I have been using this system now for 6 months. It has allowed me to enjoy the feeling of positive gains in my trading instead of the many losses I was getting. The system started with just the Moving Average (MA) indicators and following price action. I added other indicators to help hedge my trading by showing me when a possible trend reversal or a breakout was going to occur. After much testing, I found success by keeping it simple. I paired up EMA with ADX.
The system works on any pair and time frame (TF) but for this submission, I have focused on EURUSD / M15. The M15 TF provided more trading opportunities than a longer TF. It was also less volatile than the shorter TFs.
The system uses EMA with a period of 9. I wanted a MA that would be more responsive to recent price action. The two directional indicators (DI+ & DI-) of ADX are used in conjunction with EMA to establish your Entry and Exit points.
TF: 15 minute
Indicators: EMA9, ADX14, ATR14
Set a level of 20 on ADX14
Price is coming up from below EMA9. Candle Closes above EMA9
ADX DI+ > 20 AND ADX DI+ > ADX DI-
Price is coming down from above EMA9. Candle Closes below EMA9
ADX DI- > 20 AND ADX DI- > ADX DI+
Candle Closes below EMA 9
ADX 14 DI+ < ADX 14 DI-
Candle Closes above EMA 9
ADX 14 DI- < ADX 14 DI+
Set your Stop Loss to the value of ATR14 at the time of the order placement.
If using a Trailing Stop, set it also to ATR14.
Set your Take Profit to 1.5 to 2 times ATR14.
Risk = 2% of Free Margin
The chart shows a trade I performed on 2/7/2012 that allowed me to capture 81.2 PIPS.
In case the image is difficult to view, I have created a PDF of this system which includes the graph.
at first i wanna say a loud thank you for sharing your system with us, really it looks promising, and i uploaded it in my chart, lets see how far can i run in demo with this, and the main reason of mine reply is : i personally like to trade on longer time frame specially 4H, so can i use it on 4H ? if so then will u suggest to change any setting or just stay with the basic parameter as u said earlier ?
Thanks a lot
@cda08 - When you change Time Frames (TF), the ATR14 values will change. This would change your Stop Loss/Take Profit/Trailing Stop values in line with the longer TF. Other than that, the Entry and Exit rules still apply. However, you are welcome to test it out and made any changes that would fit the way you like to trade. Let me know what you find out.
A little clarification concerning ATR14 for those unsure on how to use it to get your Stop Loss value.
The indicator reads out in decimal format (i.e.: 0.0019 => 19 PIPS). I would take this and subtract it from the Bid Price to get my Stop Loss on a Long trade. On a Short trade, I would add it to the Ask price.
......Let me know what you find out.
Happy Trading to All!
I wanna know a few questions, may be my questions sounds like a stupid but I really wanna be stupid when it’s the matter of understanding new thing for my brain, well here my qus are: 1. What you suggest when situation comes like this light color boxed in the picturewhen the EMA 9 and candle huging allmost each n every moment.(please look at the pic just below ) , what you suggest to by pass that kind of situation ?
2. Some times ADX Signal Line (not +/-DI lines) stood near 19 point something and +DI just near to 20 mark but not 20 and -DI lower than +DI , and candle meets EMA condition for long what u suggest? Enter for Long at moment like this?
(and yes for short entry too with opposite of =DI and -DI position marks,,but getting answer of long will help me to figure out what to do when it will be short)
3. Do u strongly prefer to stay ADX signal line (not +/-DI lines) to hover out above 20 when taking Entry ?
I saw some cases when ADX Signal line downtrending from 34 to 26 to 22 to 19 and at that moment -DI comes to 20 mark left +DI at 14 or situation similar like that, what to do then?
4. Lets see the picture below,
according to my mt4, Marked candle's Details are
the 1" marked candle = Opened 1.2955, closed at 1.3020, the EMA was 1.2988, ADX Signal 31, +DI 19, -DI 16
the 2" marked candle = Opened 1.3021, closed at 1.3034, the EMA was 1.2997, ADX Signal 30, +DI 24, -DI 14
if i took Long at the open of the 2" market candle then it going into opposite direction and at that time my S/L was 49 as per ATR value, and it was taken by the 4th red candle from 2' marked bar.
**I know Every system has its own profit and loss segment, here my intention is not to attack u by telling that it goes wrong but i truly wanted to know if you know any remedy to overcome this situation or not?
*No bad intention indeed. Just asking for safety reason. please don't take me wrong.
5. Now plz look at 3" and 4" marked candle, there 3" marked candle shows all okey at a glance but there -DI is 24 and +DI is 22 so as per ur rules when taking long +DI must be =/>20 and > -DI so i left that candle, now can i take entry at the opening of 4" marked candle ? here +DI 30 and -DI 21
and in both 3" and 4" cases ADX signal line stood over 20 mark. candle closed avobe EMA from below.
Now please tell me and clear me step by step with mentioning my respective questions along with your answer.
THANKS at Upfront and friendly hug for you.
Edit and Added line:
Help me to find my answers plz............
its really a good system and i wanna know as deep as possible
Last edited by cda08; 02-08-2012 at 01:17 PM.
Reason: help me to find my answers plz