This strategy was initially posted by end route. it is in some shape/form similar to nanningbob's "pa returning to median strategy". ADX as a filter was recommended by tread.
i have done extensive backtesting.
Everytime the 5ema crosses up through the 13ema, buy on the next bar. sell when they cross again. On the backtesting, there is profit +80% of the time.
Everytime it crosses down, through the 13ema, sell, and buy back when they cross again. on backtesting there is profit +80% of the time.
Wins are typically much, much bigger than...
Ignored
YOU FOUND THE HOLY GRAIL!!
Whats your stop loss that u set for the test? Can you provide result in more details?
for backtesting reasons....does the cross repaint?
on a 4h chart. if the previous bar closed with the 5ema crossing up through the 13 ema. if on the next bar the price plummets, will the cross that occurred uncross?
for backtesting reasons....does the cross repaint?
on a 4h chart. if the previous bar closed with the 5ema crossing up through the 13 ema. if on the next bar the price plummets, will the cross that occurred uncross?
Ignored
Very easy to find out. Open your strat tester install one of the sample ea's
put your indicators on put it in visual mode and away you go
I got an ea that I think would work with this. It's actually 2 separate ea's. It will buy or sell and close trades at the end of the 4h bar if a cross occurs. You can also set a stop loss just to cover your self.
I'm sure there are programmers who could write a more efficient ea but mine works if you are interested.
Just so you know...I was actually using the 5 ema and 12 ema cross on the 1h timeframe. It was not as successful as I had hoped. But...this 4h idea you have sounds like it may be better.
I was finally able to find a currency that would struggle at times with what i'm describing.
that is the EURAUD. i remember nanningbob talked about how it is the most trending of all currencies and very tough on any "pa returning to median" methodology.
your EA, does it know only to buy the direction of the median?
so on a 4h chart, if PA is above the top green line, and the 5ema crosses UP and through the 13ema near or around the top green line, we do NOT buy just because the 5ema is crossing up (we also do NOT sell, we just do nothing). the cross of the 5ema through the 13ema has to be INTO the direction of the median PLUS around the top green line or above.
and also, you can use adx as a filter.
another extremely important point, is do not set a tp. you must wait for the next ema cross. on a lot of backtesting, sometimes you can stay in trades for days and days finally netting a couple hundred pips.
the biggest difference between this method and nanningbob's is nanningbob takes small wins and tries to recover the rest, which leads to huge drawdowns on bad months, like September, for example on the eurusd. you would have recovered and recovered like crazy.
endroutes method would have kept you out of trading that whole time. there was a time the eurusd finally retraced towards the median in september, the 5ema and 13 ema cross would have put you into that trade on that retrace. and it would have kicked you back out from trading when it started trending again.
the only difference in what i am doing and endroute is:
-everything must be on 4h.
-don't just buy or sell the ema cross when it is above/below the cog green lines, only take the trades when the 5ema crosses through the 13ema into the direction of the median, and only when this cross is somewhere near the green line. and also, if the adx agrees fully with your trade, it's going to be a winning trade.
-Do NOT set stop losses. that is also critical. and don't watch the screen once the trade is placed. because Unless you drill down the adx to 5m, 15m,30m,1h and try to time your entry to make sure you are entering at a good time, the moment you enter the trade, the chance of you seeing it move 50 pips in your favour or 50 pips against you initially....is basically unknown, or 50/50, or anybody's guess really.
-Exit at next ema cross.
you see a lot of ppl complain that this type of system works for a while, and then it fails for them.
a traders skill is very important for this type of system.
profits must ride and losses are cut short. this will occur automatically with the ebbing of the crosses.
this system will fail for you if you take profit from itchy fingers at +100 when the trade goes on to see +300. and then you set stop losses, or even worst, you let losses run.
if you can win, only half your trades, or even 40% of your trades, you will make a lot of money.
if you try to use discretionary tp and sl, you could tecnically have increased win rate, but diminished gains, or even negative gains.
Intersting, I use 5 and 10 ema cross on my charts but I think 5 and 13 (both fibs!) may have some promise. I will do my own testing and report back in good time.
Now if your talking any cross, before candle close, you may wanna draw the lines....
Not too shabby on lower TF either, throw in another ADX taking advantage of MTF option
for backtesting reasons....does the cross repaint?
on a 4h chart. if the previous bar closed with the 5ema crossing up through the 13 ema. if on the next bar the price plummets, will the cross that occurred uncross?
Ignored
yes i have seen this with my own eyes
cross can uncross
funny thing is it can uncross more than 2 times depending on time frame
Hi, Chiba san, can you please,post charts? what ADX number you use, 14 or 8? what horizontal lines of ADX for trend strenth indication do you use? 25, 30 and 50? Is it possible to use this strategy without cog? What is cog and where to find it and why do we need this indicator? Thank you,
