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4H Crossover (Swing Trading)

  • #61
  • Nov 15, 2010 3:26pm Nov 15, 2010 3:26pm
Hi, SburtonHome

First thanks for your prior answer,
Second I confirm my utter interest with your thread that is your setup, trading plan and MM,
and finally my new question : under which circonstances do you issue a "Pending order ... if I can ask.

TIA

Best regards

BBF
BigBlackfeet Always on the(forex) war path !
  • #62
  • Nov 15, 2010 3:57pm Nov 15, 2010 3:57pm
Quoting BLACKFEET
First thanks for your prior answer,
Second I confirm my utter interest with your thread that is your setup, trading plan and MM,
and finally my new question : under which circonstances do you issue a "Pending order ... if I can ask.
Blackfeet, I welcome and appreciate your insights. When you say pending order, I assume you mean when I write "Pending" on my trade log spreadsheet. I simply write "Pending" to remind myself to be watching for an entry on that pair. I do this when I have a new 21/89 cross. It does not mean that I actually place a pending order on that pair. It is just something I do personally to help myself track potential trades.
  • #63
  • Nov 15, 2010 4:06pm Nov 15, 2010 4:06pm
A quick update for those of you waiting on my continued backtest results. Because I blind, hand backtest, each and every trade - and because I work full-time, it is taking quite a bit of time. I have, however, finished the EURUSD from 2007-Present. Attached are the results.

A couple notes:

I am now doing all backtrades at 2% risk because that is what I am trading live.

Remember that this is just one pair of 10 and so the max drawdown is really not representative of what the system will do since the theory is that other winning pairs will smooth that number out. Either way, Max drawdown was 7% at 2% risk (3.5% at 1% risk) and occurred over a 6 month period from Jan 2008 - Jun 2008. Other than that there were no other periods that saw drawdown of more than 4%.

I hope to have another couple of pairs completed by the end of the month and all 10 completed before my real money trading begins in Jan 2011.

Attached File(s)
File Type: pdf 4 year EURUSD backtest results.pdf   254 KB | 675 downloads
  • #64
  • Nov 16, 2010 6:08pm Nov 16, 2010 6:08pm
Quoting sburtonhome
A quick update for those of you waiting on my continued backtest results. Because I blind, hand backtest, each and every trade - and because I work full-time, it is taking quite a bit of time. I have, however, finished the EURUSD from 2007-Present. Attached are the results.

A couple notes:

I am now doing all backtrades at 2% risk because that is what I am trading live.

[indent]Remember that this is just one pair of 10 and so the max drawdown is really not representative of what the system will do since the theory is that other...

Thank you very much for showing us all your hard work, very much apreciated.

Marshy
“A setback is a setup for a comeback.”
  • #65
  • Nov 18, 2010 9:52am Nov 18, 2010 9:52am
Quoting marshy
Thank you very much for showing us all your hard work, very much apreciated.
Thank YOU Marshy. Any input, ideas, comments are welcome.
  • #66
  • Nov 18, 2010 10:09am Nov 18, 2010 10:09am
As I continue to backtest the system, the importance of using a basket of currencies is becoming more evident (as I expected from the beginning). Once I complete the 4 year backtest and before I begin working on the 5 year, I will post here the results showing in more detail the benefits of the basket.

In short, trading the basket, despite the currency correlations, makes for far smoother drawdown/profit results. Certain pairs have losing years and others winning years. Trading the mix means we are always in both the trending (ie winning) pairs and the ranging (ie losing) ones. However, because the winning trades net far more than the losing trades, the system is profitable.
  • #67
  • Nov 23, 2010 2:09pm Nov 23, 2010 2:09pm
Quoting marshy
Thank you very much for showing us all your hard work, very much apreciated.

Marshy
You too Marshy. Any comments or suggestions are welcome. I continue to trade and have had a pretty good couple of weeks.
  • #68
  • Edited 9:47pm Nov 23, 2010 9:46pm | Edited 9:47pm
..i am newbie in this forum.but i m in fx almost 1.5 years as a part time hobby.

firstly i found your macd is accurate compare to moving average. but i confused to indentify the trend from your macd(TC).

can you help me?
  • #69
  • Nov 25, 2010 4:00pm Nov 25, 2010 4:00pm
Quoting far
..i am newbie in this forum.but i m in fx almost 1.5 years as a part time hobby.

firstly i found your macd is accurate compare to moving average. but i confused to indentify the trend from your macd(TC).

can you help me?
Sure. It is very simple to use. Red means short, green means long. Now I use the change from red-green (or green-red) only as my entry signal after a return to the 21 and following a 21/89 cross.

