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Yet another moving average crossover system

  • #781
  • Nov 4, 2011 5:43am Nov 4, 2011 5:43am
Just bumped into this thread and plan to stay.

very interesting method. I thought of this before!

are the details on the first page updated?

Can't wait to setup my charts.

thanks lawgirl!
  • #782
  • Nov 4, 2011 5:51am Nov 4, 2011 5:51am
Quoting Chroniclez
Just bumped into this thread and plan to stay.

very interesting method. I thought of this before!

are the details on the first page updated?

Can't wait to setup my charts.

thanks lawgirl!
Yes, everything you need is on the first page...although the volatility of the market these days we are not strictly sticking with direction dictated by the 200 MA...more of what PA is doing and angles of the MAs.
  • #783
  • Nov 4, 2011 6:15am Nov 4, 2011 6:15am
Quoting lawgirl21
Yes, everything you need is on the first page...although the volatility of the market these days we are not strictly sticking with direction dictated by the 200 MA...more of what PA is doing and angles of the MAs.
Thanks for the speedy reply!
  • #784
  • Nov 4, 2011 6:27am Nov 4, 2011 6:27am
Markets moving too fast to post charts!
  • #785
  • Nov 4, 2011 7:14am Nov 4, 2011 7:14am
I didn't take my usual GBPUSD or EURUSD trades at London open this morning due to big news events.

Found it quite difficult to stay out of the market until after NFP since there did seem to be quite a few set ups. However, I'm glad i did!

This is my only trade of the day.....EURUSD (sorry I couldn't get my charts up earlier, was on the move when I traded).



Closed 70% of the trade at my initial TP for 31 pips profit.

The added a 20 pip trailing stop on the remaining 30% of the trade, which, thanks to a quick reversal, also stopped out for 31 pips profit.

Total increase in account balance: 2%

Anyway, a good result in terms of the trade, but even more of a success for me personally that I managed to stop myself pressing the trigger on any trades prior to the news and waiting for more reliable indication of the direction of PA.

Hope everyone has a great weekend.

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  • #786
  • Nov 4, 2011 7:26am Nov 4, 2011 7:26am
Quoting forexpippy
I didn't take my usual GBPUSD or EURUSD trades at London open this morning due to big news events.

Found it quite difficult to stay out of the market until after NFP since there did seem to be quite a few set ups. However, I'm glad i did!

This is my only trade of the day.....EURUSD (sorry I couldn't get my charts up earlier, was on the move when I traded).



Closed 70% of the trade at my initial TP for 31 pips profit.

The added a 20 pip trailing stop on the remaining 30% of the trade, which, thanks to a quick reversal, also stopped...
Good job! I was in and out of my three pairs after the news. Finally reached my weekly goal, which was short until today. Wild, but fun trading this week. You have a great weekend too!
  • #787
  • Nov 4, 2011 7:32am Nov 4, 2011 7:32am
Quoting lawgirl21
Good job! I was in and out of my three pairs after the news. Finally reached my weekly goal, which was short until today. Wild, but fun trading this week. You have a great weekend too!
That's great news! What a week though, will be nice when things start tending again!
  • #788
  • Nov 5, 2011 7:52am Nov 5, 2011 7:52am
This was in the first post:
(Note: If you are trading from a higher TF as an H4 chart, you would use the 200 EMA on that higher TF to determine direction.)

What does the 200 stand for? Minutes? Candles? For example in the H1 time frame if I use a moving average period of 15 does that mean 15 min or 15 hours?

Looks like you can use any number for this moving average but for the EA you can only use the timeframes of the charts, i.e. 1m, 5, 15m, 30m, 1h, 4h, 1wk, and 1m.

