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5Min Intraday System

  • #7,241
  • Oct 31, 2010 10:48pm Oct 31, 2010 10:48pm
Quoting Golfer
Hi N

Your question:

For any long or short trade, what should be stop loss criteria?

To me. it is all about your style of trading. Personally I like to put the SL below the war zone in a long trade or above the war zone in a shor trade. Or you can use the previous swing high or low and put your SL just below or above that previous swing high or low.

Just be careful with your risk ratio.

Enjoy it
I have read that stop loss rqmt in the first few pages. Preferably 6 + spread below/above 21 EMA, and trade to be taken around 21 EMA as you stated.

I think this set up will work when there is good volume and price is trending. I mean Europeon and US sessions. Not ASian session.

Your comments?
Intraday only.
  • #7,242
  • Edited 8:29am Nov 1, 2010 8:17am | Edited 8:29am
Quoting navk
I have read that stop loss rqmt in the first few pages. Preferably 6 + spread below/above 21 EMA, and trade to be taken around 21 EMA as you stated.

I think this set up will work when there is good volume and price is trending. I mean Europeon and US sessions. Not ASian session.

Your comments?
Hi N

Yes, I don't trade the Asian session anymore - got burned too many times trying to trade the Asian session with this 5min system. Therefore, personally I won't recommend trading the Asian session using this system, but members might have other opinions.

Stop loss - really up to you and your style of trading. See what is working for you. As a start, you can start with Phillip's recommendations.
Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,243
  • Edited 12:23pm Nov 3, 2010 10:41am | Edited 12:23pm
In a trending market conditions, the trade can be taken in between 10 and 21 EMA and stop loss can be 6 + spread above/below 21 EMA. It works. At times. the price tend to go towards 50 SMA.

So it depends on individual's method of placing stop loss.

Golfer : You only refer to Moving averages and SMA angle? No more MACD histogram as philip said?
Intraday only.
  • #7,244
  • Nov 4, 2010 12:35am Nov 4, 2010 12:35am
Quoting navk
In a trending market conditions, the trade can be taken in between 10 and 21 EMA and stop loss can be 6 + spread above/below 21 EMA. It works. At times. the price tend to go towards 50 SMA.

So it depends on individual's method of placing stop loss.

Golfer : You only refer to Moving averages and SMA angle? No more MACD histogram as philip said?
Hi N

My answers to your comments/questions:


In a trending market conditions, the trade can be taken in between 10 and 21 EMA and stop loss can be 6 + spread above/below 21 EMA. It works. At times. the price tend to go towards 50 SMA.


Nowadays (as I've started to trade price actions) I like to put the emergency SL below the previous swing high or low. However, the risk reward ratio becomes "bad". So, one needs to exit earlier (once you see the price moves against you).

So it depends on individual's method of placing stop loss.

Yes - absolutely. Just be aware of the risk reward ratio.

Golfer : You only refer to Moving averages and SMA angle? No more MACD histogram as philip said?[/quote]

For those who are struggling to understand price action (and believe me, I was one of them), I would recommend members to add the colour MACD to get a feel for the system. Just remember, indicators are lagging and more so on the 5min chart where there are lost of wipsaw (noise) in the market. I found that sometimes the colour MACD get you into a trade too late and you cannot get out at BE/small profit if the price turns againts you. That is why my significant levels are important to me. The recommendations are:

Buy on support (dips in an uptrend) and sell against resistance (rallies in down trend) (NOT THE OTHER WAY AROUND). Please make sure you do understand this concept. I'll try and post a few examples.

I would strongly recommend that the members study price action in order to understand the principles behind this system. Issues (as well as the meaning of each) such as:

Higher highs, lower highs, lower lows, higher lows, triangle formation, swing high/lows, trendlines, 123 formation, a few candle formations near key levels, support and resistance.

Those are just a few that I do find very usefull in this system.

I hope it helps
Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,245
  • Nov 14, 2010 7:54am Nov 14, 2010 7:54am
This system helped me a lot. I never considered 5M to use like this. I only use to see the good timing for an entry.

I have my own version though. After I carefully looked the system logic and observed, 50SMA may be useless. I could use 21EMA to measure the slope, and the logic was fitted perfectly.

I also think MACD is way too slow. I have adjusted the parameter but MACD is always slow. Another thing is that certain angles of the 21EMA slope have different entry points.

