This is not a Holy Grail (Simple Method)
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  1. #1
    Join Date
    Dec 2006
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    Cairo, Egypt
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    Thumbs up Trend Simple Method

    Hello,

    I want to thank anyone testing this in demo mode.

    First, I suggest that you get a demo account from vtsystems.com and download VT Trader platform here:
    http://vtsystems.com/en/products/

    Why VT Trader
    It will notify us whenever moving averages cross using an arrow and audible alert. You do not have to watch these lines too much.

    Prepare your VT Trader
    Let us prepare your VT Trader first.

    1. Close all windows, just leave the main panel on left which contains currencies.
    2. On left panel, click "Charts" > then select pair "EURUSD" or "GBPUSD" > then select timeframe "15M" > then select "Heikin Ashi" for pattern/candles. a new chart should be now opened. Right click on main chart and select "Chart Properties" > Rules > Grid (Uncheck visible).
    3. We will add an automatic trading signal generator. Right click on main chart, select "Add Trading System", then select "VT-Moving Average Cross System". Modify default values with:

    Close
    5
    Weighted
    Close
    10
    Simple

    4. Right click on main chart, select "Add Indicator". from the list
    select "Parabolic SAR" and in the color/style panel make it more solid by increasing width of points. (To see them easier on chart)

    5. Right click on main chart, select "Add Indicator". from the list select "Direction Movement Index" and insert it (default 14) Click ok. You should see something like in my attached picture. Arrows generated on cross with sound. Done!

    Now we added a signal generator for 5 Weighted and 10 Simple cross, moreover we added the Direction Movement Index (ADX) below the system into chart.

    The Method

    1. MOVING AVERAGES
    We will use two moving averages cross to identify a trend. In our method we will use the crossover of 5 Weighted (WMA) and 10 Simple (SMA) moving averages. Objective of these is to catch a trend or trend change.

    2. PARABOLIC SAR
    We will use SAR for our entries and exits. We will use SAR to catch early change in trend and place our stop to exit the market, we can also use it to re-enter if it was a brief exit from main trend. Also for confirmation of trend with Moving Averages Cross.

    3. DIRECTIONAL MOVEMENT INDEX
    We will use the DI+ and DI- to identify a trend and confirm it.

    4. Timeframe and Currency
    EURUSD and GBPUSD should be suitable for testing. Timeframe is 15Minute.

    Entries

    >>ENTER LONG IF<<
    A buy signal is generated from 5 WMA and 10 SMA (5 WMA crosses 10 SMA to the upside)
    SAR below candles
    ADX DI+ positive > (greater than) DI- negative (BLUE above RED)

    >>ENTER SHORT IF<<
    A sell signal is generated from 5 WMA and 10 SMA (5 WMA crosses 10 SMA to the downside)
    SAR above candles
    ADX DI- negative > (greater than) DI+ positive (RED above BLUE)


    Exits and Stop
    A conflicting Parabolic SAR signal in opposite direction is major signal of pause or reverse in trend (EXIT). Re enter if SAR signalled again in the older direction of the trend after minor pause. Profit and Stop are discretion for you.

    Secondary reversal signal, a conflicting signal from Moving Averages, or a change in Direction Movement Index trend (DI+ and DI- crossing in opposite direction)

    -----------
    Good luck!
    Remember to check picture (VT)
    Attached Images Attached Images  
    Last edited by topchess; 12-28-2006 at 08:51 PM.

  2. #2
    Join Date
    Dec 2006
    Location
    Cairo, Egypt
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    327
    update:

    SAR has been showing DT for a while, although prices moving very much in rangebound, not dropping actually. It's a small retracement.

    MA's are squeezing together with no clear breakout.

    ADX still shows UT
    RSI still shows UT

    overall, neutral price action into the close. No clear signal.