Note: The MACD custom indicator I use is not mine. It is the custom MACD indicator used in Philip Nel's MACD 4 hour system.
  • #70
  • Edited 7:46pm Nov 25, 2010 4:27pm | Edited 7:46pm
I was asked a question earlier as to why I place "pending" on my trade log. Others of you were confused with what an entry setup looks like before it happens. Here is a perfect example (see attached image of my current GBPJPY chart):

Chart Legend:
Green Line - 21 EMA
Orange Line - 89 SMA
(Note: I also chart a 365 SMA and 200 SMA to give me a feel for the longer term trend. There is really no reason to look at them on the 4H chart since they have little bearing. They are, however, very respected on the D1. I typically look at the D1 before entering just to see if I am up against something that will make it unlikely that the trade will win. The 365 SMA and 200 SMA levels are two of those "somethings".)

1) Our long trade taken on Nov 1, 2010 took profit on November 10th. Since that point we had been waiting for a new cross (this time short) of the 21 down over the 89. The cross, after price reached a high of 134.18 took place yesterday (11/24/2010).

2) Once a fresh cross of the 21/89 occurred, I wrote "Pending" in my trade log next to the currency (in this case the GBPJPY) because I am now looking for a short entry.

3) Price yesterday dropped to a low of 131.81.

4) Today, price climbed back up to the 21 and is consolidating just below the 21.

5) MACD is currently green. If, and when, price continues short, the MACD will turn red and I will enter on the 1st closed candle with a red MACD bar.

6) If price continues to climb a short entry becomes less likely. Remember, I do not enter unless the close of the entry candle is below the 21.

7) If I enter, my stop-loss will be 8 pips above the high of the previous substantial move (134.18) and take-profit equal to the distance between the entry price and the SL.
Attached Image (click to enlarge)
Click to Enlarge Name: gbpjpy chart 11.25.2010.gif Size: 66 KB
  • #71
  • Nov 25, 2010 5:34pm Nov 25, 2010 5:34pm
Quoting sburtonhome
I had a question early as to why I place "pending" on my trade log. Others of you were confused with what an entry setup looks like before it happens. Here is a perfect example (see attached image of my current GBPJPY chart):

Chart Legend:
Green Line - 21 EMA
Orange Line - 89 SMA
(Note: I also chart a 365 SMA and 200 SMA to give me a feel for the longer term trend. There is really no reason to look at them on the 4H chart since they have little bearing. They are, however, very respected on the D1. I typically look at the D1 before entering...
Hey Friend, The last cross occured at 132.24. Can we short it at 132.24??
Thanks in advance for your guidance.
  • #72
  • Nov 25, 2010 7:45pm Nov 25, 2010 7:45pm
Quoting behman8850
Hey Friend, The last cross occured at 132.24. Can we short it at 132.24??
Thanks in advance for your guidance.
The cross is just a signal to begin looking for a trade in the direction of the cross. We then use an MACD signal to enter in that new direction.

So in the case of this GBPJPY trade the cross occurred at 132.24 (132.27 with my broker). That signaled a "pending" trade meaning we are now on alert to enter short once the following happens:

2. Price drops and then retraces (usually back to the 21 or 89) with MACD turning green.
3. Enter on 1st closed 4H candle after MACD turns back to red.
4. Short Entry Rules:

a. Price of the closed 4H entry candle must be less than the 21 EMA. If not, wait for next MACD short entry signal (price drops, retraces changing MACD from red to green and then drops again changing MACD to red thus signaling a short entry).
b. 21 EMA must be less than 89 SMA.
c. Only one trade per 21/89 cross.

5. Short entry Stop-Loss is placed 4-10 pips (depending on pair) above the high of the previous substantial move (best found by using a daily chart). Attached is a graph showing what I mean by “substantial move.” This stop-loss is generally between 200-400 pips depending on the pair.
6. Short entry Take-Profit is placed at a distance equal to the number of pips as the stop-loss (example: 200 pip SL = 200 pip TP). Once TP has been triggered, no new entry until 21/89 long cross.

In the case of the GBPJPY trade from post #70, step 2 has ALREADY occurred and now we are only waiting for MACD to turn back red and that candle to close.

FYI. I still plan on creating a video to explain this better as well as to show how these rules really help to avoid the whipsaw losses so common in many trend chasing systems.
  • #73
  • Nov 25, 2010 9:11pm Nov 25, 2010 9:11pm
video would be a great help. thanks
  • #74
  • Nov 26, 2010 7:20am Nov 26, 2010 7:20am
Quoting sburtonhome
The cross is just a signal to begin looking for a trade in the direction of the cross. We then use an MACD signal to enter in that new direction.

