Some of my thoughts + Trading System

Trading Systems Free Forex Trading Systems
1

My Day Trading Tips

Hello fellow Pippers and Pippettes,

The names� Lang� Effi Lang

When I started trading the Forex a year back, it was a means to answer circumstances of immense financial desperation.
I had gone through every online program I could think of and through all the scamming pyramid schemes.

I just knew there had to be something better� so I looked and searched and gnawed at every opportunity my nose could smell and my eyes could see to better taste the potential for success and gauge a possibility for investment.

Though, people as they are, uncontrollable and lively� naturally want things to happen their way in life, and if you�re anything like me, you hate wasting time.

Time however I�ve understood through time itself is something very powerful and it can break or make you.
I believe humans on this earth are a parasite on times shoulders, leeching on it and poking it in the rear with a sharp pencil in a selfish endeavor of speeding things up in their direction and eventual benefit.

Time nevertheless, being a part of nature has its predefined path and destination, and granted the necessary development and breathing space, it can achieve wonders beyond your imagination. All we need to do to take advantage of it is just modestly place ourselves within the streaming channel of its course and relax until we reach the ultimate peak.

The reason I am saying this is because, it takes some people many years to acknowledge these facts.
I can guarantee however, than anything given the sufficient amount of time and breathing space coupled with a positive attitude can flourish to very productive heights.

My journey through the complex world of Forex has only just began and I am willing to dedicate many more years of my life to achieve a humble symbiosis between myself and the FX market.

There aren�t many jobs or occupations today that can offer what the challenge of becoming a Forex trader can.
Trading is not just a means of income, it is an Art and as with any other it requires an extremely persistent state of self discipline, which can be achieved only in cooperation with patience, a positive attitude and a goal.

GOAL! People�. Read it well and remember it.

If you do not have a goal, you are just floating about in endless space.
The difference between a person with a goal and one without is that when the first trips, tumbles and falls� he knows, why he has to get up and even if the fall spun him around 180 degrees, he would know that all he needed to do was turn around another 180 and move forward.

The latter however� will fall, they will get up and they will continue moving forward, where to though � Is it the same direction, or did they go left or right this time? � nobody knows

The fastest way to success is a disciplined plan. So take a day, a week a month a year if you have to, but write a plan and keep a diary, because that�s the fastest way to mature as a trader.

Being a student of the Forex, is being a student of life, it is a difficult psychology lesson which will lead you through deep self-exploration and if you�re not prepared to take yourself on, don�t.

A persons potential is almost limitless in this world and the Forex is a trading art which will have you delve into your inner most thoughts and intimacies and help you tap and develop your potential at one of the fastest paces possible.

You will not only better yourself as a trader, but as a person, a brother, a parent and a contributing member to your society.

If a man could conquer himself, he could conquer anyone and the world. With time the FX will teach you nothing less than just that.

For everyone who is just starting out.

  1. You will loose money
  2. You will cry if you�re emotional
  3. You may even reach the verge of suicide
  4. You will have people try to put you down
  5. Depression
  6. You will want to give up
  7. You will want to give up once more
  8. You will want to give up again
  9. You will never give up if you have a goal set, so set it and you will have reason to go on.
  10. You will have good trading days
  11. You will have bad trading days
  12. You will realize that a minimum of 2:1 income to expense ratio may as well be just as important as trading itself
  13. You will try many trading systems
  14. You will most likely develop yours at the end
  15. You will use 100 indicators at some point and most likely use just a few at the end
  16. You will realize that keeping a trading diary and plan. Is the same as your mum telling you to get your sleep: its true, If u do it u will be healthy and if you don�t you�ll always fall sick
  17. Don�t get greedy!
  18. Trade Pips not Money
  19. 10 Pips a day is good
  20. 20 Pips a day is great
  21. 30 Pips a day is awesome
  22. Accept loosing at most 50% of the time and winning the other 50%
  23. Get a life. Exercise, eat, sleep. The better your health the better your trade.
  24. Keep it professional! Take breaks! Wear a suit and a tie if you have to even though you�re going to the next room, but have the right mind set, this is business and you are both the President and the Employee
  25. Don�t withdraw all your money from your account, compound what you can and aim to exponentially increase your lots while keeping your Pippage the same.
  26. Patience and understanding is key and it is the difference between a loosing trade and a winning trade.
  27. Educate Yourself. Dumb people loose money and Smart People make it in this trade.
  28. Remind yourself why you do what you do every once in a while.
  29. When you loose a trade have an optimization protocol:
  • Ask yourself why you incurred an expense
  • Understand why you incurred an expense
  • Tell yourself what you need to do to avoid a reoccurrence and remember what you said
  1. Try not to trade news

