Hello everyone,
Just a quick update.
Currently, I am up +21 pips.
I have set my S/L to +1 and I’m not risking any of my capital now.
Let’s see how things progress. A winner here would be a nice bounce back.
Thanks,
-ForexPhantom-
Greetings,
Great post.
I’m not a pro by any means, but I can offer my own two cents worth.
Mathematically, a 1:1 r/r will win in the long run as long as you win a majority (51%) of your trades.
However, the popular choice seems to be 1:2 and beyond. I certainly like the idea of having 1:2 and beyond simply because that means I can lose more trades in the long run and still come out on top.
A lot of people brush off the idea of money management and risk/reward ratios, but honestly there couldn’t be anything more important in forex. In essence, those two things define successful forex trading. A lot of people incorrectly believe that it’s all about finding the holy grail trading system that will never lose. The secret is that any system can be turned into the holy grail with proper money management.
The general rule is to only risk 2% of your capital per trade and 6% of your equity per month. These are solid guidelines but are pretty conservative. I’d be pretty pissed if I lost 3 trades in a few days and I was done for the next 16 days and had to sit and do nothing while the market marches forward. Instead I’d recommend finding a solid system and setting conservative goals and only taking the best trades.
Regarding R/R ratios, some are not feasible. Avoid extremes. Between 1:2 - 1:4 would probably be your best bet. If you are gonna trade on the 1 Hour Time Frame (as I do), you can’t set your S/L too tight.
1:2 ------- 20/40, 25/50, and 30/60 all seem feasible.
1:3 ------- 20/60, and 25/75 seem feasible.
1:4 ------- 20/80 is possible but seems a bit high.
1:5 ------- 20/100 is too high in my opinion.
It’s all about finding the right balance. Experimentation will yield the best choice. Test them out with your specific system. See which one is the highest you can get away with.
For our current system, I’d lean heavily toward a 1:2 r/r although I’ve been using a 1:1 with a trailing s/l. 25/50 jumps out at me as a very good choice, although you could try the other two.
The important thing to take into consideration is your win ratio and average pips gained per winning trade. Those two things should be at the cornerstone of your money management strategy. Always custom tailor your money management strategy to your system and not the other way around. Each system will warrant a unique money management protocol. A scalper system will vary significantly (or should vary significantly) from someone who trades with the trend.
Happy trading,
-ForexPhantom-
Greetings everyone,
Well, my S/L was hit and we only got +1 pip. We witnessed a huge 30 pip swing in a very short period of time. A win is a win, but I wish I’d have cashed out earlier.
Which brings me to my next point: With all this chat about Risk/Reward Ratio, I’m thinking of implementing a new one.
I’ve detected a very interesting pattern with this current system so far.
When you initially detect a crossover and enter a trade, the following always seems to happen:
The trade runs into profit in the beginning until you are around +20 - 30 pips ahead. Then, there is a **** load of resistance and the price falls backwards until you are either 0 - 10 pips ahead. Then it will hang out awhile and you are pretty much back where you started. The majority of the time the trade will bounce back upwards and break the previous resistance. Some time’s it doesn’t.
The moral of the story is that it seems very easy to get around 20 - 30 pips right off the bat with this system, but then you encounter lots of resistance and it’s gonna hit my trailing stop/loss.
So I’m thinking of adjusting my T/P to between 20 - 30 pips. Those extra pips can easily be made up by getting in on another trade. It just doesn’t make sense anymore to miss out on 30 pips because we had a 30 pip swing and it hit my break even point. We should just take it while we can and get right back in the market on another pair.
My s/l will be slightly different from my t/p so that my risk/reward ratio is either 1:1 or slightly higher, such as 1:1.5 or 1:2. I’ve got to do some thinking and some experimentation to see what will work best. Here are some possibilities off the top of my head:
15/20
15/25
15/30
20/25
20/30
25/30
The good news is that this should solve all our problems with our exit and we can avoid all these pivot points and resistance theories, etc.
I’m liking the looks of 20/25 for this system. Maybe I’ll test that one first.
Thanks and please share your thoughts and/or success you’ve had with the system,
-ForexPhantom-
1 Like
Well, that would be S/R (probably weekly or daily) in other words HOCUS-POCUS ABRAKADABRA
I’m glad you can see the power and meaning of horizontal S/R yourself.Some, that is first step to be ahead of 90% people trading forex. I agree nobody knows and can’t predict, the thing is to recognise price action, hunt for it around S/R levels and ride it when it turns. You don’t need to be in the market all the time just because some lagging indicators are promising you a paradise and most of the time dream ends in the morning when you awake.
Sometimes by watching and waiting for the trade is the name of the game.
pakiestra, I saw you over at J16 thread in FF, it seems that you are paying more attention to SR levels after reading James16 thread. By the way, we also have an SR thread started by Tess in BP. Hope you can drop by the thread and the materials there may interest you too. I have to admit James16 is one who really knows his way and what he wants in his biz. But his thread is so damn long and I am not even half way there yet alot more to catch up. Have to apologise to FP for posting unrelated stuffs in his thread, hope he dun mind. 
just a quick update on my trades, on g/u the price hit my half target and I have secured my profit, with the e/u I am currently -7, I am still going to hold that till a big news that will take it down to its targets.