So if you are in the 1h chart your EA could get the averages for only those enumeration timeframes but you can drag a moving average onto the chart and use any number but why would this number be different on other TFs? or rather why would the trend line be different at 200 on the hourly chart as opposed to the weekly?
  • #789
  • Nov 5, 2011 2:02pm Nov 5, 2011 2:02pm
Hi vigilanti,

look at http://ta.mql4.com/indicators/trends/moving_average .
If for example you are in the H1 timeframe. Then the 200MA means the average value of the last 200 hours (candles).

see you and nice weekend
hila
  • #790
  • Nov 5, 2011 5:36pm Nov 5, 2011 5:36pm
Quoting Vigilanti
This was in the first post:
(Note: If you are trading from a higher TF as an H4 chart, you would use the 200 EMA on that higher TF to determine direction.)

What does the 200 stand for? Minutes? Candles? For example in the H1 time frame if I use a moving average period of 15 does that mean 15 min or 15 hours?

Looks like you can use any number for this moving average but for the EA you can only use the timeframes of the charts, i.e. 1m, 5, 15m, 30m, 1h, 4h, 1wk, and 1m.

So if you are in the 1h chart your EA could get the averages for only those...
Hope this helps:
What does the 200 stand for?
http://www.forexoma.com/how-to-use-m...forex-trading/

Trend lines are subjective to the person placing them on the chart. It signifies a rejection of price in either direction. Usually you look for multiple rejections to base your trendline on. Bouncing off or breaking through these lines can signify a trade opportunity.

There are equivalant moving averages for different time frames so you could use those equivalants and place them on one chart instead of jumping back and forth between chart time frames.

There is a separate thread for the EA for this method which LG started.

I think you are confusing chart timframes(the representation of a candlestick or bar for that particular time frame) with a moving average which represents price over a specific period.

With all said and done these are indicators and guides for buy and sell trading decisions but by no means always indicate absolute price direction at any given time.
  • #791
  • Nov 6, 2011 1:35pm Nov 6, 2011 1:35pm
That's an interesting system Lawgirl21 - with no bars/candles.

I'm not sure as what the rule may be for the entry - do we wait for a cross to be confirmed by waiting till the end of 1 hour period on hourly charts.

I didn't want to show any disrespect for the system by displaying the bars, only trying to make my question easier to understand.

For example last 2 signals on EURUSD hourly chart (both strong crosses): if we wait for the candle close in the first case it's around 50 pips from the SMMA and in the second case there is around 60 pips from the SMMA. The momentum may be strong, but after that sort of move I would usually expect some sort of retracement and it we were to place stops bellow SMMAs that may severely affect r/r?

Or is this wrong? Do we jump in straight away - in this example as soon as we see the strong cross on hourly, we check 15 minutely chart if there is a cross there and if yes we go for it.
Is there a danger for cross to be undone in the meantime if we try this approach?

Regards
DR
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  • #792
  • Nov 6, 2011 1:41pm Nov 6, 2011 1:41pm
Both have crosses on both M30 and M5
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  • #793
  • Nov 6, 2011 2:47pm Nov 6, 2011 2:47pm
Charts
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  • #794
  • Nov 6, 2011 6:42pm Nov 6, 2011 6:42pm
Quoting lehmann
Using 1H (just a little different approach)
Lehmann, thanks for your great testing, maybe I am slow, but I don't understand the exact rules you used for the 15m-1h tests.

Do you use 3/8 MA crossovers on the 1h TF or on the 15min TF (using the 1h TF as your main direction)?

Sorry for having to ask for clarification.

Thanks,
  • #795
  • Nov 6, 2011 10:56pm Nov 6, 2011 10:56pm
My first trade in this week.
Looks like other CAD pairs might follow.
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  • #796
  • Nov 7, 2011 12:38am Nov 7, 2011 12:38am
Not a true cross but break through previous support as indicated by arrow at MA. Will it break or bounce at 00?

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  • #797
  • Nov 7, 2011 1:30am Nov 7, 2011 1:30am
Quoting demoreal
I'm not sure as what the rule may be for the entry - do we wait for a cross to be confirmed by waiting till the end of 1 hour period on hourly charts.

Or is this wrong? Do we jump in straight away - in this example as soon as we see the strong cross on hourly, we check 15 minutely chart if there is a cross there and if yes we go for it.
Is there a danger for cross to be undone in the meantime if we try this approach?
Any idea?

