A "new" simple system based on MA

Hello all

This is yesterday trade (close). I enter with 70 pips of SL and close with 200 TP. R/R almost 3.



I start to use stoch again.

Regards, Dragon

Simple yet effective system

Hi Dragon ! I think it is a good decision to use Sto again. Dont try to complicate the system. I mean Sto is really helpful to confirm the timing of entry. Of course we have the EMAs and the candles, but Sto is a tool that indicates you the timing is good. And a good timing allows us to enter the market with a tight SL and get a HPSU (High Probability Set Up) trade so we can get a high R/R which is really important for Money Management.

TY Rockrobb...the more simple is the system the more effective it is ! That's a solid rule ! Dont forget to rate it...

Hello everybody. Today I will add this post because I think it is important now to explain again the philosophy of the system and why it should be very profitable for everyone. First, I would like to focus on the fact that the most important thing in day tranding is the psychology. The fact that with the same system some people are very profitable and others are not sounds like an evidence, doesnt it ? So the first thing you have to do as a trader is to focus on the process ! What does it mean ? It means that you have to be strongly disciplined and focus only on A+ trades. The system presented here is profitable for me and for many people of mine (some of my friends, my brother, and other people I dont personaly know but who told me) because they all believe in the system and they strictly respect the rules edicted (look at the pfirst post). So what are the 10 rules to follow ?

- The 1st is to trade only with the trend : I mean if the trend is up you buy and if the trend is down you short

- The 2nd one is to focus on A+ trades : I mean that overtrading is really dangerous. You will be profitable if you know what trades are really worth it. It is a real mistake to take all signals. Take only those that offer you a good R/R ratio.

- The 3rd is to check the trend on higher TF : if you have an uptrend on the 5 mn chart, but a strong down trend on the 15mn or 1h TF, you know that it is risky. You are in a corrective wave and the profit should be low. Of course the trend can change but in 80% of cases the trend will continue that's why we say the trend is your friend ! Trend will change once time but it will continue many times (look at Eliott waves theory or Dow theory)

- The 4th is to accept that you can lose money. No system has a 100% rate of wins ! If you dont accept to lose, you will never earn money ! Trading is all about probability : your job is to accept the risk beacuase nobody know where the market will go, and it is to minimize this risk. If you master this philosophy I am sure you will be profitable. To minimize the risk correctly you have to focus on A+ trades (look at 2nd rule). Of course you will miss opportunities, but on the long term you will be able to maximize your profits.

- The 5th is to trade like a robot not like a human. To be human is your worst ennemy because acting as a « normal » human will lead you to trade with your emotions. A robot has no emotions. Of course it is impossible to trade without any emotions, but you have to learn to master them ! When you feel that emotions guide you, please take a long breath, and try to analyze why you took your trade. If all conditions were met, that’s a good trade even if you loose money because you focused on the process and your stop is here to protect you against the market. If conditions are not met, the nit is a bad trade because you try to enter the market agains you trading plan and even if you win money it is a bad trade !

- The 6th rule : Adapt your position size !!! If the market is strongly bullish and that you get an opportunity to enter long with a tight stop loss so that you have a high potential R/R ratio, then you have to take a maximum of risk ! I mean you have to take a big size position. And the way to do that is to re-enter at a new pullback to pyramid your initial position. If you are in a corrective market then you have to take a little size position. For example you are at a resistance point in H1in a bullish market and you see a divergence on your indicators and a shooting star candle whereas you have a down trend on 5mn still started, then you can look at a good entry but as it is a corrective market, you reduce your standard size (divided per 2).

- The 7th rule : Never average down a losing trade ! It is a stupid mistake ! Why ? Because it is completly illogic : you have a stop loss which is here to protect you against the market if you are wrong. So average down a losing trade is the same that making a minor error a big one ! Every serious people will teach from their errors and will try to avoid to repeat it of course. If you average down a losing trade you continue to be wrong !

- The 8th rule : Try to specialize you on 5 or 6 pairs ! Doing so you will be an expert and you will increase your winning trades. Personnally I recommend you to avoid exotic pairs because of volatility and less liquidity. I focus on GBP/USD, GBP/JPY, EUR/USD, EUR/JPY, AUD/USD, USD/CAD. This way I trade on major currencies which are USD, EUR, JPY.

