Some of my thoughts + Trading System

[londont]

way to go Elang, your work looks realy great. it's really interesting to read. keep publishing your pipart.

[availdollars]

To, Elang

Let me shower words of praise n appreciation for the simplicity of your trade system n your great big generous heart of supplying your trade info along with your suplimentary comments n advice. God bless you n keepup the good work for ages to come.

As for me i was a beaten stock n option trader, so i m well versed with technical indicator
I happened to back test your system on 15m frame for 15 days of 2004 on
www.forexpractice.com, its lousy, (unless u can recomend somthing better) my observation below

1. I have been working on the american sesion n i noticed entry n exits every hour in the range of 10/30 pips averaging more then 100 pips in one sesion consecutively by just following the ebb n flow

2. I have been using EMA's, MACD, RSI only as for stochs they seem a little confusing n also causing delay in decisions

3. i get earlier signals on the RSI with followup with EMA 5/10 crosover ( i find the RSI better n easy to visualize on graphs as compared to histogram)

4. I get earlier exit signals on the MACD followed by EMA 5/10

sugestions
If we can get 4 people to back test euro, swiss,london n jap sesions individually n discuss observation on the forum for harsh criticism/advice from our community, it would make us wise n wealthy

Elang without your support n encouragement this proposal will be a no show n no go so your participation is absolutely nessasary

[elang]

Good morning fellow Pippers and Pippettes!

It’s such a beautiful and inspiring new week, isn’t it ? You can just feel the positive energy everywhere waiting for you to suck it up and make 100 pips today !

The sun is shining, the birds are chirping, pips are jumping up and down, what more do you want

So how does boring me, start my trading day ?
I walk into the office, say good morning to everyone, the boss, the colleagues I hate, the hot chic who everyone flirts with, my plant by the window… its so sensitive, the poor thing. Then I sit on beloved second home of a work desk and boot my pet monster with an accompanying “Dee-Dee” like… “ooooohhh what does this button do” expression on my face….

Aaaahh la vie.. Love it people, breath it, appreciate every second of it, it ticks away ever so quickly, the sooner you realize it the more things you will be able to accomplish in this life and the greater of a legacy you will leave behind when you are one day…sniff… gone ^_^

So lets recap on last Friday yes ?… ofcourse YES!
Friday was a very interesting trading week, with news granting a lot of volatility and opportunity for experienced traders to make a carefully achieved profit.

If you haven’t been following through…

1: http://www.babypips.com/forums/attachment.php?attachmentid=53&d=1166104541
2: http://www.babypips.com/forums/attachment.php?attachmentid=63&d=1166183366
3: http://www.babypips.com/forums/attachment.php?attachmentid=61&d=1166177536
4: http://www.babypips.com/forums/attachment.php?attachmentid=64&dw=1166191862
5: http://www.babypips.com/forums/attachment.php?attachmentid=65&d=1166195798

Over all, the results using the system have been vary profitable as you can see.
I don’t expect you to have caught the last trade, as it was an experimental trade, which I placed with a very tight stop as the situation allowed me to do so.

Regardless the results were good and it’s once more proven that news cant change the major up-down-bias sentiment.
The trade was entered at 1.3180 and was trailed with a 30 pip stop loss to as far as 1.3090 for a profit of 90 pips, as if the other 20 we made coming up from 1.3145 and the 58 coming down from 1.3165 weren’t enough ?

Total 168 Pips on Friday. I’m happy.

So back to the Present.
How do I start working my charts at the beginning of the day and what do I do first ?

I open up the H4 and D1 charts and take deep breaths in naïve attempts to better sense the trend direction.
Right… When I’m done breathing I start actually “looking” with my eyes : )

What do I look for ?
Something I like to call EMA Spreads and Bunches, aaaannnd they look like this:

http://www.babypips.com/forums/attac...1&d=1166432153

So, what did you notice there if anything ?
The regions which I have called SPREAD are where the EMAs (50,10,20,50) are showing respect for each other and have a significant gap between themselves.

This is a good trend or short term move. Your AIM is to try and notice spreads just as they happen, at that point where the EMAs start moving away from each other right after the consolidation, if you can catch that and all signals in my system are pointing to an “all go” situation, then trade as soon as RSI breaks 50 and you have a 5/10 EMA crossover.

Whether you just catch the EMAs as they start spreading apart or you come in later when the spread is greater, the important thing is to stick to the base principles of my system.

Further, after each SPREAD there is a period where the EMAs BUNCH together.
During a BUNCH your senses should alerted and you should be evaluating the situation carefully waiting for an entry confirmation based on signals using the 5/10 crossover.

Now that that’s over. Lets take a look at the charts today.

http://www.babypips.com/forums/attac...1&d=1166433123

The price is currently at 1.3093 after it bounced off 3059 to take a breather or correct.
NOTE: In a good trend or move the price action is normally handled by the 10 and 20 EMAS and occasionally the 50 EMA if the correction is larger. Should the 50 break though and your experience tells you it will go further then it is time to quit and wait for another trade.

