in this thread i´ll post my MMTT system in a very clear and understandable way (as much as my bad english allow it)… this way everyone interested in learn it just need to read the first pages.
i´ll explain it in a way that every fresh newbie will understand so most of the older newbies may call it boring.
first for scare any interested person i´ll do a small introdution of ´me and the system:
INTRODUTION(:D): i´m not a seasoned trader, not a pro, not a expert or someone with a lot of reading about the subject… i just a poor guy with a normal job that one year ago doesn´t even know forex exists… that´s the biggest reason i can give you to try this on demo if you want to try this system. but i´m doing ok with it:D
and now another scary truth: WITH THIS SYSTEM YOU´LL HAVE A LOT OF LOSSES, PROBABLY MORE THAN WINNINGS. scared already?? well follow all the simple rules and at the end of the month you´ll have a nice surprise… maybe a big nice surprise.
basicly this system is a countertrend trading system and a nonbrain trading system.
it´s called countertrend trading because i only trade retraces oF the current trend. of course some of those retracements in a small timeframe are in fact the continuation of the trend in a higher timeframe(TF) but anyway i trade retraces of the current 5min trend. so this is countertrend trading.
it is a nonbrainer system because basicly we don´t need to do any technical or fundamental analysis of the market to trade it. no S&R, no fibs, no pivots, no nothing of those things pros use and that make them richs… so with this system all you need to know is open a trade, set the SL, change it at any time and close a trade.
WHY COUNTERTREND???
the aswer may not be very technical but is my opinion…
everytime a look at a chart i can´t tell if the existing trend will continue or not. i think no one can do it… it´s impossible to predict if a trend will continue or not.
BUT… i can tell you without a doubt that there will be a retrace on the price action, no metter how strong is the existing trend sooner or later there will be a retrace. i don´t know when, and i don´t know for how much pips, but i know it will happen. the problems is: HOW DO WE CATCH IT:D
i also recomend a broker with no sunday candle. Alpari.uk is the only one i know… probably there are more. you can do like me and keep the eyes on that broker platform and them trade in your own.
the settings for bbbandstop are: 10;1;1;1;1;10000 you can change the orange colour to red too.
the mtfmovingaverages settings are: first: 1440;3;2;2 colour blue the second: 1440;3;3;2 colour dark pink.
the blue horizontal line is a dailly linear weightned Moving average with 2periods aply to high.
the pink horizontal line is a dailly linear weightned moving average with 2 periods aply to low.
the red dots and the green dots are a diferent representation of the normal BolingerBands with settings 10:1. the red dots appear when BB is pointing down the green dots appear when BB is pointing up. a easier way to look at a BB.
we will use those 2 horizontal lines as two different things: first they will be our support and resistance lines. second they will be our overbought and oversold zones.
so by the basics rules of trading we should look for a sell oportunity at a resistance line when price is overbought; that will be our blue line. and we should look for buy at a support line when price is oversold; that will be our pink line.
so when price touch or cross the pink line we will look for a buy setup, and when price touch or cross the blue line we will look for a sell setup. this is the first condition for having a setup: price must get out of the channel created by those 2 lines.
this is the timeframe i use. advantage: faster entrys with lowers SLs. disavantages: a lot of fakeouts and whipsaws. (there´s no perfection)
WHAT TO LOOK AT THE 5 MINS CHART.
all we want to see in the 5min chart is a price action pattern that is called higher low/ lower high (HL/LH)
this is something you can easly see in any timeframe and at any pair at any time… unlless price is in consolidation and moving sideways. (those will be our worst nightmares)
this is an egsample of the today eurusd chart. i had put all the HL and LH that happen today in eur usd. is easy to see them in this picture and understand how they look like. (most of the days it will not be that clear)
so in this picture the setup we are looking for is a setup to go long (to buy), because price had went outside the channel by the pink line.
and the signal to buy (the oposite for sell) is the formation of an higher low in the price action.
to catch this higher low we use the dot colors. you can see after the new bottom the price went up (green dots) then price had retrace (red dots) and them price go up again (another green dot).
that´s the entry signal. a swing in colors of the dots (green, red, green) and most important a formation of a higher low.
so we enter the trade at the close of the candle with the new green dot (only at the close of the candle) and we place the SL at the bottom of the previous HL. in this case is bellow that hammer candle above the “higher low” words.
and that´s the easy part of this system: enter a trade… now we need to see the hard part: minimize the losses and let profits run
first and most important: HOW TO CLOSE A LOSING TRADE
this will be hard to explain and maybe will be hard to understand by pictures and explanations but is very simple and all it takes is 4-5 experiences on your own to get it right.
1- we open a trade in the 5min chart and we set the SL in the previous high or low.