  2. In most cases if there is something you can�t explain with Technical Analysis. It�s normally news� fault.

  3. Have at least 2 internet connection setup, 1 for back up.

  4. Don�t trade when you are tired, drunk, sleepy or emotional

For those of you who are still reading I would like to share my key trading system with you.
It is very simple and is based on the same slow / fast MA crossover method detailed in the School section of BabyPips.

First of all you will need to set up your charts so do the following:

  1. Open up a new Chart / EUR/USD or GBP/USD for example.
  2. Set a 5 E-MA (Colour White)
  3. Set a 10 E-MA (Colour Red)
  4. Set a 20 E-MA (Colour Green)
  5. Set a 50 E-MA (Colour Blue)
  6. Set a MACD with: 5,10,10
  7. Set an RSI with: 10
  8. Set a slow Stochastics with: 10.3.3

That�s it.
Trade on preferable H1 / H4 and D1

Lets see it in the works.

Profit Range: 20 to +300 Pips per trade

It is extremely easy to follow:
Entry Criteria:

  • When the white 5 EMA crosses the Red 10 EMA AND: the following requiremets are met:

  • RSI has broken over or below 50 (long / short)

  • MACD should be over or below 0 (long / short)

  • Stochastics are not in an oversold or overbought zone or they have just broken out of an oversold or overbought zone

Exit Criteria:

  • When the price crosses the 5 and 10 EMA and RSI is breaking 50

Comments:

In a good trend or short term move the EMAs will line up in this manner from bottom to top (bullish) / reverse for bears

EMA 50
EMA 20
EMA 10
EMA 5

By the time the price breaks 50 EMA you should have long closed your position. Its a matter of a little practice and getting use to and you will be able to determine an optimal exit point based on the crossover on par with the indicators.

The key in trading is to loose all emotion. The best way to do it is to have a mechanical trading system.

For me this is it.

Regards,
E. Lang

eur.jpg1024×768 193 KB

2

beautifully written Effi.
made me laugh, cry and then laugh again.

3

very nice!

Thank You
md41904

4

Hi Elang, nicely done :slight_smile: .

I am trying to setup my chart. Can you please elaborate on this:

  1. Set a MACD with: 5,10,10 (what is 5, 10, 10)?
  2. Set a slow Stochastics with: 10.3.3 (what is 10,3,3)?

I just want to make sure I have the same setup on my trading platform.

thanks,

5

Dear RamRocket,

I’m not sure what chart you use, but you should have an option to define the parameters of the Indicators you use.

Try and find out how you can edit the options for your indicators.

e.g: I right click on my respective indicator and i get a drop down menu which has a “Properties” option.

Further inwards you should find the following availabilities for each of the indicators:

RSI: Period: "10"
MACD: Fast EMA: “5” / Slow EMA: “10” / Signal SMA: "10"
Stochastics: %K Period: “10” / %D Period: “3” / Slowing: “3”

Those are the options you need to configure.

6

Hey guys.

I would like to give you an update on todays trade using this system.

Feel free to view the attached image i’ve prepared.

Regards,
E. Lang

todays trade.jpg800×720 184 KB

7

Can u pls tell me the time zone(i e GMT) u have used in your charts as it is 11.10 EST now n if it is EST then u r a great guy to post it so soon

8

Thanks Elang,

That’s what I was looking for. Looking for equivalent acronym on my platform.

9

Happy i could help.

I will keep updating on daily trades here in the hopes of popularizing this system for the people who are still devoid of it.

Regards,
E. Lang

10

Hi E. Lang,

Thanks for sharing your system. I have a question on this chart though. Why did you exit where you did? I thought you have to wait for the 5 EMA to cross back up over the 10 EMA. Appreciate your help.

11

I read your post and tried the setup on my charts. Well, I said…Fantastic! The MAs line up is very good for GBPJPY swings on the chart.

