Using the DASR for successful trading

Hi everyone

END OF DAY SUMMARY WITH CHARTS

Well I'm too lazy to add it up but I managed well over 300 pips today. nett profit of $127.70 max leverage .05 (5 micro lots) but mostly 3 micro lots.


Lets have a look at a couple of examples:

GBPNZD 30 MIN CHART : 6 TRADES - 4 WINS AND 2 LOSSES - NETT GAIN OF AROUND 150 PIPS
USDCHF 1 HOUR CHART : 3 POSITIONS - TOOK PROFIT TOO EARLY - 90 PIPS

Please see the blue or red arrows on the charts for where the trade triggered

ALL TRADES WERE TAKEN BY THE EA (AUTOMATED) NO MANUAL TRADING REQUIRED!!

On GBPNZD , I was switching between EA set for 12 ema close and EA set for 62 ema close. As you can see I missed the switch at 4.00pm back to 12 ema !!

Hi everyone

Choppy today!

But yesterday was so good, can't have everyday the same!

Just wanted to highlight a great set up from yesterday on GU - very easy to spot after that big rise in the afternoon. As far as our system is concerned, we had two great bounces off the 12 ema on the 15 min chart. Yielding approx 90 pips!!

Hi everyone

Was tied up with something today so didn't trade much today. Generally a choppy day although CAD moved a bit

Managed a couple of trades on EURGBP 1 hr chart - which turned into very nice little wins. One was manual (sell off 62 close) and one using the EA off the 12 close. Had one loss on the same pair but it was small.

Remember if price has broken through the 30 min DASR we always go to the next one up. In this case the 1 hr

Hi everyone

I'm going to make a small change to the RULES

Instead of having all our trading pairs open on the 30 min chart, we are going to change them to be initially open on the 1 hour chart time frame

I will explain why over the weekend and also try to show how to train yourself to spot easy set ups!

The main pairs I have open on my VPS are: GU, EU, GZ, EZ, AJ, AU, GBPCAD, EURCAD, EURGBP, AUDCAD, Gold, GBPCHF, USDCHF, CADJPY

Obviously to save resources, it's easier to have them open on the 1 hr time frame but it's really a for a couple of other important reasons that I want us to initially have the 1 hr chart open

Hi everyone

From Tuesday/Wednesday I will open a small live account of $200 and we'll start seeing if we can increase the balance relying solely on max pip gain and low leverage (one or two micro lots)

Hi Jmtini

started reading the thread yesterday and downloades the indis and template, then I decided to skip to the last page and see how things were developing, but It looks lke it's changed massively.

I have your new template, but wondering if you could point me to an explanation of your new strategy and Ea settings.

many thanks

Martin

Hi ukmartin

Nice hearing from you and any other followers of the thread please feel very welcome to post any questions!

Yes it's confusing at first but kindly ignore any posts before Post No. 870 The "DASR" (dynamic area of support and resistance) has changed. The Vegas Tunnel has been discarded completely! The new "tunnel" and DASR is the area between the 62 EMA high and low with 62 EMA set to the close as the center. I use the 12 ema (aqua coloured line on my template) for faster trend bounces.

Please look at all the examples in the posts above to get an idea of where we are looking to open trades. Important - (Fairly obvious really) I do need to emphasise that it's VITAL not to trade around NEWS breaks!

Rather then have one EA and have to change the setting everytime, I have five. One set to 62 EMA close, one to 62 EMA high, one to 62 EMA low, one set to 12 EMA close and one that has been adjusted to trade XAUUSD ( set 62 EMA close)

I have attached them below. You can open them in your meta editor and then save to your EA folder if you want to change the lot amount or even set up MM if you want MM. The trailing stop function has not been programmed properly and I would suggest not using it at the moment.

OK now really need to look at SET UP STRATEGY

This is a CHANGE. I really think it's vital not to waste time looking at trading pairs where price action is choppy or more dangerously constantly ranging through the DASR (not respecting our area of support/resistance) which can happen on any trading pair.