Simply, if the slope is acute, no need to wait till the price comes back to the war zone. I use 10EMA instead, not even wait the price to penetrate 10EMA. Works just fine by doing my modified version. I even trade when the 21EMA slope is 15 degrees. What do you think? Do you think there are potential dangers in my method?
  • #7,246
  • Nov 15, 2010 1:54pm Nov 15, 2010 1:54pm
Quoting dpg03
Who writes EA ?
Today is not traded.
Tired of earning $ hands.
I want to EA.
Who's with me?
Hi dpg03,
What happens with EA? Let`s make it.
Listen for your inside voice
  • #7,247
  • Nov 15, 2010 2:19pm Nov 15, 2010 2:19pm
Quoting zaboon
This system helped me a lot. I never considered 5M to use like this. I only use to see the good timing for an entry.

I have my own version though. After I carefully looked the system logic and observed, 50SMA may be useless. I could use 21EMA to measure the slope, and the logic was fitted perfectly.

I also think MACD is way too slow. I have adjusted the parameter but MACD is always slow. Another thing is that certain angles of the 21EMA slope have different entry points.

Simply, if the slope is acute, no need to wait till the price comes back...

Hi Z

See my comments in your message in blue:

This system helped me a lot.

Helped me a lot even though there are lots of noise on a 5min chart. Very frustrating.

I never considered 5M to use like this. I only use to see the good timing for an entry.

I have my own version though. After I carefully looked the system logic and observed, 50SMA may be useless.

I don't agree but hey, remember my saying - trade according to your own style and use what is working for you.

I could use 21EMA to measure the slope, and the logic was fitted perfectly.

Go for it if it is working for you! Not my style of trading.


I also think MACD is way too slow.

Now I totally agree with you. That is why I deleted my copy of the MACD from my charts. Other members will still disagree with us.

I have adjusted the parameter but MACD is always slow. Another thing is that certain angles of the 21EMA slope have different entry points.

Simply, if the slope is acute, no need to wait till the price comes back to the war zone.

Agree but very risk. You must understand price action to trade like that.

I use 10EMA instead, not even wait the price to penetrate 10EMA. Works just fine by doing my modified version.

Great - do what is working for you and what you feel comfortable with.

I even trade when the 21EMA slope is 15 degrees.

Once again - risky but it might work.

What do you think? Do you think there are potential dangers in my method?

Do some back testing using the strategy tester on mt4 or using the f12 key on your key board to get a feel and measure the outcome of your approach. The strategy tester is a great tool to use to paper trade and see the outcome of your approach in almost real time/live price feed.

Enjoy the trading
Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,248
  • Nov 15, 2010 9:53pm Nov 15, 2010 9:53pm
Hey Golfer,

I appreciate your comment. No need to agree on mine, but I agree that we do things differently. I have noticed that creating your own version is so important!

I just wanted to say that I am a fan of this method. I just use a bit differently by following my unique rules. The main idea of trend-follow trend is the most important thing though.

Thanks
  • #7,249
  • Nov 16, 2010 3:35am Nov 16, 2010 3:35am
Quoting zaboon
Hey Golfer,

I appreciate your comment. No need to agree on mine, but I agree that we do things differently. I have noticed that creating your own version is so important!

I just wanted to say that I am a fan of this method. I just use a bit differently by following my unique rules. The main idea of trend-follow trend is the most important thing though.

Thanks
Hi Z

Great - like I always say: "As long as it is working for you - go for it!"

I am in the academic environment and it is important for me to try things out. You won't survive if you do have "fixed" views on issues without giving it a try or at least give it a good analysis (just my view point/opinion about life).

Enjoy the trading
Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,250
  • Nov 21, 2010 1:19pm Nov 21, 2010 1:19pm
which pairs do you trade with this method ?

Thanks and GL
  • #7,251
  • Nov 21, 2010 1:32pm Nov 21, 2010 1:32pm
Quoting Rocky23
which pairs do you trade with this method ?

Thanks and GL
UsdJpy EurUsd GbpUsd

Hope it helps!!!!!
"speak softly, and carry a big stick" Teddy Roosevelt
  • #7,252
  • Nov 22, 2010 8:01am Nov 22, 2010 8:01am
Quoting Rocky23
which pairs do you trade with this method ?

Thanks and GL
EURUSD (EURO), GBPUSD (Cable), and EURJPY (EY)
Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,253
  • Nov 24, 2010 1:15pm Nov 24, 2010 1:15pm
Today's market rhythm show an small intra-day upward move. See how the price stayed above the small trendline (yellow dotted line) forming higher low upon higher low.

Then the 50MA came into line with Phillip's original rule (20degree upright - subjectively measure).

Then my own rules for this system - my significant level (pink line) meaning previous resistance becomes support, powerfull stuff for me. See the comments on the chart on how I use to trade Phillip's system nowadays.
Attached Image (click to enlarge)
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Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,254
  • Nov 24, 2010 1:26pm Nov 24, 2010 1:26pm
I entered this trade (small lot) just to show people that one cannot follow the rules/indicators blindly. Price action is important to understand this system and use it sucessfully.

