Oh yes, you can even read my confession over there :D. I know what I’ve been doing wrong, now do the things in a different and PROFITABLE way. What is more funny I’m demoing it. I know these days everybody wants to be ahead of the game, first, the best, came out with non-existing holly grail or claim to be so. I’m not, cause I’m learning.Period.
I will go there in a minute or two. Hope you won’t throw me through the window.
I can drop you a link, one of the fellows there has done a tremendous task of going through the whole thread (which contains lots of guffin as well) and put the essence of it so that saves lots of time. Ok I will be finishing cause
A. FP will get annoyed and will send me a ban
B. It’s ok for me if people want to close themselves in a shell, so be it and I won’t disturb, promise;)
Very intersting thread. Try to use this metatrader expert advisor for trailing stop. Configure this and add to chart. It is very good. When you run in profit it will automatically begin to adjust your stop loss.
Your idea is very good. You can try to make an automated expert advisor out of your strategy?
I’m sorry Mate, I can’t have much time for this type of challanges, I’m so
Instead of this general mumbo-jumbo of last post sharing your conclusions and results of this research would be worth reading, I swear. Or even tiny piece of it. I will read it with a great interest.
Sorry for not taking up the challenge.
If you have something new come out with it and share it for the benefit of all newbies here. If you want to sell some magic system, go somewhere else.
Here we say thank you to the pedlars.
No no. I wouldn’t ever do such a thing. No worries. Although, try to stay on topic when possible.
And I am NOT closing myself in a shell. Believe me, I will try anything once. Success to me is just a matter of dedication and hard-work, not necessarily a genius idea. But I still haven’t given the original system a fair trial. So far it is working, so why change anything? Me adding a bunch of indicators at this stage doesn’t make any sense. Then we would never know about the original system. First, you exhaust all possibilities and test something for a long period of time. Only then can you make a reasonable decision.
If this system fails, then I will consider your methods.
Quote:
Originally Posted by nlrsniper View Post
Instead I would like to make a challenge for you…
I’m sorry Mate, I can’t have much time for this type of challanges, I’m so Name: chicken.gif Views: 23 Size: 814 BytesName: rolling_on_the_floor.gif Views: 23 Size: 11.1 KB
Instead of this general mumbo-jumbo of last post sharing your conclusions and results of this research would be worth reading, I swear. Or even tiny piece of it. I will read it with a great interest.
Sorry for not taking up the challenge.
If you have something new come out with it and share it for the benefit of all newbies here. If you want to sell some magic system, go somewhere else.
Here we say thank you to the pedlars.
With added testing and continued work on the current method presented by FP a solid reliable system is bound to form. I feel i have contributed in a manner, albeit not necessarily in the “follow these steps” type manner. I feel that would reduce the flow of ideas and the possibility to find a new better strategy than one that is already known. The market is dynamic, and as such a methodology of trading should be flexible. Who knows, maybe a “failed” system in the past will prove to be a beast of a system with the current market dynamics. With multiple people approaching the same problem with different ideas and perspectives, but all with the desired end result, there are bound to be some revelations.
Selling something? No, just stiring the pot to see what new concepts might form.
So on a more technical note here is a method that I personally have used in the past as the initial stop loss for a MA crossover system. This is by no means the “perfect” method, or the best way, it is just a way, that has been profitable. I only post it because it is a slightly different approach then what I have seen thusfar listed in this thread:
1.) Look for a cross of the fast and slow MA. I personally waited until the next bar to open in order to confirm it was not a temporary cross. I personally found that this gave me a higher probability of a winning trade.
2.) Set your stop loss 50 pips away from the fast MA (in FP’s he was utilizing the 5EMA as fast). (not 50 pips from the open price of the bar, but actually where the fast ma is at.)
2a.) IF the distance from the opening of the new bar and the ema is >= 50 pips, pass the trade. This means that your stop loss would be 100 pips away. The move prior to the cross or during the cross was most likely really large and you are late to the party.
2b.) This one is sort of a no trainer but if the distance between the ema and opening price of the new bar is 1 or 2 pips, pass the trade. The market is most likely moving sideways at this point.
3.) As the fast EMA moves in the expected direction of the trade move up the stop loss to maintain the 50 pip distance.
So where do you get out. At what point do you lock in the profit? Hey I said I was just going to give a little bit. I want to see peoples ideas. Hell take the little bit that I just wrote, shred it to pieces, and made something new out of it. It is just one method that has worked in the past. That does not make it to any degree the best way or the right way! It is just a way that I (and others) have found to statistically give the ability to hold out for longer trades.
So, lets have fun, shoot some ideas, mix it up a bit and see where we end up. You have a profitable system as it is FP. Who’s to say that it isn’t already really great?
Just to add in my thoughts, I think your current strategy is good enough. Just that try to take note of potential SR levels that will oppose or help your trades, For example, if you MAs crosses and it is on a support level, this will give you more confidence in taking the long trade. If your MA crosses telling you to go long but there is a potential resistance zone which is some pips away, you may want to wait for price to clear the resistance zone before taking a long trade. In addition, look for levels that will hinder your trades and maybe consider closing out some positions at the SR levels that hinder your trades. Just a harmless thought.
