Hello greg and decee,
firstly please pardon my short reply as I am in a hurry. Secondly, thanks a lot for the interestnin testing the system. Thirdly, i do however curious what are your test parameters since you dont use the fiboo element of macfibo. The numbers looks fantastic. What are your targets, exits or SL? Thanks.
Thanks Sufian. The back test was mostly for a study of time of day to trade. I was attempting to understand which session or part of session worked best. I live in West coast USA and the London session is difficult for me. A couple of hours into
Sydney Asians seems to play out with the numbers pretty close to London. Would you agree?
I will continue to study the fib for targets. If you could review using fibs for stops that would be great. I typically set targets
using Donchian channels for support and resistance, pivots, and the typical range of move expected.
Right now a pressing issue is how to avoid false signals that often reverse to a winning trade. I use FXCM to trade and
ThinkorSwim for indicators. On the attached picture I have green alert arrows for long moves and red for short. These alertsare a study that ThinkorSwim offers on it’s platform that I customized for macfib (I have the signal programed to send me
a text message when there is a 5 ema cross of the 20 sma. Note on the attached trade the short signal is a
false signal that then reverses for a good long trade.
Deecee/Dave
So it looks like we live in the same time zone, I’m in Portland, Oregon. So most often I trade in the evening, as the markets open and into 6 pm PST and later around 10 pm PST I often observe the ema/sma cross. Of course the ear/usd is best, but I also like the nzd/usd,
aud/usd and surprising the eur/aud. Check out the ear/aud and see if you think it is pretty smooth.
I still seek a way to avoid false signals. Any ideas from any traders would be appreciated.
Greg
sufian,
I only did a half way test just to see if what greg got was kosher and my results were even a little higher.
I used fibs with the extension of 1.618, 5 ema, 8 sma and 20 sma along with a fixed stop loss of 25 pips
When the 5 ema crossed the 8 sma and then the 5 ema also crossed the 20 sma then I went back to the low prior to the 5/8 cross and ran the fib to the close of the candle after the 5/20 cross. sl of 25 pips, and TP at fib ext of 1.618. I believe this is what you have for instructions in post #1, or close to it. I used the TP at the 1.618 because I’m not sure yet how to recognize when price will go to the next level (2.618).
I’m trying to attach a chart to show what I mean. I’ve never attached a chart and am not sure how to do it, hope this works.
Avoiding false signals. Just a thought. I added a 50 sma to see if it would help me avoid poor entries. So far it is
inconclusive, if a trader only took long trades that were above the 50 sma and or the 50 was in an upward trend it could
protect against loses but the trader would miss some good trades.
The attach is an example of using the 50 sma along with the macfib set up.
Hi Greg,
a) Yes, sydney-asian onwards til asian close has very good winning ratios.
b) Identifying false signals have been everyone’s nightmare. Since I could remember, i’ve toyed with a lot of indicators… when I say a lot, i mean A… LOT… to help me identify false crossovers. In the end, I’ve learned to accept that there is no sure-fire way to actually identify, objectively with 90-95% accuracy, to determine one MA crossover is a false one. Though it was this study led me to introduce 127.2 fibonacci (incase most of you haven’t notice). I used to call this level as ‘little bugger’ as I identify it as the level that always prevents price from continuing. There are times however price failed to hit 127.2 before reversing all the way…
I prefer use basic S/R analysis to filter my Macfibo traders than using Stochs, RSIs, ADX, etc etc… and the S/R analysis usually daily high/lows, basic daily/weekly pivots or missed pivots… but not religiously. More than not, I trade whenever there is a signal, regardless of the ‘trend’ in the higher TF. I mean, what is ‘trend’ anyway? Everytime I tried to add ‘discretion’ in my trading, my results not as good as when I was being 100% mechanical… unless S/R analysis is part of the rule.
