I had two good strategies which work good for me as short and medium term trader. one by mistake was posted in the wrong forum and now other i am posting in the right forum.
The strategy parameters are the following:
SMA 7 Close Just visual aid
SMA 20 Close just visual aid
SMA 65 Close just visual aid
RSI 45 applied to weighted close that is HLCC/4 and only level 50 with no fixed limits
Custom indicator MACD (12, 26 9) with level zero (Indicator attached)
4 hours for any currency pair
Entry Long and exit
when RSI crosses above 50 level and exit when it recrosses down 50
Entry short and exit
when RSI crosses below 50 level and exit when it recrosses up 50
The fuctions of SMAs and MC we will discuss during the course of discussion
please feel free to give your comments and evaluation with a purpose to improve it
Thanks and discussion is welcome
Please place your stops as per your currency pair, risk tolerance and time frame and for money management i have a formula which can be used which is as under(surely not my own formula)
Initial capital + (& x Lots)= amount where you can go to next lot
& is factor where you want to change to next lot
less this factor more aggressive money management is
more this factor is conservative money manage ment is
Larry Williams says it is the time that grows your investment and for that it is important to sit tight and wait for the growth, there is no short cut.
this system is sort of stop and reverse system and does not bother about market direction and volatility. it just tells when to get in and when to get out without bothering about the profits and losses and surely it is profitable. Moreover larry williams says that no one can ever give you the direction of market as simply God does not want us to know the future so by using this system you should always be ready to get in and get out as market conditions changes and your indicators tell you the same. strict discipline for rules would be the deciding game of loss and profit
This RSI on candle or bar closing basis and what mean by optmization
and those who have patience can plot RSI 14 close on the 15 M chart and can wait for the same to turn 50 level in the same direction and than can initiate position.
Moreover MC that is MACD will never take sharp turn so after initiating the position you can wait till MACD cross turns opposite only than exit if position behaves adversaly after initiating otherwise have smooth ride till system tells you to exit or you desired target is met.
I initially started with lot many indicators on the chart and than slowly and gradually have been assessing there uslessness and duplication and than been throwing them away. after lot of efforts i realized the trading fact that simpler is the better and more understanding as comapred to difficult one. This is my final strategy.
The MC indicator is not stoch but it is MACD. some one said for better trading try to concentrate on two time frames only for any currency pair and maximum of two indicators and that is really true and actual trading sense.
Last edited by PipDiddy; 12-12-2006 at 05:39 PM.
Reason: Improved readibility
MACD indicator shows two things at one time. one is the histogram once both line are above zero or below zero(for exact calculation please measure only short moving average crossing above or below zero line) and this forms the histogram and with those medium terms trends you can clearly see both lines crossing each other number of times thus making short term trend with little lag.
SMA are just visual indicators help and should not be used for entry and exit
so consider making your comfortable rules yourself that would be more appropriate as i have my own and may not be comfortable for you and if you want my rules i have no problem in telling them
you can also consider one more indicator that customized DMI which sometimes i also use
Thanks for posting this system.I have been demo trading for 2 years ,trying alot of systems along the way.This one i like alot ,currently 300 pips up on my first 2 trades using this system.The 4H chart i have found to be very good for me .
The beauty of this system is that it does not care for market direction and those high sounding words like consolidation , breakout and all that imaginative stuff. it just tell you when to ride and when to dismount irrespective where it is going and how long or short it is going. This system will be having losses difinitly every system does but control them through money management both in lot size and stop loss but surely do give some breathing space to market keeping in view currency pair and time frame.
I always take three trade in arow for a particular currency pair may be any 1st trade signal
when trend and MC cross in the same direction. This is the trade where i always look for double the stop loss profit and exit if adverse signal has come before the target is meet 2nd and third trade signal
when RSI crosses 50 level 2nd and 3rd trades are taken. 2nd trade profit almost 1.5 of the stop loss and third trade to be exited when exit system signal is provided by the system it self
i have made these rules in order to get maximum out of the trades versus price action before it gets worse and goes against you .More over three trades concept has been incoroporated in order to overcome the indicators inherent weekness. 4 H timeframe absobes maximum shocks of fundamental news except few and provides an opportunity to stay in the trades in case of sudden shocks and save you from indecisiveness. Rules have flexibility depending upon price action and can be used discretionarily as i dont beleive in strict use of rules as price action always supremes high in making trading decisions.
Please keep providing your in put for everyones benefits and this will help us and others too in geting along in this world of chaos and confusion of trading.
Looking for constructive criticism from all
please be sure what one gives is what what one gets so please try to give so you become eligible to get by the firm divine rules
Last edited by hello1234; 12-15-2006 at 01:07 PM.
Reason: due to mistake in text
Please select one or maximum two currency pairs as this system is sort of stop and reverse for those whose brokers allow hedging the positions and good trending system for those whose brokers does allow hedging the position. i trade only eurgbp and eurusd and to the maximum gbpusd also as all of them are closely related to each other
I see very slow response of traders to this system as maximum seems intersted in day trading. If i have more capital to trade i would love to trade weekly charts because real and sure money is made in long term trading and not the day trading. Please every one reading must give your in put so that we can make it more better for everyone use.
as the discussion develops we can even discuss the signals for these three pairs for 4 H timeframes with this system
thanks lowiq for your interest
Who said that most are daytraders?
I really love how the market moves in 1m chart after news but that I sure love swing trade setups where hundreds of pips are made.
Which timeframe you suggest? I am afraid to say I still have difficulties understanding the system concept, maybe if you continue to post chart signals I can fully understand. especially this part 1st trade signal
when trend and MC cross in the same direction. This is the trade where i always look for double the stop loss profit and exit if adverse signal has come before the target is meet
2nd and third trade signal and Initial capital + (& x Lots)= amount where you can go to next lot
I am very interested in using your method, cause I only have daytrading method, and I would like to run micro trades that run for days and weeks.
I begin to understand this after reading again. but I have a small problem here. since my entry and exit is based on RSI, what to do when RSI turns below 50 I enter short, then it bounces again..or keep bouncing off 50 line.
sorry for giving generalized statement that maximum seems to be day traders
you can clearly see first sell signal on your chart and you can wait or RSI 2nd and 3rd signal
you must exit when RSI crosses 50 line what so ever it may be because when RSI crosses 50 line mostly it is the trend change
if RSI jumps up and down the 50 line than closely and clarly watch MACD slope signal which will not follow RSI to the Max and wait for its reversal only than exit but consider divegence from MACD as well
It would be much more better that you follow all three trade signal with this system and select one or two currency pair and control your losses through money management and that is very important. Future can not be predicted by anyone and we have to fish all that is possible. in the process we may loose or we may even miss the more than what we desired. there will be moments when pairs will be trending more than what you planned. in this situatuin you have two options. one re enter through signal of MACD and trend or RSI bouncing 50 2nd let it go as the cake is too large you will get your share next time