I hear a lot of talk about support and resistance levels. To a layman like me, it is intuitively intriguing and common sense in a way.
We have two zones, one for support and one for resistance. The price stays sandwiched in-between these critical levels.
Let me tell you a short story which will highlight my big criticism:
Let’s say I have a lot of free time on my hands and I decide to get really ambitious – I conduct an experiment. I gather 100 experts on S & R related to Forex and place them in a room with 100 computers.
“The task is simple. I want you to study the currency of my choosing and determine the daily S & R levels. You can use any tools and indicators you like.”
With great haste, they go about their analysis.
At the end of the hour, I review their results.
Take a wild guess as to what will happen…
I will be presented with 100 theories, none of which will probably be alike.
Which one is correct? Who am I to judge?
You may be thinking that, “Sure, you won’t get the same uniform answer, but surely you can average together those responses and the truth will have to lie somewhere in-between!”
Really? It has to? I didn’t see that in the “10 commandments of Forex”…but maybe I missed something.
Even if the truth did lie somewhere in-between all those answers, that doesn’t help much in the world of Forex.
There could be very large gaps in the number of pips between Theory A and B. Averaging won’t do us any good because of this. Forex is unforgiving. If I am off by 25 pips in one of my levels, that’s a huge number! That is akin to a weatherman saying perhaps 20% chance of rain versus 75% chance of rain! Big difference. This could cause me to pass up good trades or enter bad ones.
Of course, I am not really being fair. All indicators are unreliable sometimes. Nothing is perfect. But my main gripe with S & R levels is that they seem to be very much manually (i.e. humanly) derived, whereas more traditional indicators are totally cpu driven.
Not that there is anything wrong with human calculation. We are intelligent animals, surely. But there will always be significant deviation from person A and person B. 50% of the time person A will be right, 50% of the time person B will be right.
As you mentioned earlier, it could possibly help us avoid bad trades and reassure us when we want to place an order. I agree with that. But the problem is that it could just as easily keep me out of good trades and encourage bad ones.
If I am going to follow it for some trades, I’ll have to follow it for all trades (otherwise I’d just be picking and choosing which means the indicator would only be used when it agrees with my other setup).
Could it be useful? Sure. I’m sure a lot of people enjoy success with it. And even though I’m bashing it right now, that is only a minor criticism that applies to virtually anything in Forex. I would definitely be interested in trying it. I would simply want to know the best and most accurate way to compute such levels. Then, I’d want to test how accurate it is. Maybe you guys could post some stats on it?
Anyways, good discussion. I’m always up for trying it out, but I still need to be educated. Anybody who’d like to help out, I’d appreciate it.
I agree with you about mixing it up and generating new ideas. That is what this forum is all about! And we are lucky to be able to demo trade the way we can.
I understand what you mean about getting in too late after the crossover. You can usually see a big warning sign: you will see a massive, goliath candlestick which is totally out of place in relation to everything else going on.
Of course, that’s not a very scientific calculation, but…
I’m having trouble understanding your method for computing this. You say you should subtract 50 pips from one of the current EMA’s. I forget which one you say, but my point is that it shouldn’t matter if they have crossed, should it?
If the EMA’s are touching and have crossed, then they will basically be right next to each other, which translates into a very small pip distance away. So subtracting 50 in this case just means setting your S/L to 50 pips away from when you enter the trade (doesn’t it??).
I’m a little confused, so if you wanna explain it more that would be cool.
I have problems too with arbitrary S&R lines, which everyone sees differently (like Fibonacci for example). Or take a look at the Elliot Wave theory. 100 different persons, 100 opinions.
But what is not arbitrary at all, and it precisely calculated from previous day H, L, O and C, are Pivot Points. Give them a try, and you will see that they work at a satisfactory degree.
I agree with you about mixing it up and generating new ideas. That is what this forum is all about! And we are lucky to be able to demo trade the way we can.
I understand what you mean about getting in too late after the crossover. You can usually see a big warning sign: you will see a massive, goliath candlestick which is totally out of place in relation to everything else going on.
Of course, that’s not a very scientific calculation, but…
I’m having trouble understanding your method for computing this. You say you should subtract 50 pips from one of the current EMA’s. I forget which one you say, but my point is that it shouldn’t matter if they have crossed, should it?
If the EMA’s are touching and have crossed, then they will basically be right next to each other, which translates into a very small pip distance away. So subtracting 50 in this case just means setting your S/L to 50 pips away from when you enter the trade (doesn’t it??).
I’m a little confused, so if you wanna explain it more that would be cool.
Thanks again,
-ForexPhantom-
Unfortuantly I am not at a PC where I can post a picture. I will try to explain it a little better but if there is still confusion I will post a photo later.
An MA is the average price (in our case applied to the close) over the last X bars. Therefore there is generally a deviation from where the price is currently, and the current MA. Now remember that I generally placed an order after a cross AND on the start of a new bar. Lets say our cross gives us the indication to BUY. What I would do is look at the FAST EMA’s current placement (generally different than the new bars price) and since we are going long I would place my stop 50 pips below where the current FAST EMA is. As the price moved up I would move my stop up to maintain the 50 pip distance FROM THE MA not the price.
