Ema Step System

Trading Systems
1

Hi There,

I am pretty new to this, but so far i have found just two systems that work for ME.
The first one i use is the EUR/USD 45 pips a day system that was posted by James. I haven’t ever actually got 45 pips from this system, but 20-30 is common…i trade $4 pips currently, so it adds up to about $2K a month…I owe James a ty for that :slight_smile:

The second was one that i stumbled across when i was “playing”.

I don’t like complicated systems, as i find it slows me down at the most crucial moment and i end up missing pips and getting a bit frustrated.

I liked the EMA systems i have seen, but all too often they cross half way down a major move, and you end up catching the “tail” of the trade, or at worst, end up entering right at the point of a retracement!!!

I would not say this is a Holy Grail and it is not perfect. I have worked out that i win about 4 out of 5 using this system. But the winning trades are always much larger than the losing ones.

Anyway, let me know what you think…

So after playing about and watching the results, the closest to the move i could find was this;

Ema5 (White)

Ema1 (Yellow)

I have RSI (14), Slow Stocs (14, 3) and CCI (20) up too, this is just my preference, i use it to try and predict when a cross-candle will appear…for this system i don’t really need them.

I use this mainly on GBP/JPY on 15m, 30m and daily. (Daily is generally the most lucrative and predictable but requires patience, it can sometimes seem a small reward for such a long wait)

This is what i do;

I will wait for the Ema’s to cross and for the timeframe on that “cross-candle” to have almost come to an end.
Once i have seen the cross, i am looking to enter as soon as the timeframe makes the step to the next candle, i will enter in the direction of the Ema cross.

If i am at my desk i will not use a stop ( i use a mental stop in this instance), if i am going to be away from my desk i will put on a stop of 3/4 of the cross-candle.
So say the cross-candle was 100 pips from OPEN to CLOSE i would make my stop 75 pips…if the cross-candle was 80 pips OPEN to CLOSE, i would make my stop 60 pips etc…

Take profits;

I tend to use a trailing stop, and as i use Oanda i have to do this manually. (unless anyone knows any different)

This depends on the timeframe you are trading on;

On 15m chart i use a trail of 10-15 pips, looking for an overall 25-40pip trade.

On 30m chart i use a trail of 10-15 pips, looking for an overall 30-50pip trade.

On daily chart i use trails of 25, 50, 100 & 150 pips, looking for an overall
2-300pip trade.

I just looked on my history and for my last 15 trades i won all but 3 using this system. 4 of those trades were on the daily and netted me over 200 pips each.

Let me know what you think,

Maurizio77

1 Like
2

Hello Maurizio77. Thanks for sharing your systems. We appreciate you taking the time to write it out. May I ask how long you’ve been trading them?

3

Hi Ninja,

The 45 pips per day thing i have been doing since James first put up that post…so since February at a guess.

What i like to call the “Ema step” i have been doing since the beginning of December.

I forgot to add on the last post that there are occasions where the price doubles back on itself immediately after the initial cross candle, this tends to happen alot near the weekends, some news announcements and in the lower timeframes…depending on what timeframe you are using…the longer the timeframe the less likely this is to happen… but when it does happen this is easily “spottable” as the reverse cross candle crosses well before your stop is reached so you can exit the trade and wait for the next cross candle to step on.

I hope i am being clear on this…i have never been the most articulate of people lol

4

hi there,

thx for posting your system. I will test it out. but I am a little confused on how you came up with the SL. Could you expound on how you decide? Specifically the number you’re taking 3/4 of…

5

Hi Sure,

I have attached a pic. This isn’t the best example, but it is the first cross-candle i saw after reading your post reply.

The figure i take 3/4 (75%) of is the Cross-candle itself.

Now some profit-loss ratio traders won’t like the look of this, as the stop can be more than the potential gain, however i would like to point out that i RARELY, if EVER let my trade hit my stop, you can usually tell if a trade is going pear-shaped waaaay before it hits your stop because the candle you entered on crosses immediately the other way, so i take a small loss on the chin…and wait for the next cross…depending on the timeframe there can be from 1-20 a day.!!!

The strength of this system, IMO, is that you can almost catch the very beginning of the movement so if it is a 30 pip movement.you’ll probably get at least 20 of them…and Yes it CAN flip the other way…but more often than not this sytem catches the very beginning of a retracement too so you can get out early and minimise any loss on that particular trade.

At times you WILL lose on Forex, but you don’t have to win all of the rounds to win the fight, just make sure you average better after 12 rounds then the market does…How do you do this??..If a trade is going wrong get out!!!