In this chart all the rules of Phillip's system are in line for another long trade and I am sure many of you would have entered the trade where I did. But just look to the left of your chart (looking at past price action). See the evidence of serious resistance found by the price early today. My entry was even after a very nice engulfing candle. But if one looks at the 15min chart, there was a nasty tail upwards. One of my unwritten rules - don't trade against a nasty tail on the 15min or 1h chart e.g. if there is a nasty trail upwards (shouting star/evening star), I would be VERY careful not to enter a long trade on the 5min chart. The other way around for a tail to the downside.

It is suicide to enter long where I did - and I paid the price. One can avoid bad trades like this one by just looking for simple price actions.

I hope it helps somebody.
Attached Image (click to enlarge)
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Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,255
  • Nov 24, 2010 1:31pm Nov 24, 2010 1:31pm
How would I have traded this setup - very easy but it needs discipline and patience.

See comments on the chart

Please ignore the evidence of the previous (earlier) trade on this chart - the other 5min system I am trying to master (also a thread here on forex factory).
Attached Image (click to enlarge)
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Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,256
  • Nov 24, 2010 1:37pm Nov 24, 2010 1:37pm
The final outcome of today's chart - see how strong the resistance is, it is really madness to trade against such resistance.

Yes, there was 10 to 15pips in the last setup before the price decided to tunr to the downside.

I hope you people can see the nice short setups created after the price broke the 50MA and the 50MA turned downwards- I wasn't at my PC, so I didn't trade the setups.



Remember:

Buy on dips after support was found in a uptrend

Sell on rally after resistance was found in a downtrend
Attached Image (click to enlarge)
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Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,257
  • Nov 24, 2010 3:47pm Nov 24, 2010 3:47pm
Golfer man your posts are great. I don't trade phillips system per say but I've been following this thread mainly cause I trade the 5min EU very similar to you. Anyway thank you for your posts, have a good one.

Chris
  • #7,258
  • Nov 25, 2010 12:21pm Nov 25, 2010 12:21pm
Hey Golfer. I like the way you used the S/R line in the first picture, the pink line. Do you trade like this always? Does the highest/lowest point function as S/R lines always?

I watch some S/R lines, mainly pivot lines, but never thought of using like the way you did. This trade is on 5M, so I do not draw lines just because some candles got bounced.

My version of this system can detect this as well even when there is no significant line. I know when to fall or rise now

It is simple. Just when the price gets to the corner, either upper right or bottom right, check 1M chart. You can see what's coming!
  • #7,259
  • Nov 26, 2010 3:34am Nov 26, 2010 3:34am
Hi Z

Just to answer some of your questions/comments:

"I like the way you used the S/R line in the first picture, the pink line. Do you trade like this always?"

Yes, as from lately I tend to concentrate more on swing highs/lows indicating support/resistance found. Even on my 15min chart and the system I am trading using the 15min charts - support and resistance are key factors/criteria.

"Does the highest/lowest point function as S/R lines always?"

No, not always. But it gives me a feel for the market and shows me market rhythm. Just like anything else in forex trading: Nothing is for sure/100% preditable. Otherwise everybody would have been in this business.

"I watch some S/R lines, mainly pivot lines, but never thought of using like the way you did. This trade is on 5M, so I do not draw lines just because some candles got bounced."

Well, test drive some of the suggestions made by other members for yourself. If it doesn't work for you, ignore it. No need to be critical and shoot it down. If it is working for another member - good for him/her. It doesn't mean it will work for you as well. Just accept it and move on to try and find what is working for you.

"It is simple. Just when the price gets to the corner, either upper right or bottom right, check 1M chart. You can see what's coming!"

Just what I am talking about. I've tried 1m with relative good success but it is just not my style of trading anymore. Great for scalping though.

Pleasure and enjoy what is working for you in trading
Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,260
  • Nov 26, 2010 4:45am Nov 26, 2010 4:45am
Ah, the rhythm. I see THAT explains the beautiful result in this case. I see the rhythm in the picture, failed to see that.

The reason I do not draw S/R lines on 5M is that the view for it is just way too small. As you know, S/R lines are more powerful if you pick them on 1H or 4H, more reliable as well.

I check the move on 1M and use S/R lines for another confirmation. I like to see the live motion first before it hits S/R lines. The way it hits the line, sometimes I can tell if it bounces or penetrates. Although I do not rely on 1M too much because the price move is way too sensitive on 1M.

But yea, I was so impressed the way you handled that trading. That was exactly what happened as you have expected and predicted. Beauty!
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