Macsystems

Hi-All,
I want to start this thread as a way of contributing what I have learned here in FF over the last couple of year (I think about 7 years.)
This journey hasn't been an easy one but I have learned 3 key things are important - PDF
1. PATIENCE
2. DISCIPLINE
3. FOCUS

I hope this thread will add to someone's knowledge and success and also help keep me "focused" as we share our trading together. I have some personal funds to manage and am hoping that I will grow it to some reasonable levels in 3 to 5 years.
No huge targets per say but a reasonable 5 - 10% target per month is good enough and compounding will do the rest.

The method am sharing is about Moving average Convergence; hence the name MACsystem. Some screenshots will explain the rest as we go along. Its a systems that doesn't require trading everyday. this should be another tool in the traders box. There are some PATTERNS that repeat regularly which I have observed and these patterns are the key ones to watch out for.

Note: this is an intraday system but on a good day can have winners if you let them run.. reasonable target are between 30 to 50 pips
Indis: (all are available here in FF if you do a little search)
Pivots
MTF MA
MTF supertrend
BBMACD

Trading TF: 15m or 30m
settings for MA is Linear weighted MA (LWMA) set to 10 & 50 for each TF







Indicators and template shared.


Attachment

For the moving average settings, use a cross of 10 and 50.
the idea is to wait for the Moving averages to compress... meaning market is waiting for a move. the move will surely happen if one is PATIENT. it can happen in Asian, Europe or American session.
Once the market moves, it will take some time to settle and the process repeats itself again. Doesn't work like clockwork hence the need to WAIT for it to happen by itself.
Think of the market like a rubber band.... if you stretch it by any means (fundamental news like brexit) or something else, it will find time to relax.
If the market relaxes so much for a day or two, it will expand and move to another level. Its never static.
Having the discipline to DO NOTHING in between is key no matter the news out there.
The market moves and stops... it stops to move again.

The idea is to wait for the market to "compress itself" and trade in the direction of the following BREAKOUT. Normally, a breakout will happen to signify movement away from the compression.
Note: there can be fake movements, hence i prefer a MTF approach to see whats happening in the higher TF up to 1hr when trading the 15m or 30m charts.

I prefer to
1. SELL after a compression breakout under the 4hr supertrend line
2. BUY after a compression breakout above the 4hr supertrend line

Once the breakout happens, watch out for the first DIAMOND on the BBMACD indicator: green for BUY and red for SELL.

The daily pivots provide reasonable profit targets. you can equally draw S/R lines on the 4hr and see where to take profits. you can allow you entry to run till market relaxes after the BO.

Does it work all the time? NO. nothing works 100% of the time in the FX world hence a good MM is required. Know when news will happen and trade accordingly. my observation is that a success rate of 60-70% is achievable and i will working towards that.
Again, cherry picking the best set ups will guarantee up to 90% success when executed accordingly.

I trade the majors (EU, AU, GU, NU, UJ), futures (SP500, DJ30, NAS100, DAX, FTSE100), commodities (gold, silver, oil)

Other current pairs are a bit erratic to trade; although they can trend on few occasions. i prefer to keep it simple with the pairs mentioned as they give trad-able signals week on week.

This week is NFP week. I expect some compressions going into Friday afternoon.
My observation is that most times the market compresses going into major fundamental news. In such situations, the news will cause the area to break out and move.

I know the charts posted are "after the event" ( history).
My expectation is that we all will share our MA compreasion charts in real time as we watch the markets move.

Fell free to share and comment.

Guys, we have a potential set up on futures UK100.

lets watch this tomorrow and next to see what will happen.

Set up your charts and lets share and discuss before the moves happen.

my idea here is to have us see these things before they become history...

subscribe to the thread so when potential set ups are shared you can see it.

I am a part time trader and will not be here all the time... i am hoping that others will share potential set ups and i will get notified via FF email

regards.

I usually watch FF calendar at the beginning of the week to note high impact news. Most times the compressions happen before such news. Some other times, they happen and technically move without news. No one formula. Flexibility is required.
Note the Asian currencies move during their session while the other majors move during Europe and American sessions.

Good

You will not share the indicators and templates?

Update:

Still shaping up for a move away from compression. After the brexit move... we have a period to stop and ponder for UK100.

i have a small position in.... any retracement to compression zone should offer more sell opportunities (but for FOMC today by 1900hrs GMT). we wait to see what happens by then.