Most people can MAKE MONEY on Forex, it’s stopping it slipping away after you’ve earnt it that is the big problem.

Can tell i have just got home from work coz i’m jabbering…sorry lol

CrossCandleExample1.JPG1024×768 126 KB

6

ok, thx for clarifying

I didn’t realized that you set your SL on the [U]close [/U]of the previous candle- the percentage of that- now i understand…

I already made some pips on this system. I will let you know how i do, thx and thx for the pic that always helped that a lot too.

R

7

Hi Pippy,

Glad to hear you’ve made some money on it :slight_smile:

I have posted my trade from today.

I didn’t enter the trade i put up yesterday as it was just an example.

This one i have put up today i DID trade.

So had we entered both trades we would now be up by over 200 pips…and it’s only tuesday!!!

Happy trading :slight_smile:

My trade today1.JPG1024×768 142 KB

8

thx again Maurizio

I will let you know how i am doing in a few…

happy trading to you too : )

9

Maurizio77

I appreciate the time and effort to create this. Looks interesting and I will test this also. Very logical when the other indicators signal the reversal.

Thanks

JBorgesNM :slight_smile:

10

Hi Maurizo. Like the look of this, especially for trading of the daily as it looks to work well. I’ve attached a chart to try and make sure I understand the system (pretty sure I do as it’s very simple!). I’ve circled the last cross of the EMA’s on the 14th March. Am I right in saying that you would wait for the open of the next bar i.e. 15th before enering the trade? Or do you ever enter early if it looks as if there is no way of the EMA’s un-crossing? By the looks of things this would have pretty much been a break-even trade, and I guess we’re now looking for the EMA’s to cross again as they are pretty much on top of each other now.

(BTW, I’m using Metatrader which utilises GMT, so it looks a bit different to Oanda but the principles are the same.)

gbpjpy daily 1_5.gif1000×600 22.8 KB

11

Hi Shandy,

Yes you look to have got it spot-on. :slight_smile:

It IS a simple system, which is why i use it…the more complicated a system is, the more i need to double-check everything, which inevitably slows me down.

Yes i would enter the trade after this cross as soon as the candle stepped to the 15th.
I don’t enter before the step as i have been burned this way before, i wait
until the last minute before the step to make my stop calculations and set up the trade.

One thing that i am curious about is how you said this would have been a break even trade (entering on the 15th).

On my Oanda the 14th Candle closed @ 226.83 and the 15th candle reached a height of 228.07, that’s 124 pips.
Admittedly, we may not have caught all of these pips, but say, we only caught half of them, that’s still 50 pips.

I wish you well :slight_smile:

12

Sorry you’re right, I was looking at my MT chart and open to high was more like 80 pips so what I mean was it wasn’t a blockbuster day!

Did you enter a long today on GY? Again the candles on Oanda are different to MT and it looks like there was a definate cross on the Oanda candle at the end of the 18th. My chart is posted and you can probably see it looks as if the cross happened during the early hours of the 19th on mine?

gbpjpy daily 1_5 1902.gif1000×600 22 KB

13

Hi Shandy,

No i didn’t enter a trade today, i was on a course for work so i decided to get a good nights sleep as i had to be out early.

Boy do i regret it now!!!

200 pip movement today :frowning:

Still, I am not gonna fall into the trap of thinking “SHIIIIIIT, LOOK AT WHAT I HAVE MISSED!!!” and then dive in trying to compensate for it.

At the end of the day, i didn’t make anything today, but more importantly i didn’t LOSE anything either.
My capital is just as happy now as it was when i stopped trading on friday.

Tomorrows another day, with plenty of opportunities to trade. :slight_smile:

A BIG well done to anyone who entered using this system today though…i bet you’re laughing!!!

Wishing you luck!

14

Another great day for your system man - congratulations!! Unfortunatley there will be no trade today as price is still going UP - but patience is whats needed so lets wait our turn!!

15

Maurizio77 you mentioned how you enter on the candle after the cross happens. You also mentioned you use other indicators, how do you use the RSI, slow stoc, and other indicators in your system?

16

Hi Droesparky,

OK, yes i always enter my trades when the cross-candle has “stepped”.

That is my one and only indicator for entering a trade…simple, fast and effective.

The other indicators i use for a variety of reasons.

For example…

RSI.
I use this to help me in seeing the general lie of the land, bullish if over 50, bearish if under.
I also use it as a monitor thing, that is to say, if the RSI is right on 50 and a get a cross candle, i will monitor that trade in case it retraces immediately afterwards(the next candle). If RSI is AT or VERY NEAR 50 it can go either way so it is worth paying a bit more attention to what you are doing.

