Ema Step System

maurizio77 · June 20, 2007, 8:08pm

cryten, thanks for the warm welcome back.

I would say to lock in whatever you have by 11.
There is no need to take unnecesary risks, if you could have made 150 pips but you only made 45, who cares? You are still up, the trick is to compound your intrest, little by little if that is the case…until eventually just 5 or 10 pips a day will be more than sufficient for you to make a nice living on…thats my plan.

Of course, if you want to experiment as it’s a demo account, you can set your stop and go checkit again as soon as you get home…this means alot more profit but with more risk.

Personally, i would trade as if you would with your own money.
Get into the habit of holding onto what you have and not regretting what you have missed

maurizio77 · June 20, 2007, 8:11pm

jimocean, yes this still works for me.

I am an active trader with a real account.

I regularly make money from this system.

Benjimang · June 21, 2007, 12:44am

Hi Maurizio,

I’ve been using this system on demo for a couple of weeks now with some decent success, so a thank you to you for that. Your last post regarding your thoughts through your recent trades was a brilliant post, but you seem not to have mentioned RSI at all. Is there any weighting that you give your indicators and oscillators, or do you use them all with discretion to try to understand market sentiment?

Cheers,
Benjimang.

maurizio77 · June 21, 2007, 8:21am

Hi benjimang,

Thanks for the kind words. Glad you have had sucess, this system really does work when you get it fluid in your head.

OK, RSI, why didn’t i mention it. To be totally honest, it was beginning to throw me off a bit. I like it as an indicator, but find it gives off false signals more than the others i use, so i tend to just use this in situations when i may need extra confirmation DURING my trade, if it is heading down, and approching 50, if it drops below i’ll hang onto the trade, if it bounces off i will think about exiting. that’s all i really use it for these days as i find CCI far more reliable

I don’t particularly favour any of the idicators that i use. It’s more like what is appropriate for the job at the time. My indicators are my tools, each has their own job to help contribute to the end product…a profitable trade.

Much like a carpenter would use a hammer to bang things, a saw to cut and a bubble-level to make sure everything is straight…end product a nice cabinet.

I hope this helps.

dobro · June 22, 2007, 9:54am

Hey Maurizio 77 - can I trade your system during NY times? I know you use London’s but that won’t work for me so I am wondering if 4pm EDT would work for the daily close candle. I suspect that using one hr, 4 hr charts would work ok during the morning and early afternoon. If you have answered this in a previous post just say so and I will scroll the pages for the answer. Thanks for your work and system

maurizio77 · June 22, 2007, 6:48pm

Hi Dobro,

Yes you can do this in the NY session, i would say to stick to the daily, 4 hour and, at a stretch the 30min charts.

In my opinion the daily is best

babyfx · June 24, 2007, 9:47am

Hi Maurizio77,

I have been following this tread for some time. I am not trading the GBP/JPY but rather trading the GBP/USD. It seems that this system works fine with other currencies beside GBP/JPY.

The best part about this system is, LESS STRESS trading the forex. I normally use Daily chart. I try to use other time frame but it gives me nervous and not much pip compared to Daily.

I will try to use your system with EUR/USD and USD/CHF by July, and will keep the result posted here.

Thanks for the effort of sharing this wonderful system.

[I]In pursuit for better forex trading [/I]

maymurph · June 24, 2007, 10:08am

Hello mauri,
Looks like our candles step at different times because we are on different time zones.I live in GMT+1 time zone.The daily candle on my platform(marketiva) or is it just my platform steps around 10 p:m my time,that is 5 p:m EST.
Another guy in a previous post said the candle steps at 5 a:m EST.YOU said yours is 5 a:m GMT.
I think this variation will cause us to have different results with this system.
What do you think?
We may have to plan and monitor the system differently.

Benjimang · June 24, 2007, 4:57pm

I know exactly what you mean maymurph. I was trading with InterBankFX (GMT) and my results were ok but not great. I figured out what was going on and now I still use InterbankFX with MT4 but I also have a demo FXCM account running to see what happens on an EDT based charting package. Since I’ve been watching an EDT based EMA Step system, I’ve been more profitable.

