What I am really interested in is how others might use the script I made to enter and exit the market as well as how they might manage their order. This is how I’m doing it and I look forward to your comments.
As I stated earlier, I run the script on the 5min chart as this is where I look for my entry signals. Again all MA’s are Linear Weighted and applied to the Weighted Close price. What I’m simply looking for is a temporary loss in market momentum - a retracement to occur. In a rising market we will see the price pull back off a recent high and is characterized by a FMA falling below a SMA. Then recovery and the price starts to rise again. I’m looking to jump on board as soon as the market indicates so I’m now watching the Bid price. When the Bid price crosses above what I’ll call the Entry MA I enter the trade. Just keeping it simple as they say. In summary trade conditions are meet when:
1) MTF LWMA Trend Filter Script indicates a rising market,
2) FMA is less than the SMA and
3) The Bid price is greater than the Entry MA.
Here is an example of a Long trade on the chart;
The system is just opposite for sell entry points in a falling market. However instead of using the Bid Price we use the Ask Price to determine our entry point. Here’s an example of a Short Trade;
To manage the trade I’m using 0.2 of a lot per $10 000 of available equity at leverage of 200:1 and use a Stop Loss and Take Profit. Again because of the natural vibrations (noise) level of each pair SL and TP values are different, likewise for long and short positions. I also restrict open trades to just one open trade at any time in each direction. Here are the values I have optimised for these pairs.
EURJPY USDJPY GBPJPY
Long_Entry_LWMA 13 11 3
Long_FMA 7 3 13
Long_SMA 19 27 21
Long_Stoploss 60 30 75
Long_TakeProfit 75 50 75
Short_Entry_LWMA 3 11 3
Short_FMA 9 3 13
Short_SMA 17 29 15
Short_Stoploss 65 50 30
Short_TakeProfit 25 60 25
Again, I have developed a script to do the hard work for me and here’s the link;
Bobs MTF LWMA Trend Filter with Trade Alert.zip (8.6 KB)
Hers a screenshot during a rising market;
And one from a falling market
Now I personally don’t work with this script, I have developed an EA to assist my trading but my skills at programming are limited so I won’t offer this out in a public forum at this time. The script is just my EA minus the ability to place a trade. However having the EA allows me to monitor and collect data on several pairs at once during forward testing and facilitates back testing. The settings I have offered are the three pairs I have concentrated on. Other pairs include AUSJPY, NZDJPY, CHFJPY, EURUSD, AUSUSD, NZDUSD and GBPUSD. Results look good but I have yet to examine the effects of spread, swap etc on the system and returns for some pairs don’t look as good or have larger drawdown than others.
Talking of returns what does the system return? Well preliminary testing looks to be around 10 to 20% on each pair per month keeping drawdown in single figures (8 to 9%) however back testing results suggest that if one is prepared to increase risk then returns could be much greater. Myself personally I would rather trade multiple currencies and small risk that throw all my faith in just one pair. Also please remember that I have only just recently refined this system and subjected it to testing in a demo account during the past couple of weeks. Optimising the systems is very time consuming and for all I know these setting could flop in the next few months and the system fail. I certainly hope not. Hope you all enjoy.