I like to see the 60M LWMA50 above followed by 30m LWMA50 and then the other LWMA for a SELL POSITION and vice versa for a buy position... whether on a 15M or 30M TF.

======
half position closed @ S2 (73 pips)
rest out at BE
Note: with price still close to the 60M LWMA50 and the supertrend line, we can still have another opportunity to trade this instrument

Silver 30M...
Some compression (quiet session).
The LWMA are coming together to move away from each other again. They come together, then move away..... come together/ move away etc.
Same thing with the supertrend line, price comes close to it and then moves away.... comes back to move away again. the cycle continues.

if we can monitor these patterns, there are tradeable signals we can make use of.
Remember, there are fundamental and technical reasons why the markets move from one level to another. I only use these tools to monitor the move.

There's so much noise in the markets most time, these LWMA help to identify when the market is a bit quiet and getting ready to move again.

Opportunities may exist in these instruments in the 15M/30M TF (maybe tomorrow after consolidation today)
Silver
Gold
EJ
AJ
NJ
GJ
natural gas (didn't spot this one 2 days ago.... I don't always trade this instrument but a very good set up like the one of 2 days ago, can add to the month's tally)

Tomorrow is NFP, so there's nothing much today but chop chop and consolidation. I will avoid trading today.

Hey this looks good, how long have you been trading this strategy and what kind of success have you had with it?

Hazz,
Its one step at a time.
Remember, Past performance is not a guarantee of or prediction of future performance.
As we work the charts, we'll see if its profitable or not.

Look at Gold and silver at the moment, they have move some pips/ distance. I said no trading for me till NFP and that's why am still waiting.

Patience is important and staying with the plan as well. Difficult not to trade but one has to learn it. There will always be opportunity to trade before month end.

Compare the two sections in the chart below and see the region or period of uniformity i prefer to trade.
The blue box on the left shows the 1HR LWMA50 above and the other MA moving accordingly. the blue box on the righ shows the LWMA all jumping aroung in a non-uniform manner. I avoid these period for any instrument. It keeps me out of most trades.... i want the LWMA in a uniform manner
The LWMA help me to understand when Prices are aligned and i prefer to trade during such period; although they are far and inbetween... meaning the don't happen all the time on a single instrument. When one pair is not aligned, another pair maybe aligned and present a trading opportunity.


Am watching these pairs today
US futures (DJ30, SP500, NAS100)
FTSE100
GU
AU
EU ( has a 4hr pattern that if 1.1050 is broken and we have a close below that level, am looking to keep selling till 1.0900 and 1.0850)

EU 4hr chart:
A familiar pattern seem to appear on 4hrs... some consolidation happening on 4hrs as well.

30M is compressing as well as all the MA are together... they'll soon move away from each other.
NFP today will most likely provide that catalyst to move.

If we can spot these quiet/ compression areas, we can selectively trade and make some profits.

Please NOTE theses

I use 10/50/100 LWMA (prefer these on 4hr/ Daily/ weekly charts) although it can be used on lower TF

I also use MTF MA which I set as 10/50 only to trade lower TF (15M and 30M) looking for compression zones.

==> on a 15m chart, I have 3 sets of LWMA cross over system
1. 15M TF LWMA set as 10 & 50
2. 30M TF LWMA set as 10 & 50
3. 60M TF LWMA set as 10& 50

with a MTF MA, you can have a 30m or 60m moving average showing up on a 15M chart. As per the settings of the MTF MA to reflect a LWMA, see post #2

so on my charts, you'll see:
Thick orange line: 60M LWMA set as 50
Thick Aqua line: 60M LWMA set as 10
Thick Red line: 30M LWMA set as 50
Thick blue line: 30M LWMA set as 10
Thin red line: 15M LWMA set as 50
Thin blue line: 15M LWMA set as 10

The uniformity of these LWMA shows a quiet or compression zone which can offer us some trading opportunities.


set up your charts, and lets discuss and trade. (just another tool in the box).

EU and GU trade was the only ones i could trade; pre and post nfp.
During the news release, i lost some and reneterd at some level.; but still managed to closed all now at some profit as movement on EU is slow and negates the broad risk on trade on equities, AUD and NZD.
still watching the pattern on EU 4hrs... being weekend, i have to close all.

New Highs for equities in the making.
I will keep my eye on Volatility Index. The new highs will likely turn south when a proper divergence forms on VIX and equities.