So as a good FILTER one can use the 4 hr chart. Look at the 4 hr chart and what we want to see is price action moving away from our tunnel at a nice steady angle.

I have attached two examples below. CADJPY and GBPCHF. Having a look at their 4 hr charts, we see price action moving nicely away from the DASR. In some cases we could have directly used the 12 ema on the 4 hr chart to open trades or AS NORMAL we go down to the 1 hour chart (or even 30 min chart) to open trades off their respective DASR's.

Remember of course that with this strategy, we are only opening trades in the direction of the trend!! (CADJPY SELL ONLY - GBPCHF BUY ONLY)

OK another example

AUDUSD

From 22nd January price action departed nicely away from our 4 hr chart DASR.

By using our 4 hr chart 12 ema, or 1 hr chart DASR (or 12 ema) or 30 min chart DASR (or 12 ema) - DEPENDING ON THE STRENGTH OF THE TREND, we can just keep on picking up nice sell trades!!

Thanks for that info

All sounds pretty logical in theory, i'll load some charts next week and take a look at it

Hi
Does the EA trade real money automatically for you, even when you are sleeping?
Would you say the optimum TF for the EA is the 30 minute?
May I ask why the EA is set to the 62 ema high, low, and close? Does that mean it opens 3 positions?
Thank you
SC

Hi sclipp

Absolutely! The EA works on a live account just the same as on a demo one. However I suggest that you set it up on demo for at least a week to see how it works and you can adjust the lot amount depending on your account balance. I know that some brokers don't allow micro lot trading. I really would suggest moving to a broker that does.

The second part of your question requires a more detailed answer and I am going to answer it in the next post. Just to make it clear, it's all the same EA - what I have posted above is the same EA but each one is set to open a trade at a different place. Have a look at the chart below. The first EA posted above will open a trade if you open it on the chart and price action touches the purple line (which is the 62 EMA set to the CLOSE). The second EA posted above will open a trade if you open it on the chart and price action touches the yellow line (which is the 62 EMA set to the HIGH). The third EA posted above will open a trade if you open it on the chart and price action touches the white line (which is the 62 EMA set to the LOW). The forth EA posted above will open a trade if you open it on the chart and price action touches the aqua coloured line (which is the 12 EMA set to the CLOSE). The fifth EA posted above is only for GOLD (XAUUSD) and will open a trade if price action touches the 62 EMA set to the close on the XAUUSD chart.

The question remains, which one to set? That's the important question and I'll try to answer it in the next post

Which EA TO USE?

OK we're talking about using the EA to open trades RATHER then manually. Obviously the case for manually opening a trade is STRONG because we will have visual confirmation that price action has indeed bounced off that particular area of our DASR. And if you are a DISCIPLINED TRADER you will set appropriate SL and TP levels. If you're unsure of your TP you can simply move your SL to BE after about 20 pips and use a trailing stop.

I'll be honest, I am NOT a very disciplined trader which is why I prefer to use the EA! The other benefit is if you are 70 - 80% sure that price action will bounce off the EMA close/high/low then you can set up the EA maybe an hour or so beforehand and just close your VPS and listen to some music or do something else!

OK so which EA to use? Well if you take a look at at the charts above (say from Post 888) do you notice something? Yes I'm sure you did! Price action will CONTINUALLY retest an area of our DASR until it eventually breaks through. Not only that, but it VERY OFTEN retests the same area or EMA line. Look at the EU chart above for instance. Notice how price action continually retested the EMA HIGH throughout the day! Sometimes the it's not so obvious and really it's a matter of TRAINING YOURSELF to get used to looking for bounce areas. Best thing to do is open the 1 hr and 30 minute charts of all the trading pairs I specified in Post. 884 (you can even add NZDUSD to the list if you want to and any other pairs I might have missed where their price action CONSISTENTLY RESPECTS the DASR) and see how/where bounces occurred. This will help you TRAIN yourself to spot future bounce areas!

Just to mention that you must not be restricted to looking for bounces off the 62 EMA set to the low (white line) or to the close (purple line) in a downtrend. Often price action will break through and continually bounce off the 62 EMA high line (yellow line) in a downtrend. (the opposite in an uptrend of course!).

