Some of my thoughts + Trading System

Hey guys.

I would like to give you an update on todays trade using this system.

Feel free to view the attached image i’ve prepared.

Regards,
E. Lang


Can u pls tell me the time zone(i e GMT) u have used in your charts as it is 11.10 EST now n if it is EST then u r a great guy to post it so soon

Thanks Elang,

That’s what I was looking for. Looking for equivalent acronym on my platform.

Happy i could help.

I will keep updating on daily trades here in the hopes of popularizing this system for the people who are still devoid of it.

Regards,
E. Lang

Hi E. Lang,

Thanks for sharing your system. I have a question on this chart though. Why did you exit where you did? I thought you have to wait for the 5 EMA to cross back up over the 10 EMA. Appreciate your help.

I read your post and tried the setup on my charts. Well, I said…Fantastic! The MAs line up is very good for GBPJPY swings on the chart.

I find it very helpful for all of us, and it’s simple, that’s kind of you. but I have a question

You said:
3. Set a 10 E-MA (Colour Red)

but then said:
Entry Criteria:

  • When the white 5 EMA crosses the Red 20

So which color is 20EMA? or you meant 5 and 10?

  1. Don�t trade when you are drunk
    HAy, can i disagree with that? lol!:slight_smile: JK
    Besides that everything is well put “my compliments to the cheff!”:stuck_out_tongue:

My apologies.

The RED E-MA is 10!

White - 5
Red - 10
Green - 20
Blue - 50

Regards,
E. Lang

Good morning everyone,

I would like to update you for today.

Please feel free to view the attached image i’ve prepared.

"Trade Update

Good morning from me guys.
The time is 09:30 GMT + 2 and I am just putting in the daily update.

Before we move forward, I just want to clear up �why� I exited where I did on yesterdays trade.
http://www.babypips.com/forums/attachment.php?attachmentid=53&d=1166104541

For those of you who are just starting to read this thread. Entries are colour coded BLUE and POSITIONS EXITS or SQUARES are colour coded RED.
Now back to my elaboration of my exit reasons… Even though we�re trading a mechanical system here, it doesn�t mean that we have to switch into �Dumb� mode; having an automatic gearbox doesn�t mean the steering wheel is going to turn on its own!

The reason I exited was because the price hit S1, which yesterday was located at 1.3169. Supports can be whacky sometimes; today it goes straight through, tomorrow it bounced with 25 - 50 pips in a few seconds… I preferred to play it safe in that situation and take what profits I had, rather than the possibility of half or less later.

Either way as you�ll notice the price did bounce off where we bought back and Squared and if you have set up your MAs like I advised before, you would realize the 10 MA handled the price vary nicely - this is a good sign of continuation in the same direction.

The second reason why I closed of the trade was Stochastics - note how they went into the oversold zone, floated about in there (Which is the continuation of the down move) - then started trying to break out of it to come back up.

This is normally where consolidation starts and you should try and get use to these signals so you can prepare yourselves, as after each consolidation there is a breakout and the 5/10 E-MA crossover is a wonderful breakout signaler.

As you will notice on the chart I was lucky enough to wake up, catch the taxi to work and sit in front of the pc just in time to catch another good entry point signaled by my system.

I�ve entered a long at 1.3145. Although I was a little biased, due to the fact that 1.3131 Support hadn�t been tested yet + the obvious imminent 5/10 crossover on the Daily Chart all pointing to a bearish sentiment.
Regardless, I�m still holding the position now, its broken through 10,20 and its now testing 50 E-MA.

As I mentioned before a price breaking the 50 has intent, so stay alert. At the moment there are two scenarios; 1. The price bounces of the 50 E-Ma and comes back down to test 1.3131 after which we might have a break leading to a much further down move OR 2. The price breaks 50 and goes for Resistance of 1.3190 Or in other words the 100 SMA - colour coded pink, then R1 at 3223, then Resistance at 3252, 3293, 3335, 3364 etc.

These are just scenarios, as a trader you should always have at least 2 or 3 scenarios in order to prepare yourself psychologically.

Why psychologically you ask? Because �Fear� and �Surprise� two of the feelings we try to avoid are spawned by NOT Understanding and NOT being Prepared! If you are aware of something and you expect it as a probable occurrence, then when it happens it can�t surprise you, which in return leaves you calm, cool and ready to react optimally with a sober mind. That is all for now."

Regards,
E. Lang


Trade Update

Hello again guys.
As I mentioned today there were two scenarios. The first was that the price bounces of the 50 E-MA on the 30 Min Chart and comes back down to test 1.3131 Support.

I guess the small move, which I caught at 1.3145 was just a little breather and a last attempt by the bulls to take back charge before the bears get back to their inevitable test of 1.3131.

Either way from 3145 to 3171 was a 26 move. When RSI broke above 50 and the price broke 50 E-MA, I moved to a higher time frame H1, to gauge if RSI was going to break 50 on H1.