- The 9th rule : Keep It Stupid and Simple (KISS) ! People often want to optimize the system adding new indicators : that’s bullshit ! Use only indicators that you really master ! The most important in trading is price and time. All indicators are just a visual representation or a derivative of price action. I see many systems with complicated indicators which are almost derivative of well-known indicators. Many gurus want you to believe that they found the graal. Think about Belkhayate system for example (center of gravity), even well know forexfactory systems are based on « proper indicators »…I will not tell you what are these systems that’s not my goal ! What I want you to remember is that you must use « simple » indicators that you correctly master, to help you to confirm the price action. That’s why I say that you can use the indicator of your choice. I use GMMA because I think it is a good visual tool allowing you to see the difference between the fast market (speculators) and the investors. If investors and speculators are on the same side, that’s a good market to trade. I also use DMI or MACD to identify the trend and to confirm the EMAs. MACD is specially interesting because of divergences. Timing is very important and to get in the market, I wait for a pullback and confirm with an oscillator. My prefer one is the Stochastics. My brother prefer to use the RSI. Other people can use CCI or whatever you want

- The 10th rule : Dont search for another new system anymore ! Try to master this system, practice a lot to improve your skills. Looking for another system is wasting time. And it is a serious alert that you are not serious enough to be a trader ! Why ? Because it is an evidence that you are looking for the graal which is something very dangereous and which will lead you to lose all your money. And we all know that te first step to earn money is to avoid to lose your capital. Of course there will be losing trades but please be serious and treat trading like a business not like a game ! If you want to play then go to Vegas ! This system is a large part of your trading plan that you always must respect. It sounds like something easy but believe me : it is very difficult ! Very famous traders lost their money before winning millions ! Have a look at the story of Martin Schwarz.

Ok that’s all ! Never forget these rules, respect the system like a robot, dont waste your time and trade like a pro. Even if you are a newbie, you will be a profitable trader very soon ! If you dont believe me you will continue to lose your money and waste your time looking for something that does not exist : the graal !

Hello, Hmaoui!

I must say I agree with every single word that you've written. People usually don't believe in simplicity in this business. They are trying some system and after a few losses give it up and jump to another one - and everything repeats again and again. But, in fact, instead of looking for something that doesn't exist, we just have to master one thing and that's it.
Of course, your method is not the only way to make money in trading, but I'm pretty sure it's one of the best and easiest, and it's really powerful, because it works on any pairs, timeframes and markets (not only Forex) and provides a great risk/reward ratio which is the most important part of money management. Personally, I use the same principles in trading but without any indicators except MAs and a few candlestick (PA) patterns. Just like you, I believe simple is the best in trading.

Want to say thank you for all your efforts here! In fact, your thread is one of the very few here, on FF, that gives a truly useful information. I hope newbies will realize that before they spend endless amount of time looking for nonexisent.


Best regards,
Artem

Thank you for your wisdom Hmaou.
An indicator such as DMI, having an alert. May be useful...
Aroon up down

Hi everyone!
long time I did not write, that's it from me today my entrance.
Maybe I'm late with 3-4 minutes but I waited 5 min bar to close.
Many of the rules that says Hmaоui I have met in many places and does not prevent the reminder from time to time! 10Х

here Friday entry
I hurried, but it's my fault why I waited for the right signal with Stoc
Here is one of my idea a long time ago for using RSI ! + 50 buy / - 50 Sell and waiting to cross the fast and slow. I chose long intervals
such as 3, 5, 15 - 5 min

TY Artem for your answer ! You are completely right : my system is not the only way to earn money and that's why I always talk about "the philosophy" of the system and that the most important to become successful is the psychology. That's the only way to easily earn money : simplicity !

Hi Vnp ! TY for sharing your indicator. I dont use MT4 but maybe it would be useful for other traders. Anyway many thanks for your contribution !

RSI is a good tool if you master it. It is one of my prefered oscillator with Stochastics. RSI can give you the trend with the 50 level : >50 long and <50 short. But to use it as a trend indicator you have to take a long period such as 21 or 34 for example. And to get the timing, take a short period such as 5 or 9 for example. I know that my brother use a 21RSI to get the trend and a 5RSI to get the timing....he has very good results too !

Just an example to illustrate my purpose about the choice of the indicator. You can compare the MACD and the DMI : it tells you the same thing. You only have to master your indicator to really know how to interpret it ! That's all.