I think this has something to do with the price action that occurs during the Asian session, given that GBP/JPY is an ‘Asian’ pair. Perhaps this system will work differently on different time zones for different pairs! That could get confusing…

cryten · June 24, 2007, 6:04pm

Just checked vtrader new daily steps at 10pm GMT. Went in on two trades last night both in profit now. Just need to figure out how to follow the pips and place the right stops.

Benjimang · July 2, 2007, 9:48pm

Hey people,

I just thought I might put up a running commentary on my results using this system. Please note that this system seems to vary a little depending on what time zone your charting package is running off. So I’ll provide some details as to how I will approach this commentary:

I use InterBankFX with Metatrader 4. It is denominated in GMT. I will only be trading the daily charts.

The daily candle steps at 12:00am GMT. This will be:

                   - 10:00am Sydney
                   - 08:00pm NY
                   - 01:00am London (BST)

I will identify potential pairs to trade at this point, but I will not enter yet. As this GMT denominated package will signal a trade before OANDA (which the original system was built on), there may be occasions where I will enter pairs at the beginning of the 2nd candle after the cross, but no further after.

I will place my trades shortly after 04:00pm GMT:

                   - 02:00pm Sydney
                   - 12:00am NY
                   - 05:00am London (BST)

This seems to coincide with the timing that Maurizio enters the market, but I think there is a more important factor here. Entering at this time puts us in the 2nd half of the Asian session. I am getting a feeling that we can get a better estimate of where the market is heading after a few hours of ‘slow’ Asian trading.

I am NOT a professional trader, nor am I experienced. I am merely trying help develop this system and try to stimulate others to post there ideas here as well. What I contribute here is NOT financial advice. Please trade at your own risk, according to your own money mangement.

-Benjimang.

Benjimang · July 3, 2007, 12:51am

Ok, let me start by saying that I can’t see any obvious setups today. I’ll still list the pairs that interested me the most.

GBP / JPY: Possible Sell

Well at 10am here (Brisbane), I thought this was going to be a gunner South. However, I’ve been burned by entering the market at the open of a candle at this time. As I mentioned earlier, I’ve waited till after 2pm to enter and I am seeing mixed signals. Although the EMA’s crossed last candle and stochs are overbaught signalling a short position, the CCI has plateaued and RSI is flatlining above 50. Seeing as the pair is overSOLD on the 4h chart, I’d stay out on this occasion.

USD / JPY: Possible Sell

Very similar case to GBP / JPY, and to add to my confusion, the cross candle was two days ago, not yesterday. Do note though, that the Yen is re-strengthening in the fundamentals, particularly with it’s role in the carry trade arena, and our CCI indicator is still on a steep slope down. However, on the daily, we are heading into oversold territory and on the 4h, we’re oversold AND the CCI is heading north. I’ll stay out I think.

EUR / AUD: Possible Sell

Well, it looked like a possible sell earlier today. Stochs were headding south, CCI was shooting down sharply, although the cross was two days ago. Now as I look at it at ‘entry time’, the CCI has about-faced, RSI is heading back up to 50 and it looks like the EMA’s will cross back up soon. This is supported by fairly strong BUY signals on the 4hr chart and oversold status on the weekly. I’m actually going to stay out today, but it looks like it could give us a BUY signal tomorrow.

Well, no trades from me today. What a poo start to my commentary!

-Benjimang

cryten · July 3, 2007, 10:22am

Benjimang thanks for your contribution to the thread. I’m using cmsfx and entered a sell on usd/cad and buy on eur/chf at the beginning of the week. My candle steps at 10pm BST, I placed the orders and when I awoke usd/cad was 60 pips in profit and eur/chf was around 10 pips in profit. In the end I locked in profit on both sides before eur/chf reversed and started a new cross and usd/cad retraced quite a bit. These were my first orders using this system and I’m confused, I will have to demo entering on the step at 10pm bst as well as 5am

Benjimang · July 3, 2007, 8:42pm

G’day all,

Well, it looks like a wise decision to have stayed out of the trades I looked at yesterday. There were some movers though, noteably the Swissy copping a hammering in across several pairs, and the Aussie moving counter-trend on a few pairs. These currencies will probably pop up in my commentary today.

