Buy: 5EMA over 10EMA, Stoch up but < 80, RSI > 50
Sell: 5EMA below 10EMA, Stoch down but > 20, RSI < 50
Exit: When the EMA’s cross back over or RSI crosses back over the 50
It said to use this with a daily chart…However it told me to use others. So I am going to use 1h, 4h, daily.
[B]My question is when do I trade? Off what chart do I trade? and to add on do I trade as soon as I see the conditions or do I trade right after the candle has finished forming?[/B]
Answers to these questions would be greatly appreciated!!! Thanks so much! Please help me so I can learn and help others in the future!
Whenever I am relying on an EMA cross or other type of trading signal I will generally always wait for the retrace.
For example, if I go with a 5/10 cross, after the cross you will often find that price has already moved quite a bit, I will immediately draw up fibs and even if there is only 2 or 3 pips between the fibs on the move that caused the signal, I will put an entry order at the 50% fib retracement.
Yes, my order does get missed sometimes, and Yes, sometimes I do get left in the dust, but sometimes just a few pips is the difference between a profitable trade and a losing trade.
Ok, for example. We have a move down that initiates a 5/10 cross down. You are taking the 5/10 cross down as an entry signal, but if you sell now, you wont get in right where the EMAs crossed, you will get in lower. But if you get in on the retracement you will get a better entry.
Look at the attachment that I have provided. This is a 21/55 cross on the EUR/USD. If you entered at the cross, you would get filled somewhere in the blue circle. If you wait for the retrace, you would get filled at the green circle. Now which would you prefer??
As far as the time frames… It DOES NOT MATTER! I hear people ask all the time about the time frames and they talk about how important it is. I know professional traders that trade mostly off of a 1 min chart. I also know professional full time traders that trade mostly off of a daily chart.
Have you ever heard of fractal geometry? If not, that is something that you need to study up on and how it relates to forex. For example, a Fibonacci study works on a monthly chart all the way down to a tick chart. HOW COULD THIS BE you may ask?!? Well, go see for yourself, it is true. That is why I believe that the markets are the 8th wonder of the natural world. (notice I said natural), yes i believe they are natural, they may appear man made, but they merely reflect a collective subconscious of every trader participating, and the subconscious mind is entirely natural. The markets are one of the only ways to see mans subconscious mind graphically depicted.
Sorry if I got a little deep there - Hope that I helped.
Maverick,
I cannot help with fibs, and they are a great Idea if you are there to make the trades, if you are looking to trade based off indicators only…I am more than happy to write you an EA based off your ideas…I can make it easy to follow and explain how to make any changes you may want.
(that part may be easier if you use Skype so we can talk in real time)
I do not think EAs are the best way to trade, but if its something you happen to be looking for I just want to extend the offer.
The problems I’m having are, I don’t know what price to enter at…what price to exit at, why such a trade like the one I posted above broke the .618 fibbo retractment and then make $$$, if I wouoldn’t have taken it based on fibbo rules I would have missed out.
I think this system will not work. Currencies trading is not so easy as to track a few indicators, then you will make money. If this is so, then many retail traders will be making money. But this is not the case.
Why is it that good broker question is always
asked? There are good brokers all around
you. If they are regulated and located
in a stable country such as USA, UK, or
in Canada. And you see them being
advertised everywhere, they are a decent
firm to do business with. Don’t think that some
broker will magically increase your profits.
Only you and your trading ability can do
that. Stop asking for good brokers from
people. Find one yourself.
The most important suggestion that I can offer for choosing a broker would be that if you live in the US. you choose one of the main brokers in the US. you also need to ensure that the broker is regulated by the national futures association.
The last thing that you need is some disagreement that cost you mega bucks with your broker in another country where the government speaks a different language than your native tounge. It would be next to impossible to get any dispute resolved in court, not to mention expensive.
I would also do a search about a broker that your interested in on as many forex websites as you can find in order to find any comments about their service. But I PROMISE, every broker is going to have a few unhappy clients that have posted bad info about them, so you have to take some of it with a grain of salt. But you certainly don’t want to see anything like “Multiple NFA infractions, took my money and ran, formerly under the name of “Blank” which was shut down in 1999 by the NFA.” Get my drift?
I am assuming that since it says “banned” under his name, Trader 123 for some reason has been banned by admin.
Assuming that he was talking about my system, and assuming he can still see this post I will comment.
It is obvious that he has never actually put up EMAs and observed price action around them. Especially a 21/55/ or a 200. Price will actually bounce off of them on a regular basis, especially the 21 and 200. With the 5 EMA price will often get into a “Ride the 5” scenario were price is so bullish or bearish that it hangs above the 5 ema.
I use a 5ema and 8 sma to determine price direction or market momentum.
I use a 21/55 ema combo to determine market direction and speed
a 200 ema to determine overall trend (price is always moving towards or away from the 200)
and finally I use bollinger bands to determind market volatility.
+1 for USMC’s retracing comment. If i were gonna trade EMA crosses I would to either draw a fib retracement or just wait for price to retrace back to the faster of the two ema’s and enter at that level.
Either way is gonna get you in at about roughly the same area. Now what you need to determine is which retracement measure is going to get you into more moves at the best price.
I like 5 EMA 8 SMA for short term price momentum
21/55 EMAs for medium term Market direction and speed
You could also use 5/10 and 20/50 or whatever, but the reason I like the ones I use is because they are Fibonacci numbers ::twilight zone music:: hehe.
Ok I’m going to dump this strategy, I’m going to try effilangs breakout strategy.
Has anyone used it and can help me? He doesn’t make ti too clear about when to go short/long based on what kind of support/resistance is drawn from the pivot points. That and its prolly my newbness
