I REPLACED RSI with stochstic(10.3.3) and applied it to daily chart.because stochastic show tops and bottoms accurately.i used 1% lot and 25 pairs.will show result soon
Have been reading this thread and see people keen to find confirmation indicators and Stop Loss indicators.
There are many indicators that essentially do the same thing - indicate the same thing, but are not smoothed.
And the whipsawing of indicators like RSI can create trading fog and frustration.
I do not know how to upload a chart on Babypips, or upload a MT4 indicator for you.
But here is a link where you can download the Relative Vigor Index - RVI.
It works on MT4, despite the MT5 mentioned in the URL.
I use it on 4H and Daily with a setting of 7, compared to the default setting of 10.
I am sure a bit of experimentation will lead you to settings that are right for your own needs.
Hint: I like to simultaneously observe MACD so that I really do have strong confirmation to enter, or evidence to stand back until that confirmation is there.
If I could upload indicators, I would give you my customised MACD too.
I can’t remember where I found it - will search for that URL.
*Cannot locate the MACD_EMA but if people contact me by private message, I will email back the indicator set.
It’s nice to be able to say that in hindsight, this trade went on to make 100 pips at close of market.
Yet even while pointing out the hindsight factor, the attached chart does show that an entry was clear, and traders acting on the indication (as well as the big green impulse candle which triggered the trend) would have those 100 pips.
Price moved from.6756 to 06856 or 100 pips in 2 days.
Nice don’t you think? Just trade the trend, but be ready for the failed trades.
That’s something all of us need to know how to handle.
While I am here - impulse candles can be read in different ways, in my view.
If they happen at the bottom of a trend, they are a powerful indication of a likely rally.
Vice versa of course if they happen at the top of a trend.
Traders need to look at news as well as charts - just another factor in the tool-box.
Sometimes an impulse candle will happen-mid-trend, with little supportive news or other indication.
THEN it is likely that railroad tracks (the next candle falling just as sharply) set up, and the trend can usually run in the direction of the second impulse candle.
If you have a 4H impulse candle up and the next 4H candle down, what would this look like if combined to form an 8H candle? Answer: an excellent pin bar, and we should already know the probability of what that indicates.
This thread has been going for 11 years. I haven’t seen much interest in keeping it going - occasional posts here and there.
But crossovers in all their forms (Moving Averages, MACD, Stochastics) have always interested me, and used on the higher time frame charts can be the change your trading needs to become successful.
What you do need to become a profitable trade, is time looking at charts, and a good strategy.
It can be as simple (and complex) as Price Action (not my thing on its own) or a few indicators (such as in my charts).
But one thing success depends on, and that is YOU HAVE TO TRUST YOUR INDICATORS AND TAKE ACTION WHEN THEY TELL YOU TO.
Thanks for your time.
Depending on interest, I may or may not continue with more charts.
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Have started a Journal here to discuss this kind of trading with filters to ensure trend:
I don’t have an option to set my RSI specifically for median price. Just to 10. Is this OK?
I know I’m late to the party… Did you try it and check it out! Scroll your chart back to see what happens with that setting
very good strategy,simple but I would put stochastic in your position, showing you the proper direction…if you look on MQL5 go to free indicators and search for “double line crossing” it is not mine,put it in mt4…when the moving average crossing,shows you a arrow…if you like go to setting of indicator,and put 5,10.( but always in combination with stochastic)…and rsi
Hello all,
it is some years for this topic…Yesterday I started to apply the strategy described. It works, but must double check the condition.Personally I added the Acumulation Distribution Indicator on chart.
I observe when STO is in 80, RSI in 70, also quiet on ADX, it means that will folow a big momentum. In this case were a negative news for GBP after a bulish rally.And the price fallback strongly.
Also I made a custom script for send on my phone an alert for BUY when EMA5 cross EMA15, RSI crossing 45 above, ADX power trend above 20.For Sell same settings only the RSI cross below 55.
Settings are customizable.I use MT5 on computer and phone, also I received the alert for condition to bu or sell and the coresponding timeframe 5min to 4H.
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Thanks for sharing. What I would like to ask is that the system is good when used in trending market or flat market?
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Hello ForexPhantom
Thanks for sharing your system.
This method appears to be very similar to the Cowabunga system but applied to the hourly chart. IMO this is a sensible modification as the higher the time frame the less ‘noise’ there is and the fewer the numbers of false breakouts.
My observations.
- The best way to increase your profits is to reduce the number of losing trades. Think about this for a moment, it is a very powerful concept and can be the difference between making a profit or making a loss.
How can this be done?
a, The old saying ‘the trend is your friend’ is very important. Put a 200 and 100 sma on your chart.
