Battle of the Bands

+ 109 (edit) pips on gu short off the 4hr

+ 327 pips off eu short in 13 days..average of 25 pips per day.

+155 on AU short. Dont watch this pair much, but just a nice trade i noticed.

I thanks for your good system.

Can you post your MACD and ROC indicator?

How ROC is functioning to validate the SMA 32, 100MA on the chart. I understand the MACD very good give the direction on > 4H.

But i not normaly trade at H1. I use Stoch to entry and exit when MACD is crossing. By your indicator it give guideline where the price should move. By Adding the BB normally i can target my exit point.

Appreciate the video, BP...helped to put things in perspective...
After going back maually to compare the difference between using 15sma and 32sma, I'd say it's a toss up...
I like the smoothness of the 32sma's and will proably stay with them...
After all, still need to confirm entry with the MACD or ROC, etc.
Hope to see more of your trades posted as this thread moves along.
I'll post as well as I put your offering to the test...
Trade well.
Cliff

the macd is the same on my platform like it is on yours. I made no changes to it.

ROC is on a 28 length, not the default of 14, so make sure to adjust.

Hi all,

Been trading 4 years and have tried all indicators or most anyhow, finally went to price action and bollnger bands awhile back and that is the way to go, in always studying, I saw this thread got interested and liked what I saw with this ROC indicator except cant find it anywhere, finally got it off of cms forex charts, but when placing it into my ibfx account it just doesnt work like every other indicators that I used to place into my account.

Does anyone have the Roc indicator, if so can you place it here in this thread so I can test it and see what it looks like and how it works, im sure its a laggard as well, but curiosity is there as usual, any help would be apprciated, thanks.

hlass

All indicators are lagging, but thats not always such a bad thing. Sometimes waiting longer to enter trades will keep you out of many bad ones.

Yes, so very true, all indicators are lagging, and yes that is a good thing, because many times, there will be a move and then a retrace and then the real move, this relates to a breakout or a 1-2-3 move, at the same point, I have tried many many indicators the past 4 years, and do trade very successfully, but one is always learning in forex and although I trade with just candles and bollinger bands, I continue to look at many things, nothing is as good as pure price action, but education is always enhanced while studying, even if studying indicators, as when I study how something works, it is great chart time, and scrolling the charts is a very important part of education in the forex mkt.

Please, if someone has the ROC rate of change indicator, please post it here, so I can see how it works, thank you very much.
hlass

Hope everyone had a great holiday, now time to jump back into things.

Short GU off 4hr.

Made a few pips profit on the trade, but not much. We have a long signal now, however price is below both 100 and 200 sma's which would make this a counter trade if we went long here.

I drew a simple trend line, and if we can break this, I'll try a long trade. So basically once price breaks the 100sma, I'll take it.

Notice last time we attempted to push, the market formed a pin bar and reversed. Also look at your momentum indicator, and you should see that momentum (strength) has been building up sinse 7 days ago when the ROC bottomed out and began to rise, eventhough price was flat.

Momentum tried to push higher last time also when we had that false break out. A big move could be around the corner.

got the break. Going long now a few pips shy of the 100sma. Considering the wide stop, I dont think this will be a big issue taking it a few pips early at 6129

Took 95 pips off that GU trade, and moved rest to break even, which was later stopped out.

If anyone is paper trading this system, please let me know, because I might make a minor change to the system soon. I was just curious.

If anyone out there is trading this, I am making some changes.

1. Both 100 and 200 are now EMA's, and NOT SMA's ..this is to follow recent price action more closely.

2. Both 32 MA's have been deleted, and Bollinger Bands have taken their place. The bands will help us find s/r, and possible exit targets ( when price reaches the upper or lower bands etc..)

3. It is no longer a rule to sell half your position after the next bar unless YOU choose too. Yes, doing this may increase your number of winning trades, but many times the pips gained is small, and taking only half off your money, really cuts into the pnl, However if your the trader that likes to take short, fast profits, then dont let me stop you, this is only optional.

4. The 100 and 200 are good indicators of trend, but buying/shorting when price breaks these levels may not always be the best thing to do as the market:
* can be topped out or bottomed out when you take the trade. Instead, you may want to wait for price to come down/up to its bollinger band or a test of the 20sma before taking the long/short position.

