, 2009 6:08pm Aug 25, 2009 6:08pm
To start off i am very new to forex still so dont fall off the deep edge of the pool if some of these questions sound dumb...

1: Is this a good way to trade without sitting infront of the computer all day?

2: what times are you finding your self tradeing the most?

3: At first (post #1 he mentioned using SL from previous day closing) you all still using that?

4: Lastly, If not using SL do you use TS alot in this strategy?

All help would be great for I am starting to use Real money next week after 2 months of demo account, currently using big dog strat and doing well, so far im still ahead . Although colleges starts soon and cant sit in front of computer endlessly till next summer break.

Thanks and hope you all make many many pips!!!
  • #850
  • Aug 25, 2009 7:44pm Aug 25, 2009 7:44pm
Quoting pipinz
To start off i am very new to forex still so dont fall off the deep edge of the pool if some of these questions sound dumb...

1: Is this a good way to trade without sitting infront of the computer all day?

2: what times are you finding your self tradeing the most?

3: At first (post #1 he mentioned using SL from previous day closing) you all still using that?

4: Lastly, If not using SL do you use TS alot in this strategy?

All help would be great for I am starting to use Real money next week after 2 months of demo account, currently...
Hi,

I have only backtested my 5/8 ema crossing strategy wich is post #1 + RSI and higher timeframe filters. But I will try to answer the best I can:

1+2: it's a daily strategy so you don't sit in front of your screen all day. Review all the pairs you trade at the start of the day and enter trades when signals are triggered.

3: I backtested with 1XATR as SL and it proved to be good. But I observed a few times that more space was given by the previous day closing that would have allowed me to stay in a wininng trade instead of being stopped out. My RR ratio would have been different though.

4: I have not used a trailing stop so I can't tell if it would be better.

From my backtests, I can tell that the major constraint with this strategy is choppy markets. I didn't consider them in my tests and took all the signals I got. Although I had positive results overall, some of the pairs were showing many negative results in a row, hence showing more choppiness (see post #838 for best and worst pairs).

Chamane
  • #851
  • Aug 25, 2009 7:46pm Aug 25, 2009 7:46pm
Quoting chamane
Yeah, everything set for a good trade from yesterday's cross. This will probably be my real swing trading technique. My backtests convinced me (see post #838). I didn't even try to improve the strategy and I'm sure it can be done. For instance, stop loss could be brought to breakeven + 5 pips when 20-30 pips gains are reached (or like on the picture right now in case price reverses) or closing part of the trade when price reaches 1XATR. I haven't played with those possibilities lately because I was looking for short term strategies. I think most...
Looks like great, but you should add some classic patterns to this system.
  • #852
  • Aug 25, 2009 10:10pm Aug 25, 2009 10:10pm
Quoting F][successT
Looks like great, but you should add some classic patterns to this system.
You're right. There are other tools that can be used like support and resistance, but to me adding RSI and checking higher timeframes was already an improvement to the original strat. If you have something in mind, go ahead. I am not familiar with classic patterns. I know how to use harmonic patterns, but not candle patterns. I would certainly benefit of your suggestions.

Chamane
  • #853
  • Aug 27, 2009 12:28am Aug 27, 2009 12:28am
Hi,
I downloadaed the zip file and finally got the bands to work but the indicater is differant to the one shown in this thread.
The bands I have are 3 top red middle white bottom red.
Have the bands been changed and if so which do you use for stop and profit?
  • #854
  • Aug 30, 2009 6:11pm Aug 30, 2009 6:11pm
Hello @ all !

I am not new in this forum and in FX, but this is my first post.

At first: Thank you for this strategy !

But i´m wondering that some people post here picture from the broker oanda.
this software never allowed to put the EMA 8 applied to open and the EMA 5 applied to close.
You can only put any EMA at the closing price. this is a great disadvantage - for the strategy and for the broker (well, i am using oanda, too)

greetings from perú
adios
  • #855
  • Sep 1, 2009 4:07pm Sep 1, 2009 4:07pm
Nobody have to say something ?

Well, my opinion is, that this system works ONLY with this EMA-Changes (open and close shifting)

Anyway.

Looks like we have 5 crosses in Daily chart today:

AUD / USD (Well, the candle is a little to long, so be carefull)
EUR / USD
NZD / USD
USD / CHF
EUR / NZD

Can anybody confirm ?

Adios
  • #856
  • Sep 1, 2009 8:16pm Sep 1, 2009 8:16pm
Quoting Nolda
Nobody have to say something ?

Well, my opinion is, that this system works ONLY with this EMA-Changes (open and close shifting)

Anyway.

Looks like we have 5 crosses in Daily chart today:

AUD / USD (Well, the candle is a little to long, so be carefull)
EUR / USD
NZD / USD
USD / CHF
EUR / NZD

Can anybody confirm ?

Adios
Well I see the cross on both the Eur/Usd & Nzd/Usd .. I have done really good with the Eur/Usd this week already... I am in both of them right now.
  • #857
  • Sep 2, 2009 5:43am Sep 2, 2009 5:43am
Quoting Slkosier
Well I see the cross on both the Eur/Usd & Nzd/Usd .. I have done really good with the Eur/Usd this week already... I am in both of them right now.

Slkosier,
Would you be so kind as to share with us under what criteria you entered the eur/usd trade?
Was it the 5/8 cross @ 6am New York time yesterday?

-Unfortunately my trading day starts shortly after that.
SANTHOSHAM
  • #858
  • Sep 2, 2009 6:06am Sep 2, 2009 6:06am
My first TP (my First Position) was hit with +50 Pips....
  • #859
  • Sep 2, 2009 6:19am Sep 2, 2009 6:19am
The way I trade I would not have entered on any of them because they are not in agreement with the higher timeframe (weekly). Also, except for USDCHF, they show a range situation. I use BBSqueeze indicator for that. And ecxept for AUDUSD, the RSI(8) stands between level 45 and level 55 so not enough momentum for me. But that's just me at the moment of the cross. If you consider only the cross of ema, they all show an entry signal.

Chamane
  • #860
  • Sep 2, 2009 6:22am Sep 2, 2009 6:22am
Quoting chamane
The way I trade I would not have entered on any of them because they are not in agreement with the higher timeframe (weekly). Also, except for USDCHF, they show a range situation. I use BBSqueeze indicator for that. And ecxept for AUDUSD, the RSI(8) stands between level 45 and level 55 so not enough momentum for me. But that's just me at the moment of the cross. If you consider only the cross of ema, they all show an entry signal.

Chamane
Oops! Wrong sentence.

The way I trade I would not have entered on any of them because they are not in agreement with the higher timeframe (weekly). Also, except for USDCHF, they show a range situation. I use BBSqueeze indicator for that. And ecxept for AUDUSD, the RSI(8) stands between level 45 and level 55 so not enough momentum for me at the moment of the cross. But that's just me. If you consider only the cross of ema, they all show an entry signal.
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