-Benjimang.

Benjimang · July 4, 2007, 12:45am

Before I look at today’s trades, I should point out that today is Independence Day in the States. For this reason I’ll probably look to close trades before 08:30 NY time, as I’m not sure what effect this holiday will have on the markets. As it turns out, InterBankFX also ceases trading at 15:00 GMT which is a couple of hours after the NY session open.

Ok, as I have posted ealier my eyes are on the Swissy and my very own Aussie:

[B]CHF / JPY[/B]: Possible Sell

On the daily we’ve got a cross on yesterday’s candle, stochs are overbaught, and this is supported by a similar scene on the weekly. Back on the daily, CCI has ducked below 100 so I’m going to sell the pair. With a psychological resistance in view at 101.00, I’ll set my stop at 101.05

[B]Sell CHF / JPY @ 100.64[/B] - S/L @ 101.05

Note here that the other Swissy pairs I looked at (EUR / CHF, GBP / CHF) were both overbaught on the weekly charts. To limit my exposure, I have opted only to enter one Swissy pair, and it seems weakest against the Yen.

[B]EUR / AUD[/B]: Possible Sell

We actually had a double cross of the EMA’s (so to speak) yesterday. With this morning’s news that the Aussie trade defecit has fallen below excpatations, the pair is heading against Euro’s favour. With RSI sub 50 and CCI actully going under the 0 mark, I’m tipping a short position on this pair. Although the stochs aren’t overbaught, they are hading south, and in ‘sell’ mode. Fundamentally, the Aussie is also featuring fairly prominently in carry trade baskets. I’ll set my stop slightly above the psychological resistance at 1.5900.

[B]Sell EUR / AUD @ 1.5873[/B] - S/L @ 1.5906

I didn’t enter the AUD / USD pair for a few reasons, with the main one being that we haven’t seen a cross candle recently. Thus it really doesn’t comply with the system.

[B]EUR / JPY[/B]: Possible Sell

When I checked this pair shortly after the daily stepped to a new candle, there was a clear EMA cross. However, after waiting till my designated entry time, the EMA’s have opened back up. All the other signs point to a sell off: Stochs are overbaught, and CCI has dipped below the 100 level. Mainly due to the uncrossing of the EMA’s and a lack of much price action over the past few days, I’ll stay out of this one.

Ok, two trades entered today. In any case, I’ll a;ways limit my trades to an absolute maximum of 3 per day. This way I’ll limit my market exposure and ensure that I don’t get margin called before hitting any of by stops.

-Benjimang

Benjimang · July 4, 2007, 9:08pm

Well, I didn’t fare too well. I actually went down 20 pips on CHF / JPY and down 2 pips EUR / AUD. At least these losses were small compared to the usual gains to be made from this system, so I’m optimistic that I can make that ground back. Basically, the Euro gained in strength while the Yen weakened. Of all the Swiss pairs, the EUR / CHF would have netted some profit in the area of around 20 pips. Nothing to write home about, but profit nonetheless.

-Benjimang

Benjimang · July 5, 2007, 12:53am

Seeing as most pairs traded in a tight range yesterday, it’s hard to see what to do about it today. About the only major hint is that the Bank of England will be releasing it’s interest rate decision today. As this is widely tipped to feature a rate hike of a quarter of a percent.

[B]GBP / CHF[/B]: Possible Buy

We saw a cross of the EMA’s either yesterday or the day before (I can’t quite discern). Yesterday’s trading was quite flat, but this may have been more to do with the holiday than anything else. The pound has also gained some strength through positive data from it’s services sector. As I said yesterday, the Swissy is still looking a little flimsy. Stochs are heading up, and RSI is above 50. I’m a little concerned that the CCI has flatlined, but again, this could have been due to the holiday, and it is still above -100.

