Some of my thoughts + Trading System

Hey Guys,

I need to leave the office real quick, so i wount be able to post a final update for today.

Just wait for a good 5/10 Cross on M30/H1 to open up and hold the position till you get a reverse 5/10 cross or you determine through other methods that you need to close your position.

Thats all.

I will update tomorrow on how this worked out.

Regards,
E. Lang

Long:
Stochastic must NOT be over 80 (Overbought Level) and MUST be HEADING UP.

Short:
Stochastic must NOT be less than 20 (Oversold Level) and must be HEADING DOWN.

Any other stoc behavior other than these which will help us regarding stoc analysis on this system?

hello elang

first many thanks for your great work on this thread , i have read all your comments ,now i think its time to send a lot of suggestions to your system, look at my screenshoot.... you can see the trend-channel ...its a indicator for MT4 named SHI-channel it`s very helpfully
second …you can see RSI (blue= RSI 5 , yellow=RSI 10) …i have only attached both to see the difference of it … i think the RSI 5 did quicker go conformable with the rest of indicators …what do you say about?

question:
have you advised to automat your system with MT4?

sorry for my bad english …

thanks for all your work and suggestions , i hope we can read you longer here

regards

guenther

Dear Guenther,

Thank you very much for your contribution.

I have seen the difference with a lower RSI. It is a little more aggressive, although a trader that felt more comfortable with that could easily implement and still get similar results.

That is good observation.

I did think about automating the system but i dont know how to script in MQL, so it is just an idea for now.

I did not understand what you were trying to accent with the SHI-channel ?

Thank you!

E. Lang

Elang,
In a good trend the stocs can be in the OS or OB zone. Do you just stay away and set on the sideline until the stoc broke away from these zones?

Right on Ram!

When they are in OS or OB i just cruise it and make sure the EMA Spread looks healthy, with no particular bunching.

In some cases if you are a more aggressive trader or you missed the entry, you can enter in the OB or OS zone but its good to make sure before you do so, that you have a good EMA Spread visible + RSIs’ condition and of course logical R and S on the chart.

But yeah, you got it!

Regards,
Effiong Lang

Elang

Do you set your EMA on the open, close, weighted or doesn’t it matter.
Thank you for sharing your system and knowledge it is very helpful.

Paul

Hi Elang:

You are an intelligent person! What is your educational background? I’d swear you were in your 40’s or more by the wisdom you’ve transfered from your brain to the keyboard. Very impressive, and you’ve mastered the English language as well.

pwegner, I believe all EMAs are applied to price close. Anyways, that how I have set mine.

Question:
After EMA5 & EMA10 crosses and RSI crosses 50, what do you guys see as spread or distance between the 2 EMAs when you make your grand entry? 2-3 pips?? I usually want to wait for visible gapping.

Thanks Ramrocket that is where I have them set but was wondering what others were doing. I have not use this system long enough to comment on the entry point.

Hi PWeger:

For what it’s worth, I also set my EMA’s and SMA’s to reflect the closing. As best I can tell that is essentially the norm.

Hello guys,

Happy New Year to everyone!

I’m sorry for not writing for so long, but work has been very hectic the past few weeks, plus I’ve been spending a lot of time optimizing my system for better results.

Let’s see what GBP/USD is up to.

Price consolidation from the high of .9846 took us as far as .9750, it tried testing it a couple of times producing two candle stick stars, all and all you should know that dojis and stars around major R and S are good reversal indicators, so on its own just with that you should start becoming weary.

Now as I mentioned before, one confirmatory factor is not enough to let me trade enter a trade, so we need to look for more evidence and lets see what we can find…

  1. Dojis / Stars at .9750 (Price consolidation high from .9846)
  2. We see a 5/10 cross around the .9730 area (H1)
  3. PAR SAR confirm the down move
  4. RSI is below 50
  5. MACD is below 0
  6. Stochastics are looking fresh
  7. Trend line was clearly broken (the white ray)

As you can see we have a lot of factors and as in any strong move, the white 5 ema cuts right through the other emas like a hot knife through butter, these are all very good signals.

So what are our targets here ?

  1. First major Support at .9632
  2. Second major Support at .9565
  3. Third major Support at .9450
  4. If we break .9450 then it’s a whole new bearish world down there, much of which we can discuss later should such a scenario be confirmed

Talking about scenarios once more we try and avoid becoming surprised so we assume there are more than one scenes available.

  1. Is what we just talked about up there.
  2. Price bounces of .9632 (S1) and retests .9750

I very much doubt scenario 2 due to the strength of this move, plus look at the emas we don’t even have a clear spread yet, which leads me to believe there is more to come on the downside.

You will notice I’ve made a few additions and changes to my charts.

-I’ve added a few more emas. I now have 5,10,20,30,40,50. I added 30 and 40 not so much because I need them, but more of a visual aid.
-You will notice I’ve added horizontal lines at each 50 pips. The reason I’ve done this is because my experience tells me the price always moves 50 pips, as long as you can determine the move direction and catch the break out you will always be able to bag the 50 minus the breakout pips, so lets say at least 40. It’s strange but it works, in fact even if you scrapped all TA and just determined the trend direction and bough and sold at each 50, you bag at least 30-50 pips. Another factor here is that every 50 is almost always a significant support and resistance level.
-I am testing RSI levels of 7 and 9 at the moment, 7 seems to give me very good flexibility in catching tops and bottoms for the moment.

Anyway. From what I can see now as I’m writing this is that the price is correcting of S1 .9632. I think that .9650 or .9660 (10 EMA on M30) will handle the price after which we can aim to follow the bearish scenario.

Now as I’ve said before. We do our TA the best we can, we enter our trade and then we monitor to see if we were right or wrong, there is always only two outcomes here.

