Ema Step System.

[maurizio77]

Hi There,

I am pretty new to this, but so far i have found just two systems that work for ME.
The first one i use is the EUR/USD 45 pips a day system that was posted by James. I haven't ever actually got 45 pips from this system, but 20-30 is common..i trade $4 pips currently, so it adds up to about $2K a month....I owe James a ty for that

The second was one that i stumbled across when i was "playing".

I don't like complicated systems, as i find it slows me down at the most crucial moment and i end up missing pips and getting a bit frustrated.

I liked the EMA systems i have seen, but all too often they cross half way down a major move, and you end up catching the "tail" of the trade, or at worst, end up entering right at the point of a retracement!!!

I would not say this is a Holy Grail and it is not perfect. I have worked out that i win about 4 out of 5 using this system. But the winning trades are always much larger than the losing ones.

Anyway, let me know what you think...

So after playing about and watching the results, the closest to the move i could find was this;


Ema5 (White)

Ema1 (Yellow)

I have RSI (14), Slow Stocs (14, 3) and CCI (20) up too, this is just my preference, i use it to try and predict when a cross-candle will appear.....for this system i don't really need them.

I use this mainly on GBP/JPY on 15m, 30m and daily. (Daily is generally the most lucrative and predictable but requires patience, it can sometimes seem a small reward for such a long wait)


This is what i do;

I will wait for the Ema's to cross and for the timeframe on that "cross-candle" to have almost come to an end.
Once i have seen the cross, i am looking to enter as soon as the timeframe makes the step to the next candle, i will enter in the direction of the Ema cross.

If i am at my desk i will not use a stop ( i use a mental stop in this instance), if i am going to be away from my desk i will put on a stop of 3/4 of the cross-candle.
So say the cross-candle was 100 pips from OPEN to CLOSE i would make my stop 75 pips........if the cross-candle was 80 pips OPEN to CLOSE, i would make my stop 60 pips etc....

Take profits;

I tend to use a trailing stop, and as i use Oanda i have to do this manually. (unless anyone knows any different)

This depends on the timeframe you are trading on;

On 15m chart i use a trail of 10-15 pips, looking for an overall 25-40pip trade.

On 30m chart i use a trail of 10-15 pips, looking for an overall 30-50pip trade.

On daily chart i use trails of 25, 50, 100 & 150 pips, looking for an overall
2-300pip trade.

I just looked on my history and for my last 15 trades i won all but 3 using this system. 4 of those trades were on the daily and netted me over 200 pips each.

Let me know what you think,


Maurizio77

[Forex Ninja]

Hello Maurizio77. Thanks for sharing your systems. We appreciate you taking the time to write it out. May I ask how long you've been trading them?

[maurizio77]

Hi Ninja,

The 45 pips per day thing i have been doing since James first put up that post.........so since February at a guess.

What i like to call the "Ema step" i have been doing since the beginning of December.

I forgot to add on the last post that there are occasions where the price doubles back on itself immediately after the initial cross candle, this tends to happen alot near the weekends, some news announcements and in the lower timeframes...depending on what timeframe you are using......the longer the timeframe the less likely this is to happen.... but when it does happen this is easily "spottable" as the reverse cross candle crosses well before your stop is reached so you can exit the trade and wait for the next cross candle to step on.

I hope i am being clear on this.........i have never been the most articulate of people lol

[pippy123]

hi there,

thx for posting your system. I will test it out. but I am a little confused on how you came up with the SL. Could you expound on how you decide? Specifically the number you're taking 3/4 of...

[maurizio77]

Hi Sure,

I have attached a pic. This isn't the best example, but it is the first cross-candle i saw after reading your post reply.

The figure i take 3/4 (75%) of is the Cross-candle itself.

Now some profit-loss ratio traders won't like the look of this, as the stop can be more than the potential gain, however i would like to point out that i RARELY, if EVER let my trade hit my stop, you can usually tell if a trade is going pear-shaped waaaay before it hits your stop because the candle you entered on crosses immediately the other way, so i take a small loss on the chin.....and wait for the next cross....depending on the timeframe there can be from 1-20 a day.!!!!

The strength of this system, IMO, is that you can almost catch the very beginning of the movement so if it is a 30 pip movement.you'll probably get at least 20 of them.......and Yes it CAN flip the other way.......but more often than not this sytem catches the very beginning of a retracement too so you can get out early and minimise any loss on that particular trade.

At times you WILL lose on Forex, but you don't have to win all of the rounds to win the fight, just make sure you average better after 12 rounds then the market does.....How do you do this??......If a trade is going wrong get out!!!

Most people can MAKE MONEY on Forex, it's stopping it slipping away after you've earnt it that is the big problem.

Can tell i have just got home from work coz i'm jabbering...sorry lol

[pippy123]

ok, thx for clarifying

I didn't realized that you set your SL on the close of the previous candle- the percentage of that- now i understand...

I already made some pips on this system. I will let you know how i do, thx and thx for the pic that always helped that a lot too.

R

[maurizio77]

Hi Pippy,

Glad to hear you've made some money on it

I have posted my trade from today.

I didn't enter the trade i put up yesterday as it was just an example.

This one i have put up today i DID trade.

So had we entered both trades we would now be up by over 200 pips....and it's only tuesday!!!!

Happy trading

[pippy123]

thx again Maurizio

I will let you know how i am doing in a few...

happy trading to you too : )

[jborgesnm]

Maurizio77

I appreciate the time and effort to create this. Looks interesting and I will test this also. Very logical when the other indicators signal the reversal.

Thanks

JBorgesNM

[shandy]

Hi Maurizo. Like the look of this, especially for trading of the daily as it looks to work well. I've attached a chart to try and make sure I understand the system (pretty sure I do as it's very simple!). I've circled the last cross of the EMA's on the 14th March. Am I right in saying that you would wait for the open of the next bar i.e. 15th before enering the trade? Or do you ever enter early if it looks as if there is no way of the EMA's un-crossing? By the looks of things this would have pretty much been a break-even trade, and I guess we're now looking for the EMA's to cross again as they are pretty much on top of each other now.

(BTW, I'm using Metatrader which utilises GMT, so it looks a bit different to Oanda but the principles are the same.)