I know it’s been done to death, but I’m just curious, specific to the swing and position traders, what was, or is, your best system?
I think it would be an interesting read, especially for newbies, so for their benefit, please include your indicators and why, your RR ratio etc, to be as informative as possible.
This isn’t so people can copy your system blindly, but to get an understanding of what a profitable system should look like, and the rules and details that are needed to make one work.
I’ll start it off with mine that I use at the minute:
Indicators: 20, 60 and 200 EMA
Buy entry: 200 is heading upward, 20 crosses above 60
Sell entry: Opposite of above
Stoploss is set at 200 EMA level to begin with, and moved to highs as time goes on, trailing and steadily locking in profit
Take Profit is not used
Exit when stoploss is hit, or when 20 and 60 cross
I think you have a great system. The problem with knowing other people’s systems is that you start tinkering with your own. And that usually spells disaster.
Golden crosses from short/long MA’s are a useful indicator of trend. They can be used to enter mature trends (if you consciously do not wish to enter in the trend’s early stages). But to use a Dead Cross as the corresponding exit signal has in every strategy and study in the past led to failure.
The entry signal should not be the most important element of the strategy, though some strategies consist of hardly anything more. These systems leave you unprepared to manage risk, position size, stop-losses and take profit exits: and these are the elements which divide winners from losers and small winners from big winners.
It should be possible to identify multiple TA features which would convince you to buy here and now if the majority are positive. Conversely, if the chart weakens and these elements start to disappear or reverse, these changes could be sufficient reasoning to exit. Or at least to question whether you would have got in long if they had been in their new revised set-up - after all, if you would not yourself buy a given market, why would anyone else? And if they don’t buy it, price won’t rise.
Its almost never too early to dump a losing position, once you accept that you can get back in within seconds if the picture improves, and this does not demand a rigidly defined entry signal which you might not see for another 3 weeks…