Switch to the daily time frame. Is price above or below the sma’s? Then switch to the 4 hourly.
Are the sma’s in agreement with the daily? If not, move on. If they are, take trades ONLY in the
direction of the trend. Sure you will miss some winning trades on counter-trend days but so what?
Overall you will reduce (but not eliminate) the number of losing trades.
b. Avoid USD pairs. These pairs are the ones where you are most likely to be shafted by
the big banks. If you don’t know what I mean, google ‘no-nonsense forex’ and check out the video
titled 'Big Banks - Set your stop loss as a ratio of the average trading range (ATR). You can find this indicator on most charts. You are only interested in the figure on the top left hand corner of the chart that tells you what the average daily trading range was over the last 14 days. If the average range on one pair was, say, 120 pips it would be ludicrous to have the same stop loss as another pair that had an average range of 60. The ratio you use is up to you but I would suggest at least one third of the ATR.
Even if you only trade one pair, volatility will vary over time and your stop loss should vary accordingly. The ATR is also important in defining when you start taking profit. Make your initial take profit a ratio of the ATR. - Money management is the least talked about but the most important factor that defines whether you will succeed or fail. You want a strategy that allows you to take some profit early but also allows you to take advantage of the big days. You will only make a decent profit if you can cash in on those big days so have a money management system that always gives you the opportunity to do so.
One method would be to have an initial target of say one third ATR at which point you take half off the table and move your stop loss to break even. That way you have some guaranteed profit and you cannot lose ( you effectively have a free trade) but you still have the opportunity to ride out the big winners. - Have an exit strategy. Don’t watch a big day retrace until your stop loss is hit. There are plenty of exit indicators out there but one simple way would be to exit when your RSI ( a crap indicator IMO but better than nothing) crosses above or below the zero line.
- Write down you plan and don’t deviate from it. Yes, price might change direction back in your favour and s…t might turn into honey but don’t be tempted to taste the s…t to find out!
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I use the system also for scalping in 1 & 5 TF.I dont use confirmaton from RSI.I look only if the next candle if it opens in the direction of cross.
Also it is important to know the pair.What I mean? It is about the behavior of that.
I found that every cross of EMA’s means a move at least 2 pips.Yes, 2 pips but it means something as a value per pips on that instrument.
I trade only 2 instruments every day: WTI and US500.
Have enough volatility to catch in small TF.
Sometimes can be like below:
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Thanks
Iam still a newbie and still trying stuff out
I will give this system a try 
Hi guys,
I made an expert trading using the rules describes above.
Step 1 : Exact rules
- TP : 100
- SL : 100
- Lot Size : 0.1
- Currency : EURUSD
- Timeframe : 1 Hour
Result : From 1000EUR TO 1012EUR
Step 2 : Exact rules + ADX
- TP : 100
- SL : 100
- Lot Size : 0.1
- Currency : EURUSD
- Timeframe : 1 Hour
Result : From 1000EUR TO 1247EUR
Step 3 : Exact rules + ADX + Order lots calculated based on 1% per trade
- TP : 100
- SL : 100
- Lot Size : from 0.57 to 1.9
- Currency : EURUSD
- Timeframe : 1 Hour
Result : From 1000EUR TO 3174EUR
Result are bad on all other currency. What do you think about that ? Thnaks
2 Likes
yes i would suggest that, i always wait for the close of the candle to lock in and confirm the signal from the system
Cool system, will be trying it out over time and recording the results to check trade expectancy - at the moment I am aiming for 2:1 R:R if I can, not to be too greedy…
I have noticed that it is important to wait until the cross has actually activated, this may cause a slightly poorer entry but at least there is more chance of the trade being a winner
thanks!
I have been testing this system on the 1H for the major fx pairs, 31 trades so far, early days
My current win rate rate is 35% and system expectancy is 0.14, which is not great
Basically for every trade I take with €10 risk I will win €1.40 (if that’s correct)
I had just been aiming for 2:1 r:r from the start, not really concentrating on pips per se
What I’ve discovered from analysing my MAE is that roughly 70% of my winning trades only went half way at most towards my stop loss
For my stop placement i was using 1H ATR plus about 3 pips
This now seems a bit too conservative so I think I can tighten up my stops which should improve my R value and therefore improve the Expectancy
Also the 31 trades were over a period of 3 months due to work (avoiding Friday trading too as seemed a bit choppy), a few inevitable mistakes in there as well which I need to cut out
I will continue with the system and report back here as i really like the simplicity of it - i was considering trying it out on the 15m but the OP advises against that, not sure with the 1H you would have enough opportunity
Incidentally, the Cowabunga system, upon which this here system seems to be based, is ran on the 15m so maybe it’s worth trying out
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