* check with your macd histogram and momentum indicator to confirm the move is real, and has a good chance of success

* If it looks like MACD and/or the momentum has topped or bottomed off, its probably safe to assume that you missed the move, instead, what we want to see is when MACD and/or momentum crosses above/below the 0 line. MAJOR trends tend to start at the 0 cross.

The chart I have attached shows how the BB's could have helped me get in much sooner, and make 117 pips more than I would have.

This chart shows a break of the 100.

* we got the break, BUT the market was overbought..we can tell because
1. price failed to close higher on the next bar
2. MACD was already topped out

* Price came down to the 20sma, where the bulls tried to push higher, but sellers took over forming a "pin bar". Also notice at this same time, MACD turned negative.

* we fell all the way down to the lower BB line, where we tried to push up, but yet again, we failed to close higher on the next bar.

More on 100/ 200 sma breaks:

I wanted to point out that many times price breaks the 100 or 200, wait for the close, and then wait for a break of last candles low or high...as you can see here price broke the 200ema red line, but did NOT close below it, but rather formed a green hammer candle (bullish)...After that candle we NEVER broke lows, but rallied a good 50 pips!.

Now price broke, and barely closed above the 100ema, the next candle broke highs, but closed as a pin bar. Had I been long this, I'd probably be thinking about selling...and sure enough thats what happened. A loss could have been prevented if one waited for macd to cross 0..had they done that, they would have seen the pin bar, and never bought in the first place.

This is how using the other indicators can help confirm your trades.

- keep it Pipin yall !

More rounds of changes have been made to this trading system.

1. 100 and 200sma will no longer be used
2. Momentum is no longer used
3. ATR(5) has been added
4 ADX(30) has been added
5. Parabolic SAR is no longer used
6. Stochastics has been added with 30/10/10 settings
7. MACD histogram added

The new rules.

Long trades:
1) wait for a stochastic cross to the upside
2) wait for adx crossover to the upside
* If ADX is already positive, thats fine.
3) wait for MACD to crossover to the upside
4) your entry candle must meet all the above requirements (with one exception I'll mention later), AND the price bar that you enter on MUST:
A --> preferably open above the previous candle's close
B --> Make higher highs than the previous candle
C --> close higher than the previous candle
D --> IF candle makes a lower low, the trade is ignored regardless if rules A-C are met. If this is the case, wait for the next bar
E --> wait for the bar to close, or be near its closing time by a few minutes. The close of the bar is important.

Stops

Your stop is the value of the upper or lower BB bands. Other than that, the Bollinger bands in this system are ignored. If you want, you can even take them off your charts until its time to take a trade.

Early Exits

If the next price bar closes as a red bar, chances are we took the wrong entry. Either close the trade or move stops to low of entry candle if possible to reduce risk.

Ranging Markets

This system doesn't work well in ranging markets. Trade at your own risk.

Targets

Our targets are 3x the ATR value. Your ATR should be set to 5. Once price reaches the target, take 1/2 your profit and move stop to be, or put in a trailing stop of whatever the 3x atr value is. For example if ATR's value is 58, we look for 174 pips, because 58x3 = 174. Then put in a 174 pip trailing stop...yes I know this is a HUGE stop, but it will allow you to stay in winning trades in a strong market. If the market drops, and stops you out, so what??..you already made 174 PIPS! on 1/2 your position.

Scaling in

The only time we scale into a trade is when stochastics and macd confirm a trade, BUT ADX does not. In this case, take 1/3rd your normal risk..mine is 3%, so I'd take 1% risk on that trade, and another 2% once adx crosses and all other rules are met.

Shorts

The same rules for longs except reversed.

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Below are some trades off 4hr charts of g/u and e/u, for a total of 648 pips last month alone!

This system is still in testing.

In the first chart, the white boxes show where stochs and macd confirm a trade, but ADX is still negative. Your best chances are to take trades in the direction of the adx.

now here is e/u

e/g daily. Good example of how sometimes taking a trade before adx crosses can yield some nice pips. 330 in little over a month.

are you sure you don't need another indicator for confirmation lol