Hi there,
That is why I take 10pips and wait again for another, but in the long run this system prepares the long term trade using the 1hr, could take a day or two sometimes.
you have the right idea but I still think that you need a sup and res lines to begin a trade. The trade that you took last night with long position, I was short on that one :), you took it when it was retracing up, the price was going down from the res line. I have included an hourly chart, I was expecting that retracement based on my prev experience and I was -70 at that time, I like it when it retraces, that is a proof for the price to fall down, it is not the same case all the time though, and hopefully it will go down. on the e/u trade that i took, I am on the positive side which I am still holding my trade.
with retracement, I used to wait for the retracements but sometimes it doesn’t retrace and then I miss out on a great trade
I just wanted to add some more. If you look at the chart, the candle that hits the res line is a common trend reversal candle and it is very strong.
At this time something is forming with Eur/gbp, first I will get my 10 pipitas and then later with in couple of hours I will short that for bigger pips, but again I have to wait to confirm it, I’ll share that idea, it will be similar to my prev charts, nothing different.
ok with g/u I have closed that 2nd half of the trade with profit, Ishoudn’t have closed it due to the 4hr chart, looks like the price will still go down to me. I took a nice 1% profit of that trade. For now in the 15 min chart looks like it formed a nice res and looks like the price will go up for now and in the 15 mins the MA,MACD,RSI,Momemtum formed a nice confirmation and I am long on that one for the first 10 pips, i will not go long afterwards using the 1 hr chart due to I don’t want to go against the 4hr, unless the 4hr breaks its res.
I am still holding my e/u trade short.,
Hi Thread,
Thanks for the info, although i try it but it didn’t work.
FP - I have followed this thread along since its inception and it has been interesting to see new ideas form and directions taken. Its a great place to “think tank” and come up with new variations to approach various problems. I was first introduced to a very similar method (it was a purchased strategy that has proven to work to some degree) about a year ago. I have incorporated that method and tested it out on various pairs. I have reviewed lots of statistical data utilizing different approaches and the best sought outcomes using MA crossovers. There’s a lot of information out there for as you know this method has been pretty popular over the years.
I very much like how this thread is progressing (except for a few users who seem to interject lots of information that doesn’t seem to pertain much to the thread) and don’t want to lay out all the conclusions I have come to in viewing the massive amounts of research that I have. Instead I would like to make a challenge for you; but first I need to set it up a little:
Q: What moves the markets?
A: Fear and Greed - lets group the massive amounts of emotions one could be feeling that leads them to buy or sell as the Psychological State.
Q: What is Price?
A: Dr. Alexander Hamilton states price as “Price is a psychological event, a momentary balance of opinion between bulls and bears, its pattern reflects the mass psychology of the market.” - Broken down a little easier its a temporary agreement, utilizing all information available, as to the value of the underlying asset.
I ask these to further ask - “So what are you seeing when you see the MA cross?” Personally I think the best answer would be that it is the psychology of the masses agreeing on a new direction for whatever reason. Now this makes perfect sense… unless of course the market is moving sideways. Now a cross is not so much decisive agreement, but more indecisive.
Okay so getting to the point (I can hear you all thinking okay wtf are you rambling about), the crosses are a reflection of a strong psychological support of the masses. MA crosses are purely technical analysis. Technical analysis is the ability to catch patterns (like MA crosses) and make an educated guess (based on historic occurrences) as to the outcome of price based on the pattern. You are viewing statistical data in an effort to maximize your probabilities.
I promise to expand on this later but hopefully I have given a little food for thought. MY challenge to you is this: record your results (yes I know you are doing this directly on the forum) in a nice easy to read format. Test a method multiple times before saying “this doesn’t work” (ie stop loss placement, etc). Gain some perspective on whats the best time of day, the best day of the week, how close to the high of the daily trading range can it be before its too risky, which pair gives the best return. With every new trade and every new piece of data, you start to increase the chances of future trades.
One aspect of this system that I have seen multiple times in those who use it successfully is this. Generally there is not a high success ratio (this seems to be much of your focus) but the losses are cut short (relative to the gains) and the winners are generally 2 or even 3 times the losses even though they win less often times. I have watched as months go by accounts go up and down but in the long run, because you are jumping on the big 100+ moves and minimizing your losses (i’m not saying how I see most ppl do this on purpose) you win.
More to come if you wish. Also FP message me if you are interested in the original method that I have.
Cheers
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;)
Hello
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?
Name them, I hate to be so anonymous 
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.
Thanks,
-ForexPhantom-
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 KBInstead 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?
Cheers.
1 Like
Hi ForexPhantom,
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.
1 Like
Hello there,
Thanks for the thought. Seriously, I like it.
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.
Thanks,
-ForexPhantom-
Greetings,
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-
Greetings,
Thanks for posting this EA. I actually all ready have it, but I’m confused about what the best settings should be.
We need what all trailing stops need:
-
Enough distance and freedom between the current price and the stop so that a tiny retracement won’t trigger it.
-
A tight enough trailing stop so that we squeeze every pip possible from each trade.
-
Universal settings so that we can find the best parameters and simply set it and forget it.
If you know of some good settings for trading the 1 HR charts, PLEASE post them!
This could save us all a lot of frustration (mostly meeee!).
Thanks,
-ForexPhantom-
miniTrader,
Mind to explain the setting of the trailing stop ea?
What is the Trailing Step?
Trailing Stop value, shd be the no of pips trailing rite?
And the Profit Trailing setting for True and False is to enable or disable the EA rite?
Thanks for sharing