And now have a look at the screen of my bro ! It tells you the same thing ! The stuff with this RSI screen is that you get the same tool to tell you the trend and the timing. So you have only one indicator which is even more simple because you only have to master it, no one else.

hi hmaoui,

how is your falafel eating - haven't eaten since a long time, have to go once...mmmhhh
I am trading the guppy method too, but i add to my chart the longterm guppy from the higher timeframe to see the main trend.
Example, M15 chart plus the 30 and 60 EMA from H1 and H4. H1 you have to muliple the 30 with 4 (15minutes x 4 = 60 minutes, dito H4 = 4xH1 = 4x4xM15).
So you have with a 120 and 240 EMA the longterm from H1 and 480 and 960 from H4, or you use a multitimeframe moving average. the good things is, that from the lower timeframe the longtermguppy is the most time the shorttermguppy from the higher timeframe
Example, M15 chart, the longtermguppy (30-60 EMA) is divided through 4 the frontier of the shorttermguppy of the H1. 30/4=8.5 and60/4=15. EMA15 is the last EMA from the shorttermguppy in H1.

The good thing wiht this 4EMAs or more is, that you see, what is going on in the higher timeframe and perhaps the main road like daily, because the H4 30/60 EMA is more or less 30/6=5 and 60/6=10 (6 times H4 is 1 day) are 5 days(1week) and 10 days(2weeks),so for me
H4 longtermguppy is the longterm/daily trend, the autobahn/highway
H1 LTguppy is the middleday(last 1-2,5 day)trend, the more important longtermtrend, when you trade the M15 or M5
M15 LTguppy the trend or triggersetup and M5 the triggertrend with M15 and H1 LTguppy as a maintrenddirection.

so wait, till your guppy are in line with an upper/higher timeframe LTguppy, then the rule hmaoui gave you - the most important and relax, when sstoch, cci, or rsi >/<50 and nice reversecandle include at SR(pivot, 00/50, sr)

Summa ,what i trade long: Guppy in line(ST>LT guppy,seperate) > LTguppy higher timeframe, waiting for pullback with (stoch(5,3,3)<50), reversalcandle, stop=IR under the entrycandle or the last pivotswing from the pullback, best at good SR the pullback

Hope, it helps somebody to make it easy and have a feeling with the guppy lines, what is going on in the higher trimeframes and in what situation you are(countertrend, against the main/dailytrend H4, with the highway H4 or just get into the highway, far away from highway->bubble->have to expect a stronger pullback etc.)
And if the trend is fresh/new(running into the autobahn), let a part run with a higher timeframe line as stop level

Here is another trade of this afternoon on the GBP/USD. We broke a support on higher TF (1h) and we had a pullback around 7:00 GMT. As I was on the GBP/JPY I just put an alert so I was checking the cable. This afternoon we had a pullback with all rules ok for a safe trade. Look at the charts for more explanations.

Hi opips ! My falafel are always good coz I love it loool !

About your post : it is an excellent remark and it allows you to get the whole thing on one chart. The only inconvenient I can see is that too much information on the same chart could be something not very easy. But that's ok on the philosophy. Please add a chart so we can have a look and a clearer explanation especially for the new followers.

Also dont forget to rate the system if you use it. After many months I would like to know if people are profitable or not yet and if I need to give more information about psychology and trading behaviors. Because I think it is the essential key to be a winner ! I never insist too much on this point in my trading online courses !!!

here's an example that I traded today with stochastics and divergence
part is closed and the rest is a bonus for me

maybe they all say the same thing. what price do
I'm still studying price movement and this strategy helps me best!
I like the trend that she shows me and I move with it
Greetings hmaoui

Hi Tantra ! Please do not complicate the system : that's very dangerous for a trader ! The simplest it is the best are the results. The philosophy is to trade the trend. To do that, you have to look at price action (candles) a trend indicator : it can be MACD or DMI for example. MACD is a very good tool because it also gives you divergence. OsMA is an indicator I dont know very well (so I dont use it) but I think it is the same than MACD. On my opinion you have to use only one.

So, now you know what is the trend, you have to wait for an entry signal allowing you a good R/R thanks to a good level entry : what you want is buying cheap in an uptrend and selling high in a downtrend. PA (candles) is very important and oscillators can help you a lot to confirm. Momentum/RSI/Bears-Bulls are the same. They give you the speed of the movement, and the extremes through oversold/overbought levels. Use only one ! Stochastics are good and RSI too. Take a RSI5 or RSI9 for example.

Of course RSI, momentum, and Bulls-Bears will give you the same information because their construction is nearly the same. So I would like to know why you need the same information twice or 3 times ??? Try to keep it simple and compare you results using only MACD and RSI for example. Dont forget that you need to use indicators that you perfectly master ! So you are able to translate it...