My Trading System
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  1. #1
    Join Date
    Dec 2006
    Posts
    124

    Cool My Trading System

    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:

    Trading Setup
    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)

    Trading Rules
    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!

    Entry Rules
    Enter long if:
    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>

    Enter short if:
    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>

    Exit Rules
    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)
    Last edited by parsush; 12-14-2006 at 08:58 PM.

  2. #2
    Join Date
    Dec 2006
    Posts
    11
    Looks good. Do you think you could post your trades with charts so we can see what its supposed to look like when you enter and exit? Thanks for posting.

  3. #3
    Join Date
    Dec 2006
    Posts
    124
    ...and this is how it looked like today.
    in both cases I spotted a trend, stocs were oversold\bought and MAs & MACD were okay with it. I used fibonacchi levels a lot to set TP and SLs however I don't want to visually overload you guys, so just trust me on this one

    Chart 1
    both striped lines represent TP1 and TP2.
    both were chosen according to fibonachi retracment levels.
    forgot to add the SL to the picture - was at about 1.3254, which is as well a fibonachi resistance level. (61.8)

    Chart 2
    in this one I almost got into the first (orange) trade, however I noticed that exactly 10 candles ago there was a crossover against me. I decided to be disciplined and didn't trade (the Orange X mark). unfortunatly I forgot to check on it later on as there were 30 pips available easily, and a lot more with 2 lots. too bad. next time.
    in the trade I DID get in to:
    blue striped line stands for TP. chosen because of previous resistance there (and close enough to fibo [100.0])
    oh, and ofcourse, Stocs are oversold again.
    red one stands for SL. chosen by both fibo and 100MA.
    you can see that in this one, unfortunatly I didn't hit the entire jackpot. 30pips still pretty good, but if I used 2 lots (1 trailing stop) might have been a lot more.
    Attached Images Attached Images    
    Last edited by parsush; 12-15-2006 at 06:31 AM.

  4. #4
    Join Date
    Dec 2006
    Posts
    5
    very nice screenshots, parsush. it seems you're using candlestick patterns (doji spear, hanging man...) as well to enter, am i correct?

  5. #5
    Join Date
    Dec 2006
    Posts
    124
    originally written by londont:
    very nice screenshots, parsush. it seems you're using candlestick patterns (doji spear, hanging man...) as well to enter, am i correct?
    I'll use whatever it takes to make me filfthy rich!!

    just kidding... while I might use patterns to support my decision whether to get in a trade or not, (when things could go either way), I don't give them a lotta credit.
    if my stoc says it's overbought, no dragonfly doji would make me think otherwise.

    I've decided to add yesterday's trade, which is still up and running, as well.
    in this one I left the Fibonacci on the chart so you could see how I use it.

    unfortuantly, I was 1 pip short from take profit, but I hope it would get there eventually. again you can see that if I were near the computer in the right time (last time stocs hit buttom) I would have made a massive pip gain by using 2 lots, 1 with a trailing stop. oh well. next time.
    Attached Images Attached Images  

  6. #6
    elang's Avatar
    elang is offline Superior Master Contributor and Member
    Join Date
    Dec 2006
    Location
    Varna, Bulgaria
    Posts
    754
    Interesting system you've got there Parsush!

    It's so inspiring this section of the forum.

    It feels like walking into an art gallery, so many different works, ideas, perceptions.

    Just wonderful!

    We are all going to be silly rich

    Good luck to you!

    Regards,
    E. Lang
    Last edited by elang; 12-15-2006 at 08:36 AM. Reason: Typo

  7. #7
    Join Date
    Dec 2006
    Posts
    124
    lol thanks Effi
    I totally agree. few more systems posted here and we'll combine them all into one mega system and rule the world with it!
    yours is also very good (if anyone hasn't seen Effi's art work, just look here)
    and I'm saying so because of the good comments you got... unfortuantlly I haven't tried it myself yet cuz I'm still busy working on mine.
    I promise, however, that when I'm done, I'll open a demo account dedicated to your sys and tell you what comes out.

  8. #8
    Join Date
    Dec 2006
    Location
    Colorado, USA
    Posts
    142
    Quote Originally Posted by elang View Post
    We are all going to be silly rich

    Good luck to you!

    Regards,
    E. Lang
    Elang, I've completed setting up my charts using your 4 ema system. It looks promising. I am testing it now on gbp/usd,eur/usd,usd/jpy,usd/chf, and usd/cad on the 1H chart. Well see in the next few days. Are you trading this system live?

  9. #9
    Join Date
    Dec 2006
    Posts
    5
    hey parsush, how about a review of your latest trades? how's your system doing?

  10. #10
    Join Date
    Dec 2006
    Posts
    124
    I was too busy counting my profits I forgot to post it
    last several trades have been very profitable... here goes:

    in the USDCAD trade I used the second part of my system, relying on the MACD's excellent accurecy in detecting hidden convergances.
    in the other trades, I was using the good old first part, the stochs based part.

    Name:  eurchf.gif
Views: 2142
Size:  23.1 KB Name:  eurusd.gif
Views: 2027
Size:  25.7 KB Name:  gbpusd.gif
Views: 1991
Size:  24.2 KB Name:  usdcad.gif
Views: 2018
Size:  28.1 KB

    right now I have three active trades and two of them are not going too good, but I'll soon upload them anyway for the sake of authenticity.
    Last edited by parsush; 12-19-2006 at 08:23 AM.

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