Entry and Exit Strategy any good?

First, im fairly new to the game and i would like to ask a question concerning and entry and exit strategy, for discussion sake, GPB/USD.
Being that im fairly new, and i have been reading about Sidus's method and i would like to see if my justification to enter a trade is reliable or not.

The last 2 weeks or so the trend for GPB/USD has been bullish. With that in mind i have been studying the 18 and 34 EMA's on a 1 hour chart. In my conclusion i found that each and every time the price dropped below the EMA's it had eventually rose above them and ultimatly increased in price. This is from just looking at the history. (i think this might be where the problem lies)

It would make sence to me that all i would have to do is buy below the EMA's and then wait until the price rose above the EMA's and take my profit(1 hour chart).

Just to clearify the main reason i feel this is a sure bet is because the trend for the last 2 weeks or so was bullish. So even if the price declined, it would within time incline turning what would of been a short term trade into a long term trade.

I know i should be testing this with a demo to figure out what good stop losses would be, I wanted to see what the amazing people at FF think to give me some insite before i start to test it or maybe someone to plainly tel l me im wasting my time, as well as theirs for them having read this.

Would the problem be that because the EMA's history, of what i have been looking at, also incorporates the future prices? Its hard for me to imagine how much that would efect this strategy.

Also, does anyone know any charting software that supports forward testing? this would really help accellerate me learning all this good stuff that Forex has instore for me.

I appreciate any input. I will be checking in later tonight!

BTW my first few posts and definatly not my last posts here on FF. I hope you guys enjoy reading it as much as i enjoyed typing it!

Hey Mate,

From one noobie to another, the best advice i can give you would be approach your question from the direction of how much am i willing to loose in a trade.
When you work that out then divide that by how many lots you intend to buy and that will give you the required stop loss number.

Go an read these stickies in the begineers forum
http://www.forexfactory.com/forexfor...ead.php?t=3690
and
http://www.forexfactory.com/forexfor...ead.php?t=5673

they will explain it better than i can and you will also learn some very valubale lessons in MM.

Enjoy ADE

Thanks for the previous post, im new, but maybe not that new. I actually have read some of first link.

I actually decided to make it clearer and post a picture of what i would do. Without realizing it i cut out the prices. It ranges from about 1.84xx at the bottom to about 1.88xx at the peak. The white would be my entry points. Usually 25, 35 pips below the red EMA's. My exit would be anywhere in the pink above the red EMA's.

I really want to forward test this tonight, Mainly for my learning experiance. I hope this little picture i made clearifys what im talking about a little better

Hourly chart.

I trade the same pair as you but my style is completely differant so i don't know how much help it will be but i set my stop loss at -20 pips

I am only willing to risk 100 pips in a trade so i take 5 lots

thats my approach to working out where my stop goes.

Hello Liquid11,

I think there is some fundamental aspect of moving average you need to understand before you start to use your strategy:

1. How do you determine whether it is "bullish"? If you use EMA to determine the trend and say bullish, then your trading strategy is doing EXACTLY opposite thing.

2. How do you know that the "pop" through of EMA is finished?? How about the trend simply just reversed??

3. "Normally" the use of moving average is to "catch" the middle part of the trend.

4. However the use of envelop (similar to your thinking, enter trade 25 to 35 PIPs away from the MA - "deviation") can produce quick profit but don't expect to ride the trend. (You can check the "Firebird EA" thread.)

Hope you learn something and successful in your testing.

What i did was look at the 3 hour chart to determine in which general direction the prices were going and it was / generally a bull market

I havnt figured it out yet and if the trend reveresed, i would have to rely on a stop loss in which i havnt figured out yet either (want to forward test to see if there is a good figure that will work well the majority of the time(80% atleast))

What im trying to do is avoid riding a trend, in my small amount of experiance i have been buying when the EMA's cross and end up losing. But that is a whole difforent strategy and more of a personal problem


Would it make more sence to use the MA's as an exit point? I think we got something here


Thanks a lot for the response. Definatly helping me out. I actually am in the middle of a trade in which i used MA's to cross as an entry point. As of right now i am down 21 pips. I dont think that strat works for me.

I would like to see if there is any program out there that can go hour by hour from historical data so i dont have to wait months to test a strategy, rather make a months time go by in 15-20 minutes.