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1

Greeting All,

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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.

Chart Setup
Chart: EURUSD

TF: 15 minute
Indicators: EMA9, ADX14, ATR14
Set a level of 20 on ADX14

Entry Rules
Long Entry:
Price is coming up from below EMA9. Candle Closes above EMA9
ADX DI+ > 20 AND ADX DI+ > ADX DI-

Short Entry:
Price is coming down from above EMA9. Candle Closes below EMA9
ADX DI- > 20 AND ADX DI- > ADX DI+

Exit Rules
Long Exit:
Candle Closes below EMA 9
-or-
ADX 14 DI+ < ADX 14 DI-

Short Exit:
Candle Closes above EMA 9
-or-
ADX 14 DI- < ADX 14 DI+

Stop Loss
Set your Stop Loss to the value of ATR14 at the time of the order placement.

Trailing Stop
If using a Trailing Stop, set it also to ATR14.

Take Profit
Set your Take Profit to 1.5 to 2 times ATR14.

Money Management
Risk = 2% of Free Margin

RLGL.jpg700×283 52.6 KB

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.

Happy Trading!

RLGL.pdf (334 KB)

1 Like
2

I’ll give it a try and let you know my opinion…

3

Dear vincejg327
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

4

thank you very much for sharing this brilliant stuff…cheers…

5

@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.

Happy Trading to All!

6

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.

Happy Trading!

7

Hi, this system looks really interesting, so Ill give it a shot :slight_smile:

Do you have any statistics for it? Win/Loss percentage and average risk/revard?

Thanks :slight_smile:

8

Dear vincejg327
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
thanks

9

The system looks like it has potential.
I’ll demo it and give you my feedback.
Thanks for sharing!

10

I found that the 9ema is a better stop than the ATR!

11

I agree that it is. However, I added the ATR to address traders concerns about placing SL & TP levels. I watch EMA9 and ADX14 DI+ and DI- for when I need to close the trade. I also act on the recent closed candle and not what is happening on the current candle.

12

When price action is hugging the line (Ranging) I usually do not enter the trade. In those cases, I have seen that my entry requirements are not met.

I looked at the same TF and Period and noticed our chart is different. Each broker has slightly different data they provide or so I have been told. I have attached a copy of my chart showing the same TF and Period you have referenced.

EURUSD 4H.jpg700×426 67.3 KB

@29 Dec 20:00 Candle Close - Close > EMA9 but DI+ (Green) is below 20 and still < DI-. It generally stays this way until 1 Jan 20:00 where it closes below EMA9. However DI- is still below 20 even though DI- is above DI+.
@2 Jan 00:00 Candle Close - Close < EMA9 and DI- looks as though it is at 20. A closer look shows that DI- is 20.2251. For me, that is still at 20 and would wait for the next candle. If you can’t make it out, then wait. This is not a race.
@2 Jan 12:00 Candle Close - Close < EMA9 and DI- is visibly > 20. I would enter the trade. However, the market turned and went up. I would have closed the trade after the candle for @ 2 Jan 20:00 closed because DI- was < DI+.
@3 Jan 00:00 Candle Close - Close > EMA9, DI+ > 20 & DI+ > DI-. I would enter long @ 1.29721 with a SL @ 1.29381. @4 Jan 0800 Candle Close, I would close the trade due to Close < EMA9 & DI+ < DI-. The close would be about 1.29795 for a whopping 7.4 PIPS! This is another reason I like shorter TF. I have more opportunities for Entries and Exits.

I hope this answers your first question.

Happy Trading!

13

I do not consider the ADX Main line when I decide to Enter/Exit my trades.

Happy Trading!

14

Again, I do not consider the ADX Main line. If you see a pattern to utilize it more effectively than I have, please let me know. However, my intent was to provide a simple system without it being drowned in numerous signals so I could possibly catch a trade that could rake in a few more PIPS.

Happy Trading!

15

Again, I prefer the shorter TF. A possible adjustment in this case would be to increase the Stop Loss. But, what increase would be acceptable to a trader? What is their risk tolerance? Would it be enough to even keep you in the trade? I would consider a Stop Loss of 2 times ATR14.

Happy Trading!

16

[B]5. [/B]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.

At your Candle 3, it closes above EMA9. Is DI+ > 20? You state it is @ 22. However, your chart shows DI- > DI+. Therefore, you do not meet entry signal. You would need to wait on your candle 4 to enter

On my chart for this TF and period, my candle 3 closes > EMA9. My DI+ > 20 and DI+ > DI-. I would enter the trade.

Two different outcomes while following the same rules.

Do not try to force a trade when a trade is not there or is borderline. There will be plenty of chances for a trade to happen.

I hope I have answered your questions.

I welcome all feedback concerning this system.

Happy Trading!

17

Vince,

Many thanks for sharing. Below is my first live trade using the system (very small account).

For a short entry, everything looked in place until the next candle started, at which point the ADX- dropped below 20. I had already pulled the trigger, as the previous candle closed below the 9EMA.

Would you also wait for the ADX indicator to line up on the new candle, or is the end of the previous 15 minute period the entry signal???

I hope that makes sense, it sort of does to me?!?

Thanks in advance.

GG

gu15m.jpg700×525 32.8 KB

18

What can I say, either by sheer luck or by design of the system, my first two trades came good at 1:2 risk to reward!

Happy days. If nothing else, this is an excellent exercise in trading discipline.

GG

19

Hi GG,

I use the most recently closed candle to determine my Entry and Exit. The attached snapshot should help.

RLGL2.jpg700×358 31.2 KB

If the trade goes against you, then either close it or let it play out. I usually have it go until it hits my Stop Loss. Numerous times it came close to the Stop Loss only to turn around for a gain.

Happy Trading!

20

OUTSTANDING!!!

You are right about discipline. This is why I like a clear, drawn out system. It should force you to rely on its rules. However, no system is perfect, least of all mine, or works in all market conditions. That is where you experience and intuition comes in to help you.

I am glad you had two trades that were gainers. I wish you more but be prepared for some losers.

Happy Trading!