2- we only move our SL when the dots in the 15min chart turns into our colour. (green to buy, red to sell) that means we open the trade in the 5min TF, but them we will track them in the 15min chart. so if price hit that new SL the trade will be closed.
3- when price go against us before the 15min dot change the colour we close the trade if the 5mins dot change the colour against us.
4-when we open the trade in the 5mins chart and the 15min dots is already in our colour… we will probably lost… unless the 15min trend is already steady and clear we should avoid to enter this setupus.
ok!!! confused??? it tooks me 30mins to write this post…my brain is smoking:o
it was easier if i can do it in portuguese:D
i´ll post egsamples to make it more clear
this is gbpjpy yesterday. you can see the 3 trades i took.
1st one is a 7 pips loss in a trade with an original SL of 40 pips. that was a risk/reward ratio of 1:-0,17. that means if you risk had risk 1% of your account in this trade you would have a lost of 0,17%… that´s losses control.
in the 1st trade price follow the direction of the 5mins dots until the 15mins dot change the collour. after the 15min dot change colour i forget about the 5min chart and i start to use the 15mins dots as my SLs. in this trade that SL cost me 7 pips.
in the second trade i lost 18 pips with a original SL og 35 pips. that was a 1:-0.5 rr ratio. in this trade the 15min dots were already in the same colour as the 5mins dots and i´ve never won one of those setups.
in this case i set my initial SL at the previous low and i´d close the trade when the 5mins dots changed colour again.
in the 3th trade i made 120 pips with a original SL of 30 pips. that was a 1:4 rr ratio trade.
in this case i use the previous low as initial SL and them all i´ve done was trailing the SL with the dots in 15 min chart.
IMPORTANT: why this low is a higher low? because the previous high is a higher high. that means if the previous high had made a lower high we should not consider this low as a higher low.
i know is confuse:rolleyes: in the end of the presentation i´ll aswer questions:p
ok! i think i´ve covered everything you need to trade this system.
some more important rules/recomendations:
1-use a broker with no sunday candle
2-this works in london session, and it may works too in asian session but this one i don´t know.
3-i don´t open anymore trades after 4pm GMT time, for a lot of simple reasons, the most important is if you open a losing trade you´ll not have time to make the money back and if you open a winning trade it may last for hours and make you stay at the screen for more time than you want too.
4-forex is not a hobby!!! if you don´t have the time to do intraday trading this system is no good for you!!!
5-this works with a constant risk% of your account per trade. if you keep a constant pip value no metter what the pair and what the SL the results would be worst.
6-this will give you a lot of losses in a straight so keep your risk in a level that make you feel confortable with.
now that i´d scaried everybody, and made everybody runaway from this system i´ll post a link to the chat room where i use to be all day and aswer any questions. somedays maybe i´ll share my desktop with you live… if i´m in the good mood:p
i hope this helps someone making money and i´ll try to post some more egsamples of live trades that i take… i still need more than 300 posts to become a FX-honorary men:D
HIGHER LOWS AND LOWER HIGHS are one of the most powerfull tools you can use in trading.
even if MMTT don´t is suitable for you… spend some time looking at the charts and become a master in spot those patterns and you´ll be surprise with the potential of the beast.
use the bbbandstop indicator to help spot them and look at your charts to make an idea of the power of those simple things.
use 5m to scalp or higher to longer trades… and may the force be with you
I missed your MTF settings, actually this one is not even on my chart. I just go into the Daily in the morning, zoom in and set the 2 lines high and low according to your MA2 high and MA2 low (daily) then zoom out and over to the 5min chart.
Now I have to check out the MTF. Thanks
Rui
This is what I set the MTF, are you telling me now I don’t have to go first into the 1HR chart ?
The MTF is replacing the step to go into the 1HR chart?
I attach 2 pics with the settings, are they correct?
Thanks
Just noticed, not 1HR, 1Day and 1440 is 1 day. :o
Rui, got it, just compared.
MTF white lines, Yellow is my old one from your old system where you said to use a daily MA2 High, MA2 Low and then move over to 5 min chart.
It is a bit different then in the old thread.
Will follow the new system. Thanks
Thanks Rui for all your work. I’ll be testing this system, I think it fits with my personality. Unfortunately maybe I’ll have to wake up at 4:00 am to catch the London open and make some pips like you do! I don’t mind if it’s worth it.
I always wondered why you did not used bigger lots for trading. Obviously you have confidence in your system and it’s always profitable for you. You don’t have to answer if you feel it’s too personal and you have your reasons I understand it.
Up to date I already have 2 losses for -11 pips and 2 wins for 51 pips, and I saw that I missed a trade that I would have made at least 20 pips.
