Hi folks, this is my first system post after almost 5 years of struggling and learning and losing and persisting, and I am finally satisfied that this system is working for me. It just may for you also.
RSG stands for "Ready, Set, GO" (corny perhaps!) but is a traffic light system, i.e. RED, ORANGE and GREEN signals to confirm ENTRY.
PAIR: EURUSD only, as this pair trends well. I have not tried this system on any other pair.
TF: combination of 1M and 5M TF's.
METHOD: This is a Moving Average trend-following system aimed at shorter TF periods, relying on a combination of Moving Average crossovers and their correlating MACD's for Entry / Exit signals.
Housekeeping:
1) limiting trades to 1 lot until consistency is proven;
2) maintaining maximum SL of 10 pips to mitigate losses / protect capital until consistency is proven and confidence is gained to loosen SL rules.
SETUP:
1) 1M TF
- Plot the following MA's - 21 EMA, 34 EMA, 144 EMA;
- add a MACD Histogram with alert with the following settings - 13/21/1 (colour the Histogram RED)
- add a MACD Histogram with alert with the following settings - 21/34/1
(colour the Histogram ORANGE)
- add a MACD Histogram with alert with the following settings - 34/144/1
(colour the Histogram GREEN)
2) 5M TF
- plot identical EMA's as per 1M chart
- add a MACD Histogram with alert with the following settings - 21/34/1
(colour the Histogram GREEN)
(NB: notice the MACD signal line is set to 1 - we want the signal line to be 'invisible' as we are relying on a confluence of separate MACD zero-line crossovers, and not a single MACD signal line crossover, for our signal confirmation).
See the diagrams below - notice on the 1M chart that the ORANGE MACD cross corresponds with the 21/34 EMA crossover, and the GREEN MACD cross corresponds with the 34/144 EMA crossover.
1) The RED MACD cross is a 13/21 EMA cross alert which signals you to watch for the next signal, the ORANGE MACD cross;
2) The ORANGE MACD cross alerts you to watch for your next signal, the GREEN MACD cross;
3) The GREEN MACD cross alerts you to watch for your next and last signal, the GREEN MACD cross on the 5M TF, which is your GO signal.
ENTER trade with 1 lot, and manage trade based on the following factors:
IF WATCHING the TRADE
1) Conservative EXIT - MACD DIVERGENCE EXIT:
- if you are happy to watch the trade in full, then monitor things such as MACD divergence on the RED and ORANGE MACD charts. A simple zero line crossover may be your signal to exit the trade;
2) Moderately Agressive EXIT - EMA CROSSOVER EXIT
- if you prefer to stay in the trade, watch to ensure the 21/34 EMA's on the 1M TF chart don't cross back across the 144 EMA. If they do, this may be your exit signal;
3) Agressive EXIT - Monitoring EMA CROSSOVER on 5M TF
- if you have the time and don't mind coming back to the screen regularly to check on your progress, watch for the exact same 21/34 EMA / 144 EMA crossover on the 5M TF chart.
IF AWAY FROM THE SCREEN
- As we are scalping and we never really "know" what the market will do at any point in time, we should set reasonably conservative targets with a tight SL. In my experience, a simple 10 pip SL with a 30 PIP target is sufficient to build confidence with the system.
See the example below where we entered on the 5M TF at 04:45GMT once our three prior 1M TF alerts were confirmed by the 5M TF signal.
I chose to stay and monitor the trade and managed the exit by choosing an ORANGE MACD zero-line crossover on the 1M chart, after just previously ignoring some MACD divergence (shown).
RESULTS:
Trade opened at 1.4366, and closed at 1.4428 for a total of 62 pips.
Not bad for a short-term trade. Obviously this kind of trending market occurs more frequently during UK and US market sessions, so trade timing is a factor also, however there are pips to be made at any time of day if you prefer to watch the screen and manage each trade this way.
I am happy for all comments on this system, positive and negative. We are all here to learn and share, and while I hope this system can help others, I am happy to accept criticism and continue developing myself as a trader from other's wisdom.