Slow Stchs.
This i draw on two lines. One at 80 and one at 20. These give me good indication of Overbought and Oversold. If we are over 80 then i will be looking to enter on the first bearish cross-candle on the heighest timeframe possible as you can expect the trade to go quite a distance. The same (but opposite) is applicable if we are under 20.
I have noticed that price rarely stays at either of these levels for too long as the currencies simply can’t endure that sort of price action.

CCI.
This is an indicator i have only just started using. The way i use it is to see how far the price is gonna go before i want to start thinking about exiting the trade.
I will try and explain how i do this.
I draw on two lines, one at +100 and one at -100.
Once price has crossed either of these thresholds, i look to see how far over the line it travelled last time.
If say, last time it reached 137 before it turned around i would keep an eye out to see if price this time crosses the 137 from before, if it does, the price is gonna jump…big time…so obviously stay in the trade. If it doesnt manage to get past the previous CCI high/Low (in this case 137) then i would be getting ready to exit this trade.

I hope i have made this quite clear, i’m not the most articulate person in the world.

Hit me back if you have anymore questions :slight_smile:

Good luck to all for prosperous trades in the comming week :slight_smile:

17

We had the cross on the daily.

229 pips so far today.

This system WORKS!!!

18

Hi maurizio77, i like your system, simple and straightfoward… now i am testing in on demo… :slight_smile: i have a few questions:

1)How do we filter the bad signals? for example today… yesterday on gbp/y there is a cross but now it is currently down on the opposite? would really appreciate if you could explain in details how do you pick trades, would really appreciate it Maurizio! :slight_smile:

2)How often do you check your trade? once you open a new position do you wait for the day to end to close? or check it every few hours?

3)On trending market, do u leave your position open for a few days? And how do you determine that it will continue the trend on the next day?

Once again Thank you for your time and effort,maurizio77!

regards,
david

19

Hi there,

In answer to your question number1.

I am not sure which timeframe you were speaking about with regards to the cross on the 29th being a bad signal.

I primarily try to trade on the daily.

The daily cross happened on the 29th, so you would have entered at the open of the next daily candle (30th), this opened @ 231.33 and it closed @ 231.88, thats a profit of around 55 pips, although it peaked @ 232.00.

Your stop would have been 230.55. (How i come to my stop is in an earlier post :slight_smile: )
50 pips profit, not bad for a friday, i have to say i didn’t enter this trade as i was happy with my gain from the action the day before. I don’t trade on Fridays, Sundays, or indeed Mondays if i can help it…unless i see the kind of signal that makes my mouth water! LOL

QuestionS 2 & 3
Hmmmm, how long is a piece of string mate? LOL
I am lucky enough to be able to trade while i am at work, but i also have a job to do with the meetings and lunchbreaks that go with it etc…

I am in London, so on the daily, when it steps, it is 5am here!
I next check it when i get into work about 8am.
Then at about 2-3hour intervals after that… morning tea-break, lunch, afternoon tea break then just before i leave.
…This is when i tend to come out of most of my trades as that way, once i have left work i have nothing to worry about, work is over and so is my trade.
So my time is mine and my girlfriends :slight_smile:

There IS often an occasion where my indicators suggest that the trade will continue the next day (2nd day after the cross) in this case i will set a stop at say 50, 100, 150…(whatever is on the radar) and see what happens the next day.
Sometimes it stops out and continues the trend, a bit annoying, but you still have your days profit…of course it can retrace-but you have your stop in place so the money ya made is still yours…and if it doesnt do either of these, you’re laughing!

If your indicators are saying that there may be a 3rd day, you just do the same again, adjusting your stop so you keep your days profit.

Don’t be greedy for just a few pips more, you’ll end up on your arse!
SECURE YOUR CAPITAL!! :slight_smile:

I hope this helps you.

Good luck to all for this coming weeks trading :slight_smile:

20

I hav checked my MT chart, if you entered at the opening of the new candle, the market dipped low till 230.54!!! at first before it moved up, 1 pip to hit our stoploss…!! :slight_smile: :open_mouth:

i think the stochastic is a good indicator for us to know when is the best time to enter instead of entering blindly at the start of the new candle… we could wait until it (stoch) changes direction by looking at the 4hr/1hr TF…

We only enter at the start of new candle if the stoch is already in the direction we desire…

Just MHO… :slight_smile: Thanks again maurizio77, for taking the time to answer my questions!