This is based on one of Rob Booker's systems that he talked about in this interview:
http://www.traderinterviews.com/free...cy-Trading.php
This is my understanding of the rules as he described them in the interview. If anyone believes I have missed something or have something wrong, please let me know.
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This should be used on GBP/JPY on the 5 minute chart.
Use only these indicators:
800 SMA (Black dashed line in my charts)
62 EMA (Red line in my charts)
200 SMA (Blue line in my charts)
A trade can not be made until the 800 SMA has not been touched for at least 500 bars.
Once that condition is met, you are waiting for a cross of the 62 EMA and 200 SMA with the 62 EMA heading towards the 800 SMA. A cross with the 62 EMA heading away from the 800 SMA should be ignored.
When the cross happens, you will place a trade in the direction of the 800 SMA. So, if the 800 SMA is above the current price, you would place a buy trade and if the 800 SMA is below the current price you would place a sell trade.
Your take profit is the 800 SMA. You should adjust your take profit as the 800 SMA moves.
Your stop loss for sell trades is 20 pips above the highest high of the last 500 candles.
Your stop loss for buy trades is 20 below the the lowest low of the last 500 candles.
If the risk to reward ratio is 1:1 or better, take the trade, if not then ignore the trade.
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To help visualize those rules, I've created the attached template and custom indicator. The indicator places the number of bars since the price has touched the 800 SMA in the upper right corner of the chart window. It also places a block of text at each valid 62/200 cross with the Reward/Risk Ratio, Risk, Reward, Initial TP, SL, Bars since price touched 800 SMA, and “Buy”/”Sell”.
The indicator has the following settings:
minimum_bars_from_800 – This defaults to 500. All crosses that happen when the 800 was touched less than this number of bars ago will be ignored by the indicator.
text_size – This setting may need to be adjusted based on zoom levels.
indicator_spacing – This is the number of pips that each line of text should be spaced out from each other when displayed. This setting may need to be adjusted based on zoom levels and the number of digits used by your version of MT.
stop_loss_from_last_x_bars – Defaults to 500. The suggested stop loss is calculated by taking the highest high or lowest low from the last x bars.
SL_distance_from_LL_or_HH – Defaults to 200. The highest high or lowest low will have this number of pips added to or subtracted from it to find the final SL. This number will need to be adjusted based on the number of digits used in your version of MT. May to need to be set to 20 in your system.
The first picture shows one good trade and the indicator. The second picture shows how the text in the upper right corner looks.
If you have any suggestions for improvement or you think I missed something, please let me know.
http://www.traderinterviews.com/free...cy-Trading.php
This is my understanding of the rules as he described them in the interview. If anyone believes I have missed something or have something wrong, please let me know.
----------------------------------------------------
This should be used on GBP/JPY on the 5 minute chart.
Use only these indicators:
800 SMA (Black dashed line in my charts)
62 EMA (Red line in my charts)
200 SMA (Blue line in my charts)
A trade can not be made until the 800 SMA has not been touched for at least 500 bars.
Once that condition is met, you are waiting for a cross of the 62 EMA and 200 SMA with the 62 EMA heading towards the 800 SMA. A cross with the 62 EMA heading away from the 800 SMA should be ignored.
When the cross happens, you will place a trade in the direction of the 800 SMA. So, if the 800 SMA is above the current price, you would place a buy trade and if the 800 SMA is below the current price you would place a sell trade.
Your take profit is the 800 SMA. You should adjust your take profit as the 800 SMA moves.
Your stop loss for sell trades is 20 pips above the highest high of the last 500 candles.
Your stop loss for buy trades is 20 below the the lowest low of the last 500 candles.
If the risk to reward ratio is 1:1 or better, take the trade, if not then ignore the trade.
----------------------------------------------------
To help visualize those rules, I've created the attached template and custom indicator. The indicator places the number of bars since the price has touched the 800 SMA in the upper right corner of the chart window. It also places a block of text at each valid 62/200 cross with the Reward/Risk Ratio, Risk, Reward, Initial TP, SL, Bars since price touched 800 SMA, and “Buy”/”Sell”.
The indicator has the following settings:
minimum_bars_from_800 – This defaults to 500. All crosses that happen when the 800 was touched less than this number of bars ago will be ignored by the indicator.
text_size – This setting may need to be adjusted based on zoom levels.
indicator_spacing – This is the number of pips that each line of text should be spaced out from each other when displayed. This setting may need to be adjusted based on zoom levels and the number of digits used by your version of MT.
stop_loss_from_last_x_bars – Defaults to 500. The suggested stop loss is calculated by taking the highest high or lowest low from the last x bars.
SL_distance_from_LL_or_HH – Defaults to 200. The highest high or lowest low will have this number of pips added to or subtracted from it to find the final SL. This number will need to be adjusted based on the number of digits used in your version of MT. May to need to be set to 20 in your system.
The first picture shows one good trade and the indicator. The second picture shows how the text in the upper right corner looks.
If you have any suggestions for improvement or you think I missed something, please let me know.
