PMS System

Trading Systems Free Forex Trading Systems
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[B]MY PMS SYSTEM[/B]

PMS stands for Parabolic SAR, MACD, Stochastic… the three indicators my system uses. No, it’s not named after the condition which some women go through at a certain time of the month. I just thought it would be funny to call it that. It got you to click, right?

What I like most about my PMS system is that it’s part discretionary and part mechanical, so it isn’t entirely robotic. I get my signals to enter trades mechanically (through the indicators), but I set my profit targets and stops discretionarily/based on support and resistance lines.

I think this sort of system works well for people who are trigger shy since you just have to follow the signals for trade entries. But at the same time, you can practice your technical analysis because you still have to set your stops and profit targets manually.

Also, it’s a day trading system based on the 30-minute chart so there’s always plenty of action, just the way I like it!:wink: haha!

You can use it on any pair you want. But based on my experience, ParSar reversals and MACD crossovers are smoother on EUR/USD, USD/CHF, GBP/USD, EUR/JPY, AUD/JPY, and GBP/JPY.

[B]Indicators Used[/B]
Here are the indicators and their corresponding parameters. I’ll attach a template for those of you using mt4 once I figure out how to do it. The uploader doesn’t seem to work :frowning:

• Parabolic SAR (0.020, 0.020, 0.200)
• MACD (12, 26, 9)
• Stochastic (14, 3, 3)

[B]Entry and Exit[/B]

For a signal to be considered valid, it has to satisfy these three conditions:

  1. parSAR has to be above price for short entries, below price for long entries.
  2. MACD lines crossed over.
  3. stochastic isn’t oversold or overbought.

The setting of profit targets and stop losses is purely discretionary. Initially, I had a 30-pip rule for targets. But later on I found out that I could maximize my profits by just exiting my trades only when reversal signals started to materialize.

[I]Profit targets: [/I] you can place them on the next support/level or the next major psychological level (levels with two zeros like 1.4000, 1.4100, 1.4200, etc.).

[I]Stops: [/I] you can set them beyond the nearest intraday levels: above resistance if you’re short and below support if you’re long. If you don’t want to think about placing stops, a 30-pip stop works too.

[I]Closing early:[/I] If there’s a new PARSAR reversal, close your trade. If the reversal is also a new trade signal, take the trade.

[B]**One rule that I always stick to is that my trade must always have at least a 1:1 reward-to-risk ratio.[/B]

Sample setup

I couldn’t backtest this system since its part discretionary, but if you wanna check out the signals it gave with my old trades you can find some of them here:

Angelina A. — MeetPips.com
Angelina A. — MeetPips.com
Angelina A. — MeetPips.com

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pms system.tpl

Let me know if you have questions!

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MACD is not showing in template … are you using a custom MACD indicator?

Thanks for sharing and congratz! :slight_smile:

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This may help.

IBFX - MACD Traditional.ex4

Thanks Xikky! :slight_smile:

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It looks good, only an alert would be nice, so you don,t have to switch every time.

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Thanks! :slight_smile: Yeah that was myu problem before. I always had to stay on top of it.

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On FF you can find sar with alert.

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Nice. like it. not complicated, simply

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Here’s the PMS system in action!

Last Friday there was a valid buy signal on GBPUSD around NY open. There was a ParSar reversal, MACD crossover, and Stochastic didn;'t indicate overbought conditions. As you can also see, price found support at the trend line.

Buying as soon as ParSar reversed at around 1.6330 and placing your stop below the intraday low at 1.6280 (that’s 50 pips), you could have just let your trade ride and taken profit at 1.6440 when the ParSar reversed again. That was an easy 2.2:1 trade!

Okay maybe it wasn’t that easy considering that Parsar reversals and MACD crossovers were just all over the place prior to this winning trade.

I’ll post PMS signals when I can. If you have questions, please don;t hesitate to ask :slight_smile:

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My PMS system gave me another signal yesterday, this time, with GBP/JPY. All three conditions (parSAR reversal + Stoch not oversold/overbought + MACD crossover) were might right when price was flirting with 132.00.