I find it very helpful for all of us, and it’s simple, that’s kind of you. but I have a question

You said:
3. Set a 10 E-MA (Colour Red)

but then said:
Entry Criteria:

  • When the white 5 EMA crosses the Red 20

So which color is 20EMA? or you meant 5 and 10?

12
  1. Don�t trade when you are drunk
    HAy, can i disagree with that? lol!:slight_smile: JK
    Besides that everything is well put “my compliments to the cheff!”:stuck_out_tongue:
13

My apologies.

The RED E-MA is 10!

White - 5
Red - 10
Green - 20
Blue - 50

Regards,
E. Lang

14

Good morning everyone,

I would like to update you for today.

Please feel free to view the attached image i’ve prepared.

"Trade Update

Good morning from me guys.
The time is 09:30 GMT + 2 and I am just putting in the daily update.

Before we move forward, I just want to clear up �why� I exited where I did on yesterdays trade.
http://www.babypips.com/forums/attachment.php?attachmentid=53&d=1166104541

For those of you who are just starting to read this thread. Entries are colour coded BLUE and POSITIONS EXITS or SQUARES are colour coded RED.
Now back to my elaboration of my exit reasons… Even though we�re trading a mechanical system here, it doesn�t mean that we have to switch into �Dumb� mode; having an automatic gearbox doesn�t mean the steering wheel is going to turn on its own!

The reason I exited was because the price hit S1, which yesterday was located at 1.3169. Supports can be whacky sometimes; today it goes straight through, tomorrow it bounced with 25 - 50 pips in a few seconds… I preferred to play it safe in that situation and take what profits I had, rather than the possibility of half or less later.

Either way as you�ll notice the price did bounce off where we bought back and Squared and if you have set up your MAs like I advised before, you would realize the 10 MA handled the price vary nicely - this is a good sign of continuation in the same direction.

The second reason why I closed of the trade was Stochastics - note how they went into the oversold zone, floated about in there (Which is the continuation of the down move) - then started trying to break out of it to come back up.

This is normally where consolidation starts and you should try and get use to these signals so you can prepare yourselves, as after each consolidation there is a breakout and the 5/10 E-MA crossover is a wonderful breakout signaler.

As you will notice on the chart I was lucky enough to wake up, catch the taxi to work and sit in front of the pc just in time to catch another good entry point signaled by my system.

I�ve entered a long at 1.3145. Although I was a little biased, due to the fact that 1.3131 Support hadn�t been tested yet + the obvious imminent 5/10 crossover on the Daily Chart all pointing to a bearish sentiment.
Regardless, I�m still holding the position now, its broken through 10,20 and its now testing 50 E-MA.

As I mentioned before a price breaking the 50 has intent, so stay alert. At the moment there are two scenarios; 1. The price bounces of the 50 E-Ma and comes back down to test 1.3131 after which we might have a break leading to a much further down move OR 2. The price breaks 50 and goes for Resistance of 1.3190 Or in other words the 100 SMA - colour coded pink, then R1 at 3223, then Resistance at 3252, 3293, 3335, 3364 etc.

These are just scenarios, as a trader you should always have at least 2 or 3 scenarios in order to prepare yourself psychologically.

Why psychologically you ask? Because �Fear� and �Surprise� two of the feelings we try to avoid are spawned by NOT Understanding and NOT being Prepared! If you are aware of something and you expect it as a probable occurrence, then when it happens it can�t surprise you, which in return leaves you calm, cool and ready to react optimally with a sober mind. That is all for now."

Regards,
E. Lang

Daily 1.jpg1024×1152 355 KB

15

Trade Update

Hello again guys.
As I mentioned today there were two scenarios. The first was that the price bounces of the 50 E-MA on the 30 Min Chart and comes back down to test 1.3131 Support.

I guess the small move, which I caught at 1.3145 was just a little breather and a last attempt by the bulls to take back charge before the bears get back to their inevitable test of 1.3131.

Either way from 3145 to 3171 was a 26 move. When RSI broke above 50 and the price broke 50 E-MA, I moved to a higher time frame H1, to gauge if RSI was going to break 50 on H1.

A confirmation of this would have been reassurance to stay in the trade, but RSI had no luck breaking above 50 on H1, rather the price was handled by E-MA 20 (Green) on H1, ending up with a shooting start (bearish). After I saw that, I moved back to M30 and closed my position when the price came back down at .3165 for a 20-pip profit (ENTRY 1.3145).