Anybody?
  • #798
  • Edited 4:00am Nov 7, 2011 2:31am | Edited 4:00am
Hi DR,

Strictly speaking, you should wait for the close of the period for confirmation that a cross has occurred, particularly in respect of the higher TFs. As you correctly pointed out, it's entirely possible for a cross to occur in the middle of a period and then reverse.

You are also correct that confirmation of the MA cross might occur at the end of a large move, leading to a frustrating retrace just after you have entered the market.

Unfortunately, there is no way around this issue, especially on the higher TFs. The MAs show PA, and are great for indicating where there is (or indeed, just has been) a lot of momentum in one direction. However, such momentum is often followed by a pause or retrace in PA.

We're not aiming for a 100% strike rate here, just playing the odds that a strong cross of the MAs will more often than not carry sufficient momentum to bag us some pips.

This is where checking for confirmation on the lower TF is useful. Once you spot a cross on the H1, drop down to the M15. What are the MAs doing on the M15? Are they still indicating a strong move in the original direction of the H1 cross, or are they wavering slightly?

On the higher TFs (H1 and above), it's entirely possible that you could miss the majority of the move by the time you get a confirmed MA cross. Based on the method as described in the first post, you may have assumed that you would have a positive expectancy by trading all confirmed crosses. My own personal opinion is that's not correct.

Stick to a limited number of pairs to begin with and watch them closely. Become familiar with what makes them move, how big those moves are, how big the retracements are and when they occur (for example, market opens, news events, days of the week etc). Get a feel for what those "good" crosses look like and what the lower TF confirmations look like.

I know that this is not what most people want to hear (i.e. that you can't just trade an MA cross and become a millionaire), but it's not that simple. The more familiar you are with the pair, the more you will benefit from the MA crosses in my opinion.

The other dimension is in respect of where your stop loss orders and profit targets are. Generally, the higher the TF, the bigger the stop needs to be (and therefore the higher your profit target). So, with that in mind, you could try trading the M30/M5 until you get a feel for how the crosses work since by fine tuning your entry on the M5, your stops can be very tight indeed (I rarely use a SL bigger than 15 pips when trading the M30/M5). This way, if you have missed the move and you get stopped out, your loss is much less, and your profit target can also be smaller. That said, there are more whipsaws on the smaller TFs! That's this style of trading for you though, it's all about finding that balance between good confirmation and not getting in so late that you've missed the party.

Personally, I would stick to M30/M5 for a while, the markets are a bit wild at the moment and the "safer" pips seem to be on the lower TFs with smaller profit targets. Once the markets start trending more heavily, the higher TFs will be a more attractive option.




Quoting demoreal
That's an interesting system Lawgirl21 - with no bars/candles.

I'm not sure as what the rule may be for the entry - do we wait for a cross to be confirmed by waiting till the end of 1 hour period on hourly charts.

I didn't want to show any disrespect for the system by displaying the bars, only trying to make my question easier to understand.

For example last 2 signals on EURUSD hourly chart (both strong crosses): if we wait for the candle close in the first case it's around 50 pips from the SMMA and in the second case there is around 60 pips...
  • #799
  • Nov 7, 2011 3:42am Nov 7, 2011 3:42am
Quoting forexpippy
Hi DR,

Strictly speaking, you should wait for the close of the period for confirmation that a cross has occurred, particularly in respect of the higher TFs. As you correctly pointed out, it's entirely possible for a cross to occur in the middle of a period and then reverse.

You are also correct that confirmation of the MA cross might occur at the end of a large move, leading to a frustrating retrace just after you have entered the market.

Unfortunately, there is no way around this issue, especially on the higher TFs. The MAs show PA, and are...
Thank you Forexpippy.

This is an excellent explanation.

Best wishes
DR
  • #800
  • Nov 7, 2011 5:32am Nov 7, 2011 5:32am
Quoting demoreal
Thank you Forexpippy.

This is an excellent explanation.

Best wishes
DR
Ditto that...excellent..and sums up everything very nicely.
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