What I did was I shorted at 132.00 itself, and put my stop just above the recent spike up, at 132.40. I was going to take profit at 131.00, but I parSAR reversed midway, so I exited at around 131.50.

Good enough for a quick, slightly-better-than-1:1 trade. :smiley:

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There was a pretty smooth signal on AUD/USD yesterday. MACD and Parsar weren’t choppy so I pulled the trigger as soon as I saw the ParSar dot reverse. I was able to jump in at 1.0715 and rode the move all the way down to 1.0665, until the dot reversed again. My trade yielded a return-on-risk ratio of a little over 1:1 because I placed my stop above the day’s high at 1.0760. Had I kept it tight and just set it at 1.0740, I would have gotten a 2:1 RR ratio.

Now it looks like there’s another PMS signal in the making. The parSAR dot just reversed, Stochastic is still inching out of the oversold territory, and MACD lines are about to crossover.

But I don’t to get ahead of myself on this one. I’ll wait for the lines to actually cross before pulling the trigger. My stop will probably be around the session lows at 1.0635.

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Meh! As it turns out, the parSAR reversal that I pointed out yesterday was nothing more than just a fakeout.

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My PMS system generated another signal on EUR/USD yesterday but I wasn’t able to catch it. I took the one on AUD/USD instead. Poop.

Anyway, as you can see the signals lined up (parSAR revesal, Stochastic not oversold, anbd MACD crossover). Shorting at 1.4665 (immediately after the reversal) with a 40-pip stop (above 1.4700) would have been enough for your trade to yield a 1.5:1 return on risk ratio as you would have exited your trade at 1.4605 when the parSAR reversed again.

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Oh yeah! I managed to make some money using my PMS system yesterday. I shorted GBP/USD when the signals lined up. I entered as soon as I saw the parSAR dot reverse at 1.6445. Placing my stop above the dot at 1.6485, I held on to my trade until another reversal materialized at 1.6365. By doing so, I was able to enjoy a 2:1 return on risk ratio on my trade.

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interesting system you have there mynameisfez… nice and simple.
just one question… do your three conditions (parSAR reversal, MACD crossover, stochs in middle) have to happen in a specific order? like parSAR has to reverse first, or MACD has to cross over first?

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Nope! :slight_smile: I’ve already tried to see if a certain order produced more profitable signals (or generate fewer fakeouts) but I came to find out that the crossover and reversal can come in any order.

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I wasn’t able to catch this one, but it was another valid, winning trade signal from my PMS.

Shorting at 1.4495 when the parSAR dot reversed and the MACD lines converged, your trade could’ve yielded a return on risk ratio of around 3:1 if you placed your stop somewhere around 1.4550 where the dot was.

Taking this trade would’ve been a little tricky though. Notice that Stochastic was already nearing oversold conditions and the signals prior to this one were a bit choppy.

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Whaaa! Missed another winning trade on my PMS system yesterday. I saw the signals materialize but I opted to stay out of it because I noticed how choppy the reversals and crossovers were before this winner.

Dang! Had I entered at 131.00 when the crossover materialized (the parSAR reversal happened prior to the crossover) with my stop at 130.50, my trade would have yielded a return-on-risk ratio of about 2:1 since the next parSAR reversal didn’t happen until 131.92.

Speaking of which, along with the reversal, another MACD crossover materialized. With Stochastic not indicating overbought conditions, this makes it another valid PMS trade for a sell. I was able to jump in at 132.00 and I left my stop at 132.30. Let’s see how this trade turns out.

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Hello,
Nice system Im starting to like it. Can you keep posting charts?
Do all the signals usually happen simultaneously? If not, then how long is it appropriate to wait for the next signal to occur?

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Wow someone actually likes my system. Yay me! Okay, I’ll post in a bit.

As for the timing of the signals, I find it rare for all of them to line up at the same time. I usually just use my intuition to gauge how long I should wait for the crossover or parsar reversal to occur. I have to say, it’s no more than an hour and a half. Also paying attention to candlesticks help.