This thread is my journey towards a tradable and hopefully profitable trading system. In this first post I will always update my current system. This journal is a place where I can post some thoughts and report my trades and progress. I am passionate about trading and determined to put in the work to become profitable and I hope that ultimatly this thread will show the struggle and hard work in finding a good system. Please feel free to comment on trades / thoughts as you like.
Broker
WHS SelfInvest
Prostation platform
Setups
With my setups i look for a direction I am going to trade a certain pair in. I will monitor this bias frequently. Ofcourse any bias is subjective. Two investors will look at two pairs and perhaps both think they will move in opposite directions. I am never claiming my bias is the correct one but it is a way to make my trading less random. It also means I can focus on specific entry signals for every pair. An important drawback of using this bias for my trades is that there is always a chance that I become too sure that it's going in this direrection (conservatism bias). So its important to keep in mind the relativity of this bias and to continuously update it.
Right now i'm using Daily and 4H Charts with 50, 100 and 200 EMA. The setups determine my trading bias i.e. only take trades in the direction of my bias. The bias is the direction away from EMA’s. Both charts need to align or otherwise the bias is neutral. If price is between EMA’s bias is also neutral.
In the example below (AUD/USD) the price is below the EMA’s on both charts. My bias is short. The slope is a determinant of the strength of the trend. For now it’s not really included in my trading system yet. However, it’s clear that a ‘new’ bias is preferable with EMA’s accelerating. When EMA’s on 4H start levelling off it can signal reversals or bigger pullbacks of some kind.
So I will trade pairs with a good bias (relatively ‘new’ bias with EMA’s accelerating) and with low spreads. Also preferably good tradable pairs with liquidity so not too many exotics.
There is always going to be a trade-off involved here. Right now it really focusses on longer-term trending pairs. A 200 EMA on a daily chart is fairly restrictive. It does mean that it's going to filter out a lot of ranging. So it's going to miss a lot of tradable moves in countertrends and it's going to face a bunch of bad signals when it's reversing back to the 50 EMA on 4H chart.
Ideally I want to find setups that allow me to respond to new trend fast enough while eliminating false signals when a trend is reversing. Perhaps this is utopian but we'll see how things work out...
Entries
15M Charts with 200 EMA / 7WMA of High and Low (PAC) (yellow) / Daily Open / Stoch 8,3 / TDI 3,9,34
I don’t have a strict set of rules for my system defined yet. It’s basically inspired by TMS. Below is USD/CAD with 3 entries marked. Ofcourse this is easy in hindsight and some signals should be taken and some shouldn’t.
The first signal is a strong green cross of red while above the yellow baseline. Trade is at 14:15 CET right before NY open. It’s confirmed by CCI15 crossing 100 again. The pullback right before is not really a zero line reject (ZLR) but it’s a good signal I think.
The second signal is a green cross of red while in oversold territory. CCI is moving across -100. CCI50 is also rejecting an extreme.
Third signal is a green cross of red below yellow baseline. CCI has crossed -100 but hasn’t crossed 0. This is probably the worst signal of all three. Price actually stalled a bit for 2 bars after the entry. The third candle after the entry would potentially be a better entry. Green is moving back away from red slightly while CCI has crossed 0 and signal is confirmed by the candle breaking the PAC.
Trading time is 8:00 to 17:00 CET.
Exits
Initial SL is a combination of fixed SL 20 pips and a volatility SL based on ATR14 on 15M Chart. Profit exits are still an issue in my system. 5M swing high/lows or 15M signals (green or cci crossing back for example)
Broker
WHS SelfInvest
Prostation platform
Setups
With my setups i look for a direction I am going to trade a certain pair in. I will monitor this bias frequently. Ofcourse any bias is subjective. Two investors will look at two pairs and perhaps both think they will move in opposite directions. I am never claiming my bias is the correct one but it is a way to make my trading less random. It also means I can focus on specific entry signals for every pair. An important drawback of using this bias for my trades is that there is always a chance that I become too sure that it's going in this direrection (conservatism bias). So its important to keep in mind the relativity of this bias and to continuously update it.
Right now i'm using Daily and 4H Charts with 50, 100 and 200 EMA. The setups determine my trading bias i.e. only take trades in the direction of my bias. The bias is the direction away from EMA’s. Both charts need to align or otherwise the bias is neutral. If price is between EMA’s bias is also neutral.
In the example below (AUD/USD) the price is below the EMA’s on both charts. My bias is short. The slope is a determinant of the strength of the trend. For now it’s not really included in my trading system yet. However, it’s clear that a ‘new’ bias is preferable with EMA’s accelerating. When EMA’s on 4H start levelling off it can signal reversals or bigger pullbacks of some kind.
So I will trade pairs with a good bias (relatively ‘new’ bias with EMA’s accelerating) and with low spreads. Also preferably good tradable pairs with liquidity so not too many exotics.
There is always going to be a trade-off involved here. Right now it really focusses on longer-term trending pairs. A 200 EMA on a daily chart is fairly restrictive. It does mean that it's going to filter out a lot of ranging. So it's going to miss a lot of tradable moves in countertrends and it's going to face a bunch of bad signals when it's reversing back to the 50 EMA on 4H chart.
Ideally I want to find setups that allow me to respond to new trend fast enough while eliminating false signals when a trend is reversing. Perhaps this is utopian but we'll see how things work out...
Entries
15M Charts with 200 EMA / 7WMA of High and Low (PAC) (yellow) / Daily Open / Stoch 8,3 / TDI 3,9,34
I don’t have a strict set of rules for my system defined yet. It’s basically inspired by TMS. Below is USD/CAD with 3 entries marked. Ofcourse this is easy in hindsight and some signals should be taken and some shouldn’t.
The first signal is a strong green cross of red while above the yellow baseline. Trade is at 14:15 CET right before NY open. It’s confirmed by CCI15 crossing 100 again. The pullback right before is not really a zero line reject (ZLR) but it’s a good signal I think.
The second signal is a green cross of red while in oversold territory. CCI is moving across -100. CCI50 is also rejecting an extreme.
Third signal is a green cross of red below yellow baseline. CCI has crossed -100 but hasn’t crossed 0. This is probably the worst signal of all three. Price actually stalled a bit for 2 bars after the entry. The third candle after the entry would potentially be a better entry. Green is moving back away from red slightly while CCI has crossed 0 and signal is confirmed by the candle breaking the PAC.
Trading time is 8:00 to 17:00 CET.
Exits
Initial SL is a combination of fixed SL 20 pips and a volatility SL based on ATR14 on 15M Chart. Profit exits are still an issue in my system. 5M swing high/lows or 15M signals (green or cci crossing back for example)