Hi jmtini

I noticed that the price bounces off the 12 ema for smaller corrections within a move - so a wave within a wave
and it bounces off the low/close/high of the 62 ema for the bigger correction of the big wave.
So for that reason, 30 minute/ 1 H / 4H TFs would work nicely for the different waves
Do you use a particular EA for each TF or have them all for every TF?
Thank you for the great thread.
SC

Hi sclipp

The answer is that we can use the 62 EMA (DASR) area and also the 12 EMA (DASR) area on all our time frames. However I would advise against using the 12 EMA on the 4 hr chart because you need a much bigger SL and it's easy to get stopped out.

I have actually created an area of DASR for the 12 EMA on my template. I've done away with the MACD because quite frankly it's lagging and fairly useless IMHO. So my new template is posted below. One for the 4 hr chart and one for the lower time frames (has daily pivot lines). I've use dotted lines for the 12 EMA high/low lines.

A good example to answer your question is GBPUSD over the last few days. On the 4hr chart there was a nice up move on 3rd February. We had a bit of a retracement on the 4th and a nice retracement on the 5th. Going down the 1 hr chart (posted below) we can see how easy it would have been to use the 12 EMA area to open very lucrative trades! Back to the 4 hr chart we see nice bounces off the 4 hr chart 62 EMA high on 9th , 10th and 12 th February.
On 12 February there was a very strong up move. So obviously price action was well clear of the 12 EMA on the 30 min chart so we go down to the 15 min chart (posted below) and we saw two lovely bounces off the 12 EMA on the 15 min chart!

Guys, the 12 EMA on the 15 min chart is the LOWEST I go and at that VERY OCCASIONALLY - I DO NOT go down to the 5 min chart. Experience has shown - too many losing trades!

Lastly if you really want to have a much higher ratio of winning trades and with more pips available too, it's better to use the HIGHER time frames. Just look at the amount of pips available on the 3 trades I've arrowed on the 1 hr chart - about 280 pips! The other benefit with concentrating maybe on the 4 hr / 1 hr is it's much less stressful!

They're wonderful charts and great advice not to go down to lower TF. It took a lot of effort and many losses to get out of the 1 and 5 minute. Please excuse my ignorance, but what does IMHO stand for?

Hi sclipp

Sorry "In my humble opinion"

Yes I'm afraid you're not the only one to be heavily burned by trying to concentrate on the 1 min/5min charts! The beauty with this strategy is that we always have the OVERALL PICTURE of the prevailing daily trend and as we ONLY trade re-entries, we are generally getting in at the BEGINNING of a nice move NOT when it's almost over!!

Hi everyone

Hope you understood everything above! Let's have a look at today's trading conditions.

I have around 5 or 6 trading pairs where price action is moving nicely away from our DASR on the 4 hr chart. Gold is well away from our DASR but is in a counter-trend situation so I would be careful with Gold right now.

A really nice one I've got is EURNZD moving bearish away from our DASR and lo and behold - a lovely bounce off 12 EMA on our 1 hr chart this morning!

Sorry, the orange horizontal line I've got on my 1 hr chart is just to give me a reminder of where the DASR is on the 4 hr chart.

Hi everyone

UPDATE

Well EZ continues to provide opportunities. Going down to 30 min

GBP is weak today guys so be careful buying GBP. US Dollar fairly strong so USDCHF was a nice one if you were up early enough. Notice the previous FOUR bounces off the same area of our DASR!!

I'm looking at GBPNZD for later today as 4hr chart is looking Hopeful (attached). Keep an eye on your CURRENCY STRENGTH METER to make sure that GBP stays weak in the US session starting in 40 minutes!

UPDATE

OK we got two going, guys. GU and GZ . The "jury is out" on the GZ trade which is off the 12 EMA on the 30 min so it's only got +- 60% chance of being successful. I have opened it manually because for some reason the EA did not take the trade. More hopeful that the GU trade will result in 60 + pips


Almost hedging here actually!