A confirmation of this would have been reassurance to stay in the trade, but RSI had no luck breaking above 50 on H1, rather the price was handled by E-MA 20 (Green) on H1, ending up with a shooting start (bearish). After I saw that, I moved back to M30 and closed my position when the price came back down at .3165 for a 20-pip profit (ENTRY 1.3145).

I SQUARED at 3165 with twice as many lots as I Entered the trade so I could go short immediately at the same price 1.3165 as I determined a fall back down to try and retest 1.3131.

Now, I don�t want you to get confused, the system works, but I am used to it so in a lot of cases I know when to enter the trade before the signals show up. The more you use it the better you will get at being able to predict a 5/10 Crossover before it happens. You will also notice that I�ve implemented Support Lines (1.3131), Candlestick Patterns, Multiple time frames and simple logic to get bet results.

Try and educate yourself in different areas, so you can see more every time you look at the chart. It is crucial if you want to trade better.

Now I am just going to sit back with my short from 1.3165 and hope for a retest and break of 1.3131 Support, also watching the System Indicators and MA, RSI, Stochastic hints.

UPDATE:

As you can see guys, the retest of 1.3131 definitely happened and Scenario 1 was confirmed. All in all with trade 1 and 2 today we�ve manage to bag about 90 pips, which isn�t too bad for a few hours you might agree, no? :slight_smile:

I know I entered a little earlier on the first charts above, so I posted another set of charts which shows WHERE you should have entered using my system, either way you would have still made about 50 pips today if you went only with the second trade (Short) and well above 50,60,70,80,90 if you shorted where I did around 1.3165 on the first set of charts.

I would like to take the opportunity here as well to emphasize on the importance of multiple time frames when using a system like this. When both a fast and slow time frame confirm crossovers - it is an all go situation so try and gauge things on a multiple level in order to better determine a more accurate course of action, whether it be
Entry, exits, position addition etc.

Regards,
E. Lang


TRADE UPDATE:

Well there we have it… a perfect example of what the news can do to you. If you got caught in this newsbreak, you got it bad.

Always keep up to date on news releases and try and exit your positions before they are released or you will eat dirt!

In any other case, I would have held this position as everything was pointing bearish, but knowing CPI is coming out the smartest thing to do was take a hint front the Indicators and try and exit with the most profit.

Signals:

  • MACD Crossover
  • Stochastics Oversold Zone BREAKOUT
  • RSI had broken over 30 and was actually up to 50
    instead of its initial direction of back down to 30
  • That’s all for today folks - if you followed through with this from the start you may have bagged at least 20 to 65 pips - Not bad for a days work

As an experimental trade relying on Dows theory, that the news can’t change the majour trend, i’ve shorted at 1.3180 - i still believe the bias is still bearish here.

So we get a mysterious white package in front of the white house and not so hot of a CPI, so what ?
Let’s see what the forces of nature can do for this trade :slight_smile:

I will let you know how this experiment goes.


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?

Yes, I trade with it on both my live and demo accounts, i try and enhance it on my demo account every day, where as i adhere to strict rules on my live.

The results are promissing as you can see in the trades logs in this thread.

The experimental positionentered at 1.3180 has gone great so far and it just goes to prove that D. Jones was right when he said news can�t change the market trend. After having digested the news the price has moved back to its previous bearish plans.

Previous Supports have been broken and thigs are looking very well.
Being the end of the week, i�ve set a Trailing order with a 30 pip stop, so i am just going to let it run.

My thoughts are that the price will most likely try and test 50 E-MA on the daily chart, till then i will have a good profit and have nothing to worry about.
Overall today has been a great trading day with over 60 Pips profits locked in and over 100 trailing with a 30 Stop Loss.

I will see how things look on monday, but either way my legs are kicked up and i�m happy.

Please view the attached image.

Regards,
E. Lang

PS: More on Monday! (Dont trade Sundays)


If you can, can you please clarify the purpose of the other 2 EMAs? What is the purpose of 20ema and 50ema. thanks

Dear RamRocket,

Kindly take a look at this thread: http://www.babypips.com/forums/showthread.php?p=1067#post1067

I feel it may be able to answer your question.

Regards,
E. Lang

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

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

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 :smiley:

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 :slight_smile:

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 na�ve 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/attachment.php?attachmentid=71&stc=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/attachment.php?attachmentid=74&stc=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.

- - - - - - - - - - - - - - - - - - - - - - - - - -

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

http://www.babypips.com/forums/attachment.php?attachmentid=76&stc=1&d=1166433360

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

Regards,
E. Lang




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.

[B]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.[/B]

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

[B]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.[/B]

  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

[B]I’m sorry i do not understand what “ebb n flow” is ?[/B]

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

[B]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[/B]

  1. 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)

[B]I agree.[/B]

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

[B]MACD will give you a good “early” exit hint, but you need to combine it with RSI to guage the “optimal” exit.[/B]

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

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

[B]To profit from it, you just need to practice with it. That is all.[/B]

[B]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.[/B]

Regards,
E. Lang

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/attachment.php?attachmentid=77&stc=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/attachment.php?attachmentid=78&stc=1&d=1166438232


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/attachment.php?attachmentid=79&stc=1&d=1166438402