Hi all. Just like topchess, I decided to put on my own system for you guys to check it out.
I’d also recommand checking it on demos before going for the real deal. nevertheless, from my expreience with it, it’s pretty good. started using it last week, and hit about 11 out of 15 trades.
enough talking. here goes:
[U]Trading Setup[/U]
Trade on 1 hour chart
26 EMA applied to the close (RED)
50 MA applied to the close (BLUE)
100 MA applied to the close (YELLOW)
Stochastics (10,3,3)
MACD (12,26,9)
ADX (14) (Optional)
[U]Trading Rules[/U]
Stop Loss:
will be determined by MAs, and other supports levels.
maximum stop loss would be 2% of capital.
Take Profit:
will be determined by MAs, Fibonachi and other resistance levels.
win\loss ratio MUST be 1:1 or better!
[U]Entry Rules[/U]
[B]Enter long if[/B]:
Trend* is bullish
Stocks are at oversold
MACD doesn’t show convergance (against you)
26MA and 50MA haven’t crossed against you recently (10 previous
candles)
OR:
Trend* is bullish
MACD shows convergance (in your direction)
stocks are not at overbought
<in this case go to 15M frame and catch the best price possible using bollinger and stochastics>
[B]Enter short if[/B]:
Trend* is bearish
Stocks are at overbought
MACD doesn’t show convergance (against you)
26MA and 50MA haven’t crossed against you recently (10 previous
candles)
OR:
Trend* is bearish
MACD shows convergance (in your direction)
stocks are not at oversold
<in this case go to 15M frame and catch the best price possible using bollinger and stochastics>
[U]Exit Rules[/U]
one of the following occurs:
Trend* is over
Stocks are overbought\sold (against your position)
MACD shows convergance (against your position)
MAs cross against you
*I usually define the trend using the 100MA, and by my own eyes actually.
If I wanted confirmation I’d switch to 4 hours chart and make sure.
However I took Chess’s advice on using the ADX (Average Directional Movement Index). so a trend would either be MA100 going up (and not a one time candle who pushes it up) for a period of at least 40 candles OR ADX>40 (optional)
Use MACD signals as indicators for a trend as well (value goes from negative to positive is bullish and vice versa)