When 127.2 level is equal to S/R such as pivots or daily/weekly high and low, I will TP it there with no hesitation. HOw many times price continues/stops whenever that happens (127 = S/R)? 50-50… based on 1000 test trades/real trades. So you could add that to your analisys. Just a suggestion.
Unfortunately, i myself can’t find OBJECTIVE way to identify wether the Macfibo will continue beyond 161.8, 261.8 and so on. There is a SUBJECTIVE way though but that isn’t really how I trade. I dont like subjectivity. But if thats your thing, there are times candlesticks can give you an idea how strong the Macfibo activation going to be.
My one suggestion (i’ve tried this tens of times when I have all the time in the world) is this :
a) Perhaps when there is a macfibo trade, you don’t put TP at 161.8 right away but you might have to babysit the trade. For eg, in a long trade, as soon as price close above 127.2, you move your SL to Breakeven.
b) Then, when price close above 161.8, then you move your SL at 127.2, now this time you’d be in a Risk Free trade.
c) When price close above or just playing around at 200.0 you could movve your SL to 161.8… and TP @ 261.8 (usually final destination)
Advantage of this way :
You could ride the wave
Disadvatange :
You have to babysit
You could end up more BE than profits (SL hits and continues to your direction VERY OFTEN)
I wish some of my old trader friends who uses this method could tell you, as proof, that I have tried this before… with many MAs… and 50SMA is one of them. In those days, I used to have two types of Macfibo CT-Macfibo (Counter Trend Macfibo) and WT-Macfibo (With Trend Macfibo).
For eg, if Macfibo buy activates while price is below big MA (such as 50sma), I will measure how much distance between PT A and the big MA. If below xx pips, I will not take it, or 161.8 is under big MA, then I will take it. Thank you very much for the post Greg, it reminded me this ‘old’ technique of choosing/filtering the trades. Perhaps you could try this. Though the most tested MA for this was 80sma (H4’s 20sma).
But again, the results, as you say, inconclusive, there are times when there is NO space between PT A and 80sma but price continues anyway… so it gave me ‘paralysis’… hence I dropped it. BUt you could try this… Up to you.
MACFIBO MONDAY ANALYSIS 19/3/2012
Price hit 161.8 right before weekend close, price now showing weakness (quite typical in Monday Asian session). I am not taking any trades now. What I am anticipating now is for the price to retace 38.2% from the most recent bullish Macfibo impulsive wave (thats towards 100.0 Macfibo, as highlighted) or atleast move down and test 20sma.
I will take any sides today… as long as it is a Macfibo activation (duuuh!)… but If one have to ask ‘which side I’d much prefer’… I’d say UP. For that, I’d much prefer price to test 20SMA and perhaps made a quick Sell activation (fake Macfibo Sell?) and made a u-turn and activated a fresh Bullish Macfibo. If price not able to break 20sma to the downside, I reccomend to monitor the 5x8 for a re-entry (sorry for ver 2.0 delay!) and use 200.0 and 261.8 as your primary TP level… though a retest on 161.8 is safer.
Don’t forget what happens today in the fundamental side of things…
Hi Billionz, all the best. I never took NZDCHF trade hence I don’t actually know what is their behaviour etc. However, in EURUSD, when that pattern occurs, usually price would continue to 161.8… or atleast to 127.2. BUt stick to your stops/targets. 
hi, just a question:
why did you use 8 SMA and not 8 EMA?
Why 8sma and not 8ema? I’ve tested 8sma before and I never tested with 8ema. Thats the best answer I could give you.
ok, I thought there was a specific study or a logical choice
Hello sufian,
any trade activation??? 5 crossing 20 on gold
My observatipn is 8sma gives meearlier signal to exit a losing trade then 8ema. But i am aware 8ema gives better signal in holding a trade… I am a defensive trade hence 8sma suits me.
I am sorry bro, i dont have chart access right now.
right, good.
thank you
got into EURUSD about 3hrs ago. hit TP for profit of about 13pips.
Macfibo yet to hit 127.2, how did you hit TP?