Now let me say this. What justification do I have to using this method? Lets look at your recent post about S/R. So you have 100 ppl that have given you his or her theory on S/R. Now what if you take those theories and utilize them in a program that back tests and compiles all the results. Would you not follow the theory with the best results? Ohh I hear it already! “Backtesting is historical and means nothing. Only forward tests matter!” We are doing technical analysis right? Mr wikipedia say - “Technical analysis is a security analysis technique that claims the ability to forecast the future direction of prices through the study of past market data, primarily price and volume.”
The method I have posted above was statistically found to be the best method to give you the highest probability of profit. Some important aspects to note are this:
1.) The method was found to be most reliable on the USD/CHF
2.) There are still holes that I have not filled on this method for sake of critical thinking in this post.
3.) I do not use this method any more b/c i do not find it to follow my money management principles.
Sooo… do you have a general idea as to what I mean as to the method of placing the initial stop loss? If not I will get some photos up later today. I really enjoyed your insight to S/R and to some degree agree with you. In the end what matters is that you are profitable. I find systems with large statistical probabilities give me the best returns. The MA crossover system (very similar to what you are doing) has made me (and many others who have followed the rules) a fair sum of pips.
I am no trading expert but just sharing my thoughts. My SR levels are horizontal and drawn manually. I plot my SR levels from a higher timeframe whereby price got supported or resisted. Maybe I suggest you take a look at more common levels whereby everyone will take notice of like previous trading day high and low. Plot these levels on your chart and see how price respond to these levels and see how it will help out with your strategy.
Remember when profit have moved to 27 pips it will set a stoploss at 2 pips. So you can configure the setting that will work best for you. The thing is at least it will not go inn loss
Anybody just catch that 300 pip move in EUR/USD at 11:15am - 11:30am (PST)?
I was in that trade, but my system was set up to immediately sell at a pitiful 50 pip profit target.
I left 250 pips on the table!
Talk about NOT letting your profits run.
A trailingstop sure would have been nice for that trade.
I am a BIG fan of taking off parts of a trade at a tp and moving my stops up. IE Close 1/2 the position at 50 pips - move stop up to 25 pips (whatever you are comfortable with). At 75 pips I might take off another 1/2 (so only 1/4 of the original trade is still open) and again move my stop up to say 50. This leaves open the possibility to catch more of the move, with out substantial risk to your capital. After testing this 100’s of times you may find that this actually (based on one specific trading method) increases the total amount of capital gained vs if you closed the full position at your TP every time… but then again just the opposite could prove to be true
Some caught it, some didn’t. But don’t be sorry that you did not. It is not a good idea to be in any trades during high impact news (as the one that triggered massive moves on USD pairs).
Unless of course you trade the news as part of your strategy. So, a good rule is to watch the market from the side during release of important news, even if catching those moves might be tempting.
Later edit:
Hmmm… which gets me thinking… what if I have placed limit orders both sides of the price right before the news report comes out, on all the USD pairs, and with a trailing stop? I would have cashed in a few hundreds of pips. Also look at the CHF pairs on March 12. Same thing happened. I’ll definitely try this.
Some caught it, some didn’t. But don’t be sorry that you did not. It is not a good idea to be in any trades during high impact news (as the one that triggered massive moves on USD pairs).
Unless of course you trade the news as part of your strategy. So, a good rule is to watch the market from the side during release of important news, even if catching those moves might be tempting.
Later edit:
Hmmm… which gets me thinking… what if I have placed limit orders both sides of the price right before the news report comes out, on all the USD pairs, and with a trailing stop? I would have cashed in a few hundreds of pips. Also look at the CHF pairs on March 12. Same thing happened. I’ll definitely try this.
Happy trading,
Marius
There are a large group of traders who only trade the news in just this fashion. There are lots of “systems for sale” out there to direct you how to do this. I am not saying you need to get them, just validating the use of this system. Its a tricky approach but one that can be very very profitable. The bane of these systems is the indecisive whipsaws that will shoot all over while traders are figuring out what exactly the news means. Place your chips, and roll the dice. Maybe lady luck will be on your side.
Yes, during the NFP I have heard that this is particularly effective.
The theory is that you set a buy order and a sell order 15 pips away from the current price. It’s best to use the “One cancels the other” function.
The market will swing one way or the other depending on the news, and whichever way it goes you will jump in with them automatically! Then you just manually cancel the other order (or not if you have the OCO function).
I’ve never done this but heard it works.
When I get a decent amount of actual money invested in Forex, I will do this with a large lot size. The market can swing many pips in a matter of minutes after a new release. Imagine throwing a 10 Lot on both sides and catching a 50 pip move! That would be an easy $5,000 bucks in an hour!
A lot of people might scoff at that but its very possible. The market is gonna move one way or the other during a news release. 99% of the time it will move quite a bit. Whipsaws are a possibility, certainly. But this is an interesting possibility to keep in mind either way.