So in the case of this GBPJPY trade the cross occurred at 132.24 (132.27 with my broker). That signaled a "pending" trade meaning we are now on alert to enter short once the following happens:[indent][i][font=&quot][size=3]2....
Hi

I have been looking for a long term trading strategy, just like this, and I must say I very much like what I see.

I am following this thread closely as I like your trading method - very simple straightforward mechanical trading rules with methodical back testing.

I noticed you’ve entered the above trade, and the EURJPY, I have also.


Kind Regards
Marshy
“A setback is a setup for a comeback.”
  • #75
  • Nov 26, 2010 7:48am Nov 26, 2010 7:48am
Quoting sburtonhome
The cross is just a signal to begin looking for a trade in the direction of the cross. We then use an MACD signal to enter in that new direction.

So in the case of this GBPJPY trade the cross occurred at 132.24 (132.27 with my broker). That signaled a "pending" trade meaning we are now on alert to enter short once the following happens:[indent][i][font=&quot][size=3]2....
Thanks buddy for your guidance. Is your time same as mine?? I am in houston, tx cst!! So now at 131.07 this morning we will have to wait for it to go back to 132.24?? to short again? when can we go long?? MACD is red for two times!!
  • #76
  • Nov 26, 2010 10:24am Nov 26, 2010 10:24am
Quoting marshy
Hi

I have been looking for a long term trading strategy, just like this, and I must say I very much like what I see.

I am following this thread closely as I like your trading method - very simple straightforward mechanical trading rules with methodical back testing.

I noticed you’ve entered the above trade, and the EURJPY, I have also.


Kind Regards
Marshy
Yeah, I am in both. I am less confident of the EURJPY since that blasted thing has been in a tight range for almost 3 months. The good news there, and the reason I entered, is that a long-term trend-line was recently tested and rejected. On top of that, strong support around the 111.00 level that has held for weeks seems to be breaking. So here's to hoping!

I am also in AUDUSD, USDJPY, and GBPCHF. It is likely that the GBPCHF trade will end in 3 hours (resulting in a small loss) since a fresh 21/89 cross is imminent. The other two, however, appear bound for TP.
  • #77
  • Nov 26, 2010 10:27am Nov 26, 2010 10:27am
Quoting behman8850
Thanks buddy for your guidance. Is your time same as mine?? I am in houston, tx cst!! So now at 131.07 this morning we will have to wait for it to go back to 132.24?? to short again? when can we go long?? MACD is red for two times!!
I am EST. My current chart time is 17:25 (11:25AM EST) or 6 hours ahead of my local time.

As for your questions about the trade. I think you are a little confused with the entry rules. I would recommend re-reading the 1st post as that might help in answering your question. I will put a video together soon (probably today) explaining the system in greater detail.
  • #78
  • Nov 26, 2010 12:01pm Nov 26, 2010 12:01pm
Quoting sburtonhome
I am EST. My current chart time is 17:25 (11:25AM EST) or 6 hours ahead of my local time.

As for your questions about the trade. I think you are a little confused with the entry rules. I would recommend re-reading the 1st post as that might help in answering your question. I will put a video together soon (probably today) explaining the system in greater detail.
Thanks Looking forward to your video lessons here!
  • #79
  • Nov 26, 2010 12:18pm Nov 26, 2010 12:18pm
Quoting sburtonhome
Sure. It is very simple to use. Red means short, green means long. Now I use the change from red-green (or green-red) only as my entry signal after a return to the 21 and following a 21/89 cross.

Note: The MACD custom indicator I use is not mine. It is the custom MACD indicator used in Philip Nel's MACD 4 hour system.
i am still studying you tecnique..i am very happy of your system. But
what is your suggestion to me if i want to get safely trading in high impact news by using 4hcrossing..?

thank you.
  • #80
  • Nov 30, 2010 5:21am Nov 30, 2010 5:21am
Quoting sburtonhome
I forgot to share in my initial post the spreadsheet I use to calculate TP, lot size, balance, and track my trades. It is an online google spreadsheet. Feel free to use the template for your own trading if you would like. To do so:

1) Go to the Google template I made by clicking here.

2) Go to file and choose "Make a copy"

3) Save the new file as your own.

I also have an offline excel version if any of you are interested....
Hi

Could you please send me the offline excel version:

Thank you
Marshy.
“A setback is a setup for a comeback.”
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