O.K. Guys this is a good one. A friend of mine gave me this system that he is working on. And, I do mean working on. He has a good start but that is all. We need your help in getting going. I think he might have something here. It is simple but unrefined. That is why I decided to call it the Crazy Mans System. Not because you have to be crazy to use it, but because the man that gave it to me IS Crazy. So here we go.
The Fast EMA’s
EMA 3
EMA 5
EMA 10
EMA 12
These must all be the same color. I like to use red because it is hot.
The Slow EMA’s
EMA 20
EMA 22
EMA 25
EMA 28
Also these are all the same color. I like to use blue because it is cold.
When all of red crosses over all of blue buy.
When all of blue crosses over all of red sell.
That is it. And also that is why we need help. I added bollinger bands just to see how much the market is moving. I also tried SAR’s for stop loss. Take Profit is when any one of the red lines cross any of the blue lines.
So guys give it a try, add some studies, fibs, support and restitance lines what ever you like. Let me know how you do.
I have found that it works on any time frame but the 1 min chart.
Bazooko,
I have a friend of mine that has a similar type of EMA-CrossOver system that he has been using with moderate success. How much back testing did you do, what time chart? You mentioned that is works on any chart except the 1 minute chart was there a reason for that? Is there a way to get back to the man that gave it to you and ask him some supportive questions to provide reasons as to the why and why not of the system?
My friend is using a MACD zero line crossover for confirmation with the similar system. I have taken it and added trendlines to mine to capture the reversals. Not 100% right all the time, but nothing is, so I am happy with the 75+% that it’s provided. My friend is more hands off and I am more hands on in regards to trading. Post what you find out…
This system cannot be used on the 1 min chart because the EMA’s cross over way too much. If you do use the 1 min chart you need something with a 3 pip or less spread. You can win with the 1 min chart but as soon as you break even be ready to pull out with a 1 pip gain. You will miss some nice 7 to 10 pip gains but it will keep you from lossing (sorry I can’t spell) 10 or more pips.
I back tested it on the 4 hour chart and you can catch some nice moves, around 50 pips or more. If you use the SAR trailing stop you can protect yourself pretty good. I also have had some success with placing my stop at the lowest candle of the past 3 candles. Not so good with dailys but ok with 4 hours. The only problem is I seem to never be at my cpu when I get an entry signal.
As for the questions you had, I gave you all he gave me. I’ll see him tonight and talk more about it tommrow.
I have been playing on a 2 min. Chart and a 10 min. chart, and I also made the 3EMA a 2EMA to get closer to price and I use it as an exit, meaning that when the 2 EMA crosses the 5 EMA when the trade is going against you, that is your exit, instead of waiting for all of the red EMA’s to cross over all of your blue EMA’s. I’ve noticed that by waiting for “ThAT” (red over blue) cross to happen, you are giving back 25-43% of your gain. By using the 2EMA crossing the 5EMA, you are not giving back as much, but you are able to realize that you are positioning yourself for the next set up. Run thru a backtest period and talk to your guy and see what the outcome is… looking forward to your next post.
Well I said he was crazy and I was right.
He said that all he does now is fibs and support and resistance. Since September he took a $3000 account and turned it into $300. In the last 2 weeks he made $3500. I think he is a few tacos short of a 6 pack.
I am currently in an awful losing streak but I have a few questions for you.
My charting will not give me a 2 min chart which is what crazy man said to use. What Platform are you using? What pair do you trade? Crazy man is doing GBP/JPY and when do you trade?