I SQUARED at 3165 with twice as many lots as I Entered the trade so I could go short immediately at the same price 1.3165 as I determined a fall back down to try and retest 1.3131.

Now, I don�t want you to get confused, the system works, but I am used to it so in a lot of cases I know when to enter the trade before the signals show up. The more you use it the better you will get at being able to predict a 5/10 Crossover before it happens. You will also notice that I�ve implemented Support Lines (1.3131), Candlestick Patterns, Multiple time frames and simple logic to get bet results.

Try and educate yourself in different areas, so you can see more every time you look at the chart. It is crucial if you want to trade better.

Now I am just going to sit back with my short from 1.3165 and hope for a retest and break of 1.3131 Support, also watching the System Indicators and MA, RSI, Stochastic hints.

UPDATE:

As you can see guys, the retest of 1.3131 definitely happened and Scenario 1 was confirmed. All in all with trade 1 and 2 today we�ve manage to bag about 90 pips, which isn�t too bad for a few hours you might agree, no? :slight_smile:

I know I entered a little earlier on the first charts above, so I posted another set of charts which shows WHERE you should have entered using my system, either way you would have still made about 50 pips today if you went only with the second trade (Short) and well above 50,60,70,80,90 if you shorted where I did around 1.3165 on the first set of charts.

I would like to take the opportunity here as well to emphasize on the importance of multiple time frames when using a system like this. When both a fast and slow time frame confirm crossovers - it is an all go situation so try and gauge things on a multiple level in order to better determine a more accurate course of action, whether it be
Entry, exits, position addition etc.

Regards,
E. Lang

Daily 2.jpg739×1200 266 KB

16

TRADE UPDATE:

Well there we have it… a perfect example of what the news can do to you. If you got caught in this newsbreak, you got it bad.

Always keep up to date on news releases and try and exit your positions before they are released or you will eat dirt!

In any other case, I would have held this position as everything was pointing bearish, but knowing CPI is coming out the smartest thing to do was take a hint front the Indicators and try and exit with the most profit.

Signals:

  • MACD Crossover
  • Stochastics Oversold Zone BREAKOUT
  • RSI had broken over 30 and was actually up to 50
    instead of its initial direction of back down to 30
  • That’s all for today folks - if you followed through with this from the start you may have bagged at least 20 to 65 pips - Not bad for a days work

As an experimental trade relying on Dows theory, that the news can’t change the majour trend, i’ve shorted at 1.3180 - i still believe the bias is still bearish here.

So we get a mysterious white package in front of the white house and not so hot of a CPI, so what ?
Let’s see what the forces of nature can do for this trade :slight_smile:

I will let you know how this experiment goes.

Trade.jpg1000×800 238 KB

17

Elang, I’ve completed setting up my charts using your 4 ema system. It looks promising. I am testing it now on gbp/usd,eur/usd,usd/jpy,usd/chf, and usd/cad on the 1H chart. Well see in the next few days. Are you trading this system live?

Yes, I trade with it on both my live and demo accounts, i try and enhance it on my demo account every day, where as i adhere to strict rules on my live.

The results are promissing as you can see in the trades logs in this thread.

18

The experimental positionentered at 1.3180 has gone great so far and it just goes to prove that D. Jones was right when he said news can�t change the market trend. After having digested the news the price has moved back to its previous bearish plans.

Previous Supports have been broken and thigs are looking very well.
Being the end of the week, i�ve set a Trailing order with a 30 pip stop, so i am just going to let it run.

My thoughts are that the price will most likely try and test 50 E-MA on the daily chart, till then i will have a good profit and have nothing to worry about.
Overall today has been a great trading day with over 60 Pips profits locked in and over 100 trailing with a 30 Stop Loss.

I will see how things look on monday, but either way my legs are kicked up and i�m happy.

Please view the attached image.

Regards,
E. Lang

PS: More on Monday! (Dont trade Sundays)

Trail.jpg1024×864 264 KB

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If you can, can you please clarify the purpose of the other 2 EMAs? What is the purpose of 20ema and 50ema. thanks

20

Dear RamRocket,

Kindly take a look at this thread: http://www.babypips.com/forums/showthread.php?p=1067#post1067

I feel it may be able to answer your question.

Regards,
E. Lang