RSG stands for "Ready, Set, GO" (corny perhaps!) but is a traffic light system, i.e. RED, ORANGE and GREEN signals to confirm ENTRY.
PAIR: EURUSD only, as this pair trends well. I have not tried this system on any other pair.
TF: combination of 1M and 5M TF's.
METHOD: This is a Moving Average trend-following system aimed at shorter TF periods, relying on a combination of Moving Average crossovers and their correlating MACD's for Entry / Exit signals.
Housekeeping:
1) limiting trades to 1 lot until consistency is proven;
2) maintaining maximum SL of 10 pips to mitigate losses / protect capital until consistency is proven and confidence is gained to loosen SL rules.
SETUP:
1) 1M TF
- Plot the following MA's - 21 EMA, 34 EMA, 144 EMA;
- add a MACD Histogram with alert with the following settings - 13/21/1 (colour the Histogram RED)
- add a MACD Histogram with alert with the following settings - 21/34/1
(colour the Histogram ORANGE)
- add a MACD Histogram with alert with the following settings - 34/144/1
(colour the Histogram GREEN)
2) 5M TF
- plot identical EMA's as per 1M chart
- add a MACD Histogram with alert with the following settings - 21/34/1
(colour the Histogram GREEN)
(NB: notice the MACD signal line is set to 1 - we want the signal line to be 'invisible' as we are relying on a confluence of separate MACD zero-line crossovers, and not a single MACD signal line crossover, for our signal confirmation).
See the diagrams below - notice on the 1M chart that the ORANGE MACD cross corresponds with the 21/34 EMA crossover, and the GREEN MACD cross corresponds with the 34/144 EMA crossover.
1) The RED MACD cross is a 13/21 EMA cross alert which signals you to watch for the next signal, the ORANGE MACD cross;
2) The ORANGE MACD cross alerts you to watch for your next signal, the GREEN MACD cross;
3) The GREEN MACD cross alerts you to watch for your next and last signal, the GREEN MACD cross on the 5M TF, which is your GO signal.
ENTER trade with 1 lot, and manage trade based on the following factors:
IF WATCHING the TRADE
1) Conservative EXIT - MACD DIVERGENCE EXIT:
- if you are happy to watch the trade in full, then monitor things such as MACD divergence on the RED and ORANGE MACD charts. A simple zero line crossover may be your signal to exit the trade;
2) Moderately Agressive EXIT - EMA CROSSOVER EXIT
- if you prefer to stay in the trade, watch to ensure the 21/34 EMA's on the 1M TF chart don't cross back across the 144 EMA. If they do, this may be your exit signal;
3) Agressive EXIT - Monitoring EMA CROSSOVER on 5M TF
- if you have the time and don't mind coming back to the screen regularly to check on your progress, watch for the exact same 21/34 EMA / 144 EMA crossover on the 5M TF chart.
IF AWAY FROM THE SCREEN
- As we are scalping and we never really "know" what the market will do at any point in time, we should set reasonably conservative targets with a tight SL. In my experience, a simple 10 pip SL with a 30 PIP target is sufficient to build confidence with the system.
See the example below where we entered on the 5M TF at 04:45GMT once our three prior 1M TF alerts were confirmed by the 5M TF signal.
I chose to stay and monitor the trade and managed the exit by choosing an ORANGE MACD zero-line crossover on the 1M chart, after just previously ignoring some MACD divergence (shown).
RESULTS:
Trade opened at 1.4366, and closed at 1.4428 for a total of 62 pips.
Not bad for a short-term trade. Obviously this kind of trending market occurs more frequently during UK and US market sessions, so trade timing is a factor also, however there are pips to be made at any time of day if you prefer to watch the screen and manage each trade this way.
I am happy for all comments on this system, positive and negative. We are all here to learn and share, and while I hope this system can help others, I am happy to accept criticism and continue developing myself as a trader from other's wisdom.
THE LAST WORD - ALWAYS KEEP YOUR EMOTIONS IN CHECK!
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Attached File(s)
Trade to Live - Don't Live to Trade
