I am not clear on many things here. But depending some of the basics I might understand more. So let me first ask you the following basics first and will take it from there.
I kind of can guess the answers but I wanted you to answer it in your own words.
1) When do you enter the trade?
2) When do you exit the trade?
I think I have found answers to my own questions. Please confirm the following:
1) You open buy when the close price is above the 5EMA high. You open sell when the close price is below 5EMA low.
2) You close the trade on the opposite conditions and create the new opposite trade.
So all clear on when do you buy and when do you sell. But like you said...this will work perfect on trending markets and destroy you in ranging markets.
It seems like you have some ideas to take care of this during ranging using some kind of Lot size management but I am finding it hard to understand this part. I am still looking at the chart diagram you have provided and will see I can understand it.
I think I have found answers to my own questions. Please confirm the following: 1) You open buy when the close price is above the 5EMA high. You open sell when the close price is below 5EMA low. 2) You close the trade on the opposite conditions and create the new opposite trade. So all clear on when do you buy and when do you sell. But like you said...this will work perfect on trending markets and destroy you in ranging markets. It seems like you have some ideas to take care of this during ranging using some kind of Lot size management but I am...
Ignored
ok, sorry for the late answer i was asleep.
yes you got the entry and exit.
i am using a way to take care of bad trades here.
now bad trade for this system is when we have an opposite signal and we are not in profit or at breakeven.
so lets say we are in a sell trade and the price crosses and closes above 5 ema high and we are not in profit or at least at breakeven than we go into recovery mode. so we are just looking to close all open positions with breakeven or a little profit.
i think i solved this by placing a pending order between the sell order and buy order. the pending order has to be 3 times the size of the last position opened.
now this is 1 method to recover. i am working on another i will see which one will keep the account safer.
the key to this system is to be able to recover the bad trades with minimal equity power.
i will try to explain method 1 better with a diagram.
be back cya.
hal
I am understanding this now. I like it. I am still thinking of various scenarios that can arise from this. I will do some thinking and present it to you and we can plan how to resolve each situation that is created. Overall I am liking this.
Basically after we get an opposite signal(price cross and close above or below 5 ema high or low) and we are not profitable we go into recovery mode.
This is second method of recovery.
We keep doubling our position after every opposite signal until we get to breakeven.
This way instead of tripling our position size every time we just double it.
I couldn't show it in this picture but what I meant to draw was that we double our previous entry every time the price cross and close above or below 5 ema.
In the picture it shows that we double our previous position when the price comes back to previous position(this could also be tried as another way to do it)
What I mean is lets say after a sell of .01 we get an opposite signal and we are not breakeven or profit we open .02 lots buy but after this point we will not wait for the price to cross and close the 5ema, we will double our position if price goes back to a previous level until price shoots one way and breaks even.
ciao