  3. #3
    Join Date
    Dec 2006
    Location
    Estonia
    Posts
    42
    Sure, why not try it, what timeframe chart do you use for this method? It is simple, and i like simplisity, pritty much the simpliest things are more usefull than the ones that are hard to understand and are complicated!
    One more thing, Nver heard of ADX indicator, do you know if it`s in MT4 by default?

  4. #4
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    Location
    Cairo, Egypt
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    I am sorry having missed the most important point. Its 15M timeframe

    ADX, is in metatrader by default. Average Directional Movement Index.
    and it's a trend identifier.

    update:

    Funny thing is, price has been dropping now with SAR and MA only in agreement, ADX and RSI still up. we will continue on this to see price reaction to each indicator.
    Attached Images Attached Images  
    Last edited by topchess; 12-11-2006 at 05:23 PM.

  5. #5
    Join Date
    Dec 2006
    Location
    Cairo, Egypt
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    I will try to monitor all signals.

    Demo trade #1

    Long 1.95838

    In order that we prevent a winning trade to turn into losing, we can use the help of :

    * more than 1 lot
    * trailing stop
    * not excessive profit projection

    but exit can be due to:
    * stop reached
    * stoploss reached (undecided yet.. ??)
    * an opposite signal
    Last edited by topchess; 12-11-2006 at 06:30 PM.

  6. #6
    Join Date
    Dec 2006
    Location
    Estonia
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    Quote Originally Posted by topchess View Post
    I am sorry having missed the most important point. Its 15M timeframe

    ADX, is in metatrader by default. Average Directional Movement Index.
    and it's a trend identifier.

    update:

    Funny thing is, price has been dropping now with SAR and MA only in agreement, ADX and RSI still up. we will continue on this to see price reaction to each indicator.
    Nice softwear you useing.....care to share what is it called?

  7. #7
    Join Date
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    Estonia
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    Quote Originally Posted by topchess View Post
    I will try to monitor all signals.

    Demo trade #1

    Long 1.95838
    yup...same here!

  8. #8
    Join Date
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    Location
    Cairo, Egypt
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    It's a Java based application from Oanda FX game (for demo play).
    Very recommended.

    What do you think about lots, trailing stops, stoplosses, profit level? We still need a lot of development.

    I think stoploss can be when an opposite signal reached (for agressive style) but that will take 4 indicators to reverse. and that takes time and takes a big loss.

    The problem is that one of two indicators can go opposite for a while and turn back.

    Another problem, putting a tight stoploss.. we can stop out the trade, and then it moves in our favour.

    I will try to find the best combination by demo testing these trades for some time at least.

  9. #9
    Join Date
    Dec 2006
    Location
    Estonia
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    Quote Originally Posted by topchess View Post
    It's a Java based application from Oanda FX game (for demo play).
    Very recommended.

    What do you think about lots, trailing stops, stoplosses, profit level? We still need a lot of development.

    I think stoploss can be when an opposite signal reached (for agressive style) but that will take 4 indicators to reverse. and that takes time and takes a big loss.

    The problem is that one of two indicators can go opposite for a while and turn back.

    Another problem, putting a tight stoploss.. we can stop out the trade, and then it moves in our favour.

    I will try to find the best combination by demo testing these trades for some time at least.
    As i explained in my tread(about BP method)I`m more of a passive trader, i limit profit along with loss manualy, without even waching the chart, so based on that i put 30-40 stoploss and 10-15 take profit!
    I`m not an agressive trader,
    I think stoploss can be when an opposite signal reached (for agressive style) but that will take 4 indicators to reverse. and that takes time and takes a big loss.
    And that`s exactly why i ain`t an agressive one!

  10. #10
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    Dec 2006
    Location
    Cairo, Egypt
    Posts
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    I closed demo trade at 20.7 pips for the experiment.

    This might be wrong decision why? It can go in my favour more. but until we find a strategy to protect max pips and give away minimum loss, we should be happy with 20 pips for a trade. (some trends last until 100 pips)

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