For now the RED 10 EMA on the D1 Chart has handled the price correction at 3115.
My thoughts are as follows ( I try and avoid the word “feelings” ):

Scenario 1: The price will break 3059 with the following consecutive targets:
A: 3040 (200 EMA - AKA Great Wall Of China) B: 2938 C: 2899/2900 D: 2760

Scenario 2: The price breaks 3131 with the following consecutive targets:
A: 3188 B: 3292 C: 3364 D: 3482 E: 3668

The price correction from 3059 may go to as far as 3131 before coming back down to retest 3059 to carry out Scenario 1.

If it breaks 3131 starts moving to 3188 we could be having a much larger consolidation with which the bias would shift slightly to the upside.


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My bias today is bearish and this is my probable trade:

http://www.babypips.com/forums/attac...1&d=1166433360

That is all for now, we just have to wait and see what the market gives us.

Regards,
E. Lang

[elang]

To, Elang

Let me shower words of praise n appreciation for the simplicity of your trade system n your great big generous heart of supplying your trade info along with your suplimentary comments n advice. God bless you n keepup the good work for ages to come.

It is my pleasure. I do what i can to give back what i've been thought, it is my way of paying back and i will continue to do so untill my last breath as i always strive to learn more.

As for me i was a beaten stock n option trader, so i m well versed with technical indicator
I happened to back test your system on 15m frame for 15 days of 2004 on
www.forexpractice.com, its lousy, (unless u can recomend somthing better) my observation below

I would rather say your method of application was lousy, the system does work and it is proven. Your mistake is in thinking theory is sufficient. You need a lot of practice with the system to get to know its specifics and its attitude towards each currency pair.

1. I have been working on the american sesion n i noticed entry n exits every hour in the range of 10/30 pips averaging more then 100 pips in one sesion consecutively by just following the ebb n flow

I'm sorry i do not understand what "ebb n flow" is ?

2. I have been using EMA's, MACD, RSI only as for stochs they seem a little confusing n also causing delay in decisions

The Stochastics take some getting used to yes. Don't forget that indicators are just confirmations and reflections of the price movement, the most important thing to watch are the EMAs and the Price itself + R & S + Trend Lines

3. i get earlier signals on the RSI with followup with EMA 5/10 crosover ( i find the RSI better n easy to visualize on graphs as compared to histogram)

I agree.

4. I get earlier exit signals on the MACD followed by EMA 5/10

MACD will give you a good "early" exit hint, but you need to combine it with RSI to guage the "optimal" exit.

sugestions
If we can get 4 people to back test euro, swiss,london n jap sesions individually n discuss observation on the forum for harsh criticism/advice from our community, it would make us wise n wealthy

Elang without your support n encouragement this proposal will be a no show n no go so your participation is absolutely nessasary

I have absolutely no reason to believe that this system requires additional backtesting any longer.
Those who wish to confirm its results may backtest ofcourse, its a free world

To profit from it, you just need to practice with it. That is all.

The best currency to apply it to is GBP/USD, which i consider to be one of the most reliable and disciplines pairs, character wise.

Regards,
E. Lang

[elang]

While i was dooozing off analyzing the EUR/USD which normaly kicks in very slowly, GBP/USD was all out parading...

I didn't manage to catch this trade at the 5/10 Crossover but i entered at 1.9524 coming down from the retrace.

http://www.babypips.com/forums/attac...1&d=1166438232

It is natural for prices to correct and make retracements, so don't let that bother you.

After every long move, the price will stop to correct. Corrections are healthy and they are natural, so get used to them, and instead of letting them scare you out of a trade, just sit back and relax.

http://www.babypips.com/forums/attac...1&d=1166438232

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EUR/USD Is still in a Bunch and i'm going to wait untill i see some nice EMA spreads and a good entry signal.

http://www.babypips.com/forums/attac...1&d=1166438402

[parsush]

Good morning Effi.
I'm currently looking for a good broker that uses MT4 as a platform (since this is the only platform I feel comfortable working with).
I was wondering which is yours and whether you'd recommand it.

Regards.

[elang]

Good morning to you too (If it is. wherever you are),

Believe it or not Parsush i actualy only chart with MT4, i actualy trade with www.forex.com

Their Platform is mega crappy and so are their charts and sync, but they are having a new software realeased begining of next year so thing will be up to date.

I have a friend who trades on MT4, i will speak to him and let you know who his broker is.

Regards,
E. Lang

[parsush]

but how could you use MT4 for a long period of time? don't they have a trial version which expires after 60 days or so? I mean, unless your broker supports it...
...oh, and it's noon here

[elang]

Hello Parsush,

I've only downloaded MT4 once.
Registered a DEMO account and used it every since.

As for the Broker i spoke with my friend and he claims he uses InterBank FX.
You can try to Google that.

Regards,
E. Lang

[elang]

Hmm.... interesting trade.

As per post #25 http://www.babypips.com/forums/showp...6&postcount=25 up there the trade entered on the retrace of GBP/USD short @ 1.9524 had a rather strante developement.



I would have held it further to let it reach its initial target: 38.2 % Retracement 1.8836 to 1.9846 at 1.9458 but i need to leave the office, so i am closing this for today.

As you will notice.
There was a news release which shot GBP up, nearly hitting my stop which was my Entry at 9524, although it luckily went only as far as 9522 after which it plummeted back down where i closed the trade @ 1.9494.

My bias still remains bearish and i believe the initial target of 38.2 retracement at 1.9458 will be met.

More updates tomorrow.

Regards,
E. Lang