Minimize your Stop Loss value every time you can and the more the trade advances in your direction.
Preferably move your stop loss to your entry so you don’t loose anything even if the trade goes against you.

That’s it guys, I’ve already bagged my 50 pipos for today.
I will wait for the retrace and eventual break of S1 before I enter short again, in which case I will be targeting .9565

Regards,
E. Lang

PS: I use Exponential EMAs calculated at the Closing price.


Hey Guys and Girls :wink: ,

Quick update.
Perhaps meaningless to some, but i wanted to show you how important it is to draw trend lines.

Whenever we get into consolidation or a retrace the first thing you should do is draw your trend lines so you can determine when best to enter of the retrace bounce.

Please take a look at the chart i’ve attached.
As you can see i’ve gone down to the 5 minute chart to get the best entry point. Like i said before i closed my position out around S1 and said i’d wait for a proper break, and when i say that i mean that:

  1. Price breaks decisively through S
  2. Retraces upwards
  3. Breaks back down below the new low (formed due to the retrace)
  • This is what i call a checkpoint. The price leaves checkpoints here and there and thats where we have our critical R and S levels. When we have a rally or a decline, the price will retrace and create a checkpoint.

Think of it as saving your progress in a video game, this way if you die you know where you have to go back to (your latest checkpoint) and if you continue moving onwards, you know where you have to create your next checkpoint eg: end of level or mid level (in other words the next R or next S)

Hey, thats how i think of it :slight_smile:

Regards,
E. Lang

PS: Also notice how 5 EMA and 10 EMA handled the price so gracefully, like a ballerina doing the swan dance. This is a good signal signifying a healthy move.

PSS: We also have the next 50 pips coming ahead (.9600), we may expect some sort of a checkpoint to be ceated there, if this all works out we will run for .9565


I just noticed something a little bothering which i overlooked.

There seems to be a visible uptrend going on here and 9600 is sort of the next S.

Do take a look at the attached chart.

It will be v. good news if we break below that, im sure there are some stops below that, which would fuel a heavy drop.

Heads Up.

Regards,
E. Lang

UPDATE:

We are looking for a break of the lower trend line on the M5 Chart to revive the drop back down.

Check the first attached chart for the update M5 S and R.
The second chart is an answer to the reason why .9600 is being a female dog :slight_smile:



Me too +52 pips on USD/CHF.:slight_smile:

Hey guys,

Here is the breakout update.

You could have sold when the price broke out of the trend line to bag a good 10 pips just there.

We need to break .9593 however to move our crosshairs back to .9565 followed by .9450

Regards,E. Lang
PS: Great trading Ram! Happy new year to you!!



Good morning guys,

This is where you entry should have been today, once again using simple trend line techniques plus RSI/Stochastics you could have pipped that trade like a ninja and got in on the break straight off the bat.

My entry: Short @ .9508 (at the trend line break M5 Chart)

All you have to do is watch for a trend line break and thats it… Kabooom…

Don’t forget to watch your EMas.

The sentiment is that this retracement will terminate at 50.% or 38.2% of 1.8836 to 1.9846 which we just broke before resuming the rally to break 1.9846, thats the bullish scenario as well.

As i always say keep more than one scenario open.

If it breaks (50.% of 1.8836 to 1.9846) at 9340 then things will turn bearish and if 61.8% is broken you are in an all new secondary bearish trend.

So just keep your eyes open for now.
If you’ve been paying close attention you would have already bagged your 50 pips for today.

Easy as pie.

Regards,
E. Lang

PS: Watch out for the next 50 at .9450, the price might decide to leave a check point there and save game progress :))

HAPPY NEW YEAR!


stopped out this am eur/usd -15 pips
stopped out this am usd/cad - 15 pips
still open on the cable from london session +69 pips so far on 1D chart. Will see how today goes.

Hey Elang,

I see you are using new parameters on RSI, MACD, Stoc. How are those settings working for you?

They are doing great RAM, in fact im a lot more satisfied with these than my previous values for now.


GBP/USD Update.

Good morning everyone,

As i mentioned yesterday the overall sentiment was that this decline would be terminated at 32.8% or 50%.

We managed to break decisively through 32.8, but 50% is causing a problem.

Notice how at every 50 pips the price stopped to create a checkpoint, this way if the decline is terminated and the price starts rallying it already has predetermined destinations to check on the way back up.

I’m trying to break this down into a simple logic so you can understand things, the more you simplify and accept things for what they are the easier all of this pipology will become to grasp.

So whats happening now. This can be a scary point for a lot of begginer and novice traders, so we had a great decline but what now. You hit a dead end and you don’t know what to do…

Rule 1, if you don’t know what to do, close all your current positions and sit on your hands to do some TA.

Lets try and draw out an overall bull/bear bias for today with the available factors and data at hand.

H4:

  • We have a clear bounce of .9350
  • We have a possible morning start forming, we need a bullish engulfing candle close on H4 to confirm that. If this happens we have a very strong reversal candle stick pattern
  • RSI is under 30, with visible previous attempts for a break above 30 which ended up in bearish rejections… now however a break seems to be coming up.
  • Stochastics have broken out over the oversold zone

All in all these are bullish signals.

Upside targets are 9400 > 9450 > 9473/8 > 9529 > 9500 > 9565 > 9750

Downside targets are 9350 > 9300 > 9222/00 61.8% > 9180 > etc. etc

Thats pretty much it.

From what i can see while i was writing this is that we are getting a good morning star formation on H4 as i mentioned before if we get a good close, im sure we will see a lot of big candle stick players kick in to help through some fuel in the bulls fire.

My bias is bullish, as we’ve broken previous higher highs on m5, m15 and have create higher lows on the new upmove, as long as this continues its all good.

Not much else i can say for now i guess.

Regards,
E. Lang