Trend Catching System - Help and Modifications Required!

Hello Seniors and Juniors,

As title represents, I have a system (not developed by me), but still, i think it can be a best and consistent system because, upto 80% times, this system gives accurate signals and that is why, we call it a TREND CATCHING SYSTEM.

But guys, i need your help, team works and their spirit to make it work like a charm and with consistent!

Timeframe: 1h or higher to avoid false signals and to increase the accuracy.
Preferred Pairs: GBP/JPY, EUR/JPY or other Trending Pairs.

When to BUY:

1. When the BBANDS indicator turns BLUE
2. When the Blue moving averages cross and go upwards. The two thick blue moving averages need to be some distance from each other and not stuck together. This indicator that there is momentum in the UP move.
3. When the Blue Moving averages are above the WHITE CHANNEL
4. When the MACD histogram is ABOVE the ZERO line and also ABOVE the RED line.

When to SELL:

1. When the BBANDS indicator turns RED
2. When the Blue moving averages cross and go downwards. The two thick blue moving averages need to be some distance from each other and not stuck together. This indicator that there is momentum in the DOWN move.
3. When the Blue Moving averages are below the WHITE CHANNEL
4. When the MACD histogram is BELOW the ZERO line and also BELOW the RED line.



The problem is here:

When we enter in the trade, we will be in risk because TRADING means RISK, so, actually we don't know where to set our Take Profit and Stop-Loss so the biggest problem in this system is that, NO EXIT RULES! Sometimes, we could catch the highest movements, but sometimes, we lose because of highest negative movements.

Here is my story about EXIT RULES which i tried but failed:

- I tried signal to signal but still, the result is in NET LOSS.
- I tried with MACD with default settings but still failed!
- I tried 10 PIPS TP and 50 PIPS STOP-LOSS, but due to the system's nature, it works very few times and otherwise, break-even. I hope you understand what i mean here.


Suggestions by ME:

- We should try the TS (Trailing Stop) which i think that is the best solution, but my mind is not working about which settings would be correct.
- We can try with ZigZag indicator but the problem is that, zigzag repaints its signals.



Traders, I need your help on the exit rule so that, we can make profits consistently, and consistency is what we all are looking for, so if we developed the Exit Strategy, then believe me, we can make highest profits together.



(I ATTACHED THE TEMPLATE AND BBANDS.MQ4, PLEASE USE TEMPLATE FOR ACCURATE SETTINGS ON CHART)

The problem with "signal-to-signal" trading is that you wait for a lot of lagging indicators to line up in order to get a signal. This means you enter somewhat late and you would also exit somewhat late. This would only be OK for the nice, long trends. Alas, most of the movements you'll get do not qualify as such and the net result would be a loss.
Using a small, fixed TP is even worse - you don't even take advantage of the big movements, which are the premise of the system.
Using a trailing stop is somewhat better, but still not enough. Reason being, you'll get whipsawed a lot and you'll miss some of the big movements. Which, again, are the premise of the system so you can't afford to miss them.

For H1.. try using the weekly pivots R1/R2/S1/S2 as TP levels. See if it of any help. For stops, try using the lowest low of the past 5 or 6 candles.

Dear Barbossa,

Thank you for your contribution in my thread and for your feedback as well.

About Signal-to-Signal, yes, you are right.

But about the Fixed TP, you are little wrong because what i found after testing the 10 Pips Target is that, the result would be in Net Green Pips Profits but the ROI is too low. Almost 0.5% to 1% per month.

About Trailing Stop, i also think it can be a good choice but because of a lot of whipsaws (i mean, after analyzing the previous charts), i am too much confused where to set trailing stop.

The Trend Catching System works in trending market like a charm, but continuously failing in the choppy and ranging markets.

We need something special to exit with green pips with TC system. Please push your mind up and try to make a good exit rule so the result could be in net profit.

Lagging indicators... not a chance.

Dear jw1981,

Thank you for your helpful advise!

Would try the weekly pivots advise for TP. Lowest low of past 5-8 candles are already tested for stops but still it is not working. (May be i have some weakness, so please try to make exit rule with your own understandings by sitting in front of the chart, then if you found something special working properly, then please, please share with us. During this time, always update us with your present situation about Trend Catching System.

Check if the weekly R1/S1 levels are often hit with this method. If yes, then stick to the recent low or high. Then to filter out the noise.. put in an RR.. so anything 1:1 (or even 1:2) should not be traded. See if that makes any difference.

You can exit when MACD below average, total or partial.

For SL there are a couple of ways you can go. You can trying putting it a couple of pips above the highest high on a short (opposite on a long obviously). Or, you could use your BBands indicator and if it closes with a blue signal on a short or a red signal on a long, time to close the trade. Just a couple of ideas I use.

As for your TP question, you could go a couple of ways as well. You could stay in a long as long as the price is making higher highs and higher lows (and opposite for shorts). Or you can also us a MA and stay in a long until a candle closes below the MA (and of course opposite for short). This way works better on a trend that is well established though.

Hope some of this helps you out!

Dear Axiomafx,

Thank you for your contribution and for your helpful advise.

I will test it with my understandings and with my previous history on chart.