2 & 64

Hey pippers

I was thinking about selling this system…but there are many flaws with it that i can’t seem to work out. so, i’m posting this so people can improve it. the key to this system is time…and patience. if you get bored and start messing with your positions (closing out before it hits your stoploss, opening positions on one timeframe and then switching to another…etc) you’ll lose money…lots and lots of it.

Set up:
TF: 1H (not recommended for newbies) 4H, D1
2 ema, close*
64 ema, close
atr 100

*the 2 ema is actually useless, i just added it so that we can see the movement of the price in relation to the 64 more clearly.

it’s an ema system, you wait for a cross…BUT here’s the different part:
when the cross candle (or the candle that breaches the 64 ema) closes, you note the price and the atr at the time. project 50-75% atr from the closing price, and that’s your entry. now, on the daily, the may be 50, 60, even 100 pips away from the current price, but don’t worry, 50 pips will seem like babypips compared to the potential gain.

stop loss:
i’ll explain this as soon as i can figure out how to get some bloody pictures on this thing

again, the key to this thing is patience, once you enter you may hold on to the trade for days, weeks, months…or if you decide to trade weeklies…years.

Take profit:
what ever you want. 50 pips, 100 pips…everything up to 500 pips is do-able on the daily. i recommend closing 50% position at 50 or 100 pips. and just let the rest trail.

k, i’m gonna try and get some pictures on here…it may take a while

this is eur jpy d1.

so…as you can see, there have been 8 crosses since last april…so…this is great for position traders.

the first cross was a fake out, and if i zoom in and apply my entry criteria, there would be a trade. with a small profit potential…so if you closed out 50% of your position at 50-100 pips, then moved your s/l to breakeven, it would still be a small winner.

now the second cross is a valid signal. so the 50% atr we gave up, whatever it was, 50 pips, 100 pips, was babypips compared to our ride all the way up to 159.00ish

that one trade though took forever. now, only a few of us can hold it out that long. so if you have a day job or are just plain busy, this is the system for you. for others, you may add a 25 ema to mark your exits and re-entries along the way.

the 25 and the 64 are both very good at predicting support regions. in this picture, you can see that price bounced off the 64 quite a few times.

so if you’re ever in a trade and the price breaks clear of the 64 ema…get the hell out and/or enter in the opposite direction

k, that didn’t work, here’s what i was talking about

now, let’s take a closer look at the entry stuff i was talking about

here’s the most recent cross on eur jpy. Sept 18, 2007.

closing price = 161.76
atr=1.53 <-- so, on the daily, this means 153 pips…on the 1h, if you get 1.53, it’s most likely 15 pips, use common sense when interpreting the atr

so 1/2 atr = 77, we can round that to 75 or 80, doesn’t really matter, 5 pips = babypips

so our entry is 161.76 + 80 = 162.56 (green horz line)

stop loss…
there are three ways

  1. we could set it at the pink line, just below the 64 (remember, 64 is good for support), pink line, i do this purely by hand
  2. we could set it at the open or the low of the candle that breached the 64, red lines
  3. we use the atr. 1 or 2 x atr from point of entry. i don’t like this method though (too much work) so i’m not going to plot it on the chart

if we had entered at the green line (162.56), we would be up by about 350 pips right now.

of course, 350 pips over a month’s time isn’t much at all. some peopel can make 350 in an hour. but they’re pros. instead of goign for your 20 pips a day, and being nervous all the time, you can just set you entry, s/l, and check your positions once a day…it’s a lot healthier then spending your whole day in front of the screen, sweating over 20 pips…you can actually have a life, get a girlfriend, or something.

and…that’s it
there are a lot more to this system. but since these threads usually generate no interest, i’m not gonna post anymore until i get some feedback