[B]Buy GBP / CHF @ 245.33[/B] - S/L @ 244.35

[B]GBP / JPY[/B]: Possible Buy

The cross cadle was two days ago, again with slow trading yesterday. The Yen has weakened as equity markets have strengthened, seeing a return to carry trade strategies. The major issue here is that stochs are overbaught. With this in mind I will stay out, but I have a real nagging suspicion we could see some real positive movement today, especially if the BoE does raise rates.

-Benjimang

Benjimang · July 5, 2007, 5:23am

Ok I got hammered. Stopped out on both trades. This is the first time I’ve had more than one bad trade in a row using this system, and I’ve hit 4 on this bad run. If someone can point an error on my behalf, please do.

Edit: After reading several reports, I realise what caused what was essentially a whipsaw, knocking out my stops. With such important news being released, many investors pulled their positions hours prior resulting in a dip in price that hit the stops. After the positive news surfaced, the price retraced straight back up.

[B]GBP / CHF[/B]: Looking back, stochs on both the 4hr and weekly chart were in overbaught, something I appear to have missed in my first look at the pair.

[B]GBP / JPY[/B]: The signals are all actually pointing to a sell off of this pair. Given the nature of the data to be released yesterday, I would have been wise just to stay away from the pair.

In summary, I feel that I just forced the trades yesterday. I’ll try to resume my cautious approach from here on in.

-Benjimang

maurizio77 · July 5, 2007, 9:29pm

Hi Peeps,

GBP/JPY has been a bit of a sh*t the last few days, so i thought i would broaden my horizons alittle bit.

Have ventured out to USD/JPY.

I was asked recently why i never seem to post a current trade…well i do actually… i just leave my entry arrows off to avoid confusion with the other lines i draw, so just for the person who asked i have included it on these pics.

The other reason of course is time, i could quite happily spend most of the night on babypips talking trading, unfortunately it doesnt go down too well at work when i walk in looking like a hung-over panda on a bad day!

I will post when i can

Anyway, enough waffle.

You will notice that my Settings are on 14’s instead of the 8’s i recently posted, this is simply because i am not totally conversant with this pair and want to see the stronger trend.

The process of entry and why to stay in the trade is the same though.

On the first pic you can see an SMA39, this is just an experiment, something i read, it isn’t part of this system…though having said that, if price were to drop below it i would be looking to sell.

Also on the first pic you can see my entry arrow, and a channel i drew our of curiosity…i don’t often use channels, but in this instance as you can see, if the range continues in this pattern (bouncing off each channel wall) then this trade is going to be sucessful.

Ok, Picture 2.

Here you can see in the yellow circles why and where i have entered, we had the EMA Cross, confirmed by CCI and confirmed by slow stochs…as you can see by the white circles, this is what i will be looking at now…the Slow stochs…if they cross upwards it’s gonna be a happy trade…should the fast stochs cross downwards, i will start thinking about a hasty exit before it whipsaws me…at the moment i am about 25 pips up on this trade…should price pass 123.10, i think we’ll be in for at least 60pips profit…not bad for a couple of days where the price seemed so schizophrenic.

will let you know how it goes … .

Happy hunting

Benjimang · July 5, 2007, 11:30pm

Hi Maurizio, nice to see you back again! Interesting you’ve selected USD / JPY to trial, as it is one of my focussed pairs today. I’ve been looking at this system right across the board with much success until the last couple of days. That said, I’m pretty sure Wed’s performance was a result of the Holiday, and yesterday was overtrading. I thought I’d stop putting my actual entry points and stop losses in here as that can easily be taken as trade advice, which this isn’t.

[B]USD / JPY[/B]: Possible Buy

We had a cross yesterday (although it seems Oanda caught this one earlier?!), so I’m looking to get in today. RSI is up over 50 and stochs are rising. Note that they aren’t on the weekly, but they are on the 4hr despite being overbaught. CCI isn’t up over 0 yet, but it’s over -100 and on a steady rise.

[B]EUR / CAD[/B]: Possible Sell

I actually think that this one looks like the trade of the day. We had an EMA cross yesterday, stochs are overbaught and falling. Although stochs on the 4h are heading into oversold, they’re definately still falling. CCI is heading down, almost pasing the 0 mark.

-Benjimang