Good morning Shandy!
Thank you for the kind words, they are much appreciated.
Stick around i hope you will be able to learn more
Before i continue for those of you using my system. I have made a few updates to it, so if you use MetaTrader please feel free to download the attached .zip file.
It is virus free and it contains 3 files:
- Lang.tpl (this is a template file)
- ZigZag.ex4 (put this in Experts/Indicators)
- ZigZag4 (put this in Experts/Indicators)
What you will notice on the chart is:
5 EMA - White
10 EMA - Red
25 EMA - Green
50 EMA - Blue
The 5 and 10 we use for the crossover.
25 and 50 will indicate possible changes in the direction of the price and S and R zones.
With the template loaded you should have the Zig Zag indicator on your chart.
We will be trading only on H1 and H4 from now on, because as much as i love it i’ve decided that i earn money to live and not live to earn money.
Hence i will be trading about an average of 10-15 trades per month, leaving me more time to do stuff
Now my system pretty much remains the same as you will notice, but i’ve added a very interesting indicator that has been helping me out a lot recently - The ZigZag.
Everyone knows what a zig zag is, it moves up then down and up then down again… what we want to do is…
LONG - when the zig zag moves up and closes with a few candles, to solidify the rise
SHORT - when the zig zag moves down with and closes with a few candles, to solidify the decline
Meanwhile what you can do, is keep an eye on your RSI and your 5/10 crosses.
I have been using RSI a lot in the past 7 months and i have understood that its not as simple of an indicator as it looks. With time you will realize too how powerfull RSI is in predicting price movement and hinting as to what is a major move and what is fluctuation of a major move… it’s a wonderful indicator … embrase it.
GBP/USD
Price action from the low of 9260 has taken us as far back up as 9661 (current)…we have broken through all major resistances and for now the horizon is clear with a head on collision imminent with 9750.
As long as the price remains above 9531 our bias remains bullish.
A break below 9531 will turn things consolidative first, which means we may enter a funky channel with hopes for a break out of it to resume the rally towards 9750 or it may break to the downside to decline to 9452, which needs to be broken for the bears to take power and attempt a retest of the lows respectfully 9315 > 9260
A decisive break above 9750 will put us in the clear for 9850.
For now on H4 i am holding my long position untill i see a bearish Zag with a few candles closed to confirm a turn around
I will call the Bullish zigzag line breaks Zigs and the Bearish ones Zags.
At the point we are at… a lot of people can get confused…
A lot of traders know that if you sell when RSI is around 70 and Stochastics are in the overbought… that you would most likely profit hansomely… and even if you didn’t look at the charts and just sold and bought on RSI on H4… you would make money…
BUT what if… like on GBP/USD H4 right now… RSI is over 70 and Stochastics is overbought… do you sell just because it is over 70 ?..
You could… but what you should do to confirm a good exit point is logical R and S on the chart… it is obvious that untill at least 9750… RSI will stay over 70 and so will stochastics… and there is more of a chance that RSI and Stochastics will start declining at a logical R than at any other point…
My point is… no matter what indicator you use… nothing can beat logical Ressitance and Support levels based on previous highs and lows of the market… These are the bigg mommas, these are where people sell, people buy… people place stop losses… If anything trend effective is going to happen its around these areas, so keep your heads up for them.
I have also added a chart for you to see how the zig zag indicator can help you with entry points.
The reason i have Entry and Exit Blue and Red circles overlapping each other is that you can short when you closed your long to get in on the reverse and vice versa.
Regards,
E. Lang
Desktop.zip (5.74 KB)