Thanks for detailed reply. I changed that from 14 to 5 now. Bro are you sure your RSI levels are also 30 and 70 like mine or do I need to change them too? In your opening post you said that once RSI cross the 50 level thats the signal point but I dont know where is the 50 level? This is how my RSI looks like.
I myself will look into this system and if necessary I will also try to add some more bits to it and if I get good results I will share and if you find something good please share the new tweaked strategy here. I am thinking to add a big moving average like the 200 Simple moving average and only take long trades if and when the cross of 5 and 50 ema happens above the 200 SMA and go short when the crossover happens below the 200 SMA. This is just to be on the safe side and to avoid whipsaws as usually markets trading above the 200 day moving average tend to be in longer term uptrends. Markets trading below the 200 day moving average tend to be in longer term downtrends. I am no expert but will experiment with this system. Please solve my RSI issue. Thanks.
As I am still on Demo so there is no harm in testing this system without RSI so just to test the crossover I took two trades without the RSI confirmation as like I said I dont know the 50 RSI level point. Anyhow, these are two trades I took:
[B]EURGBP long from 0.8590 (SL 0.8490 , TP 0.8705)
GBPCHF short from 1.43219 (SL 1.44219 , TP 1.4144)[/B]
Both are on Daily charts. Can you please have a look and share your thoughts on them. Bro is it possible that you also share your trades here with SL and TP points. In this way it will be very easy for users to understand this system and also it will make this thread more appealing and interesting. I will share my trades every time.
@ Sandybeach, I will upload some screen shots when I get home this evening from work, and show some of my set ups then, as cant really do this at work…
@ Kashiff, if you insert an extra line into your RSI you can then double click on the line just placed and right click after and it should give you the Horizontal line properties, click on it and change the line to 50…
As said above I will upload some pics tonight of my set ups etc and also one where i place a line on the RSI…
The two trades you took looks good though, when did you take these? I had a look on my MT4 platform and see what you were saying, although as I also said yesterday what I did with mine is basically wait for the candle to close like in the set up for the EUR/GBP and then also the ema’s have crossed and the RSI was already above the 50 line, when it is like that I would of waited for the second candle to close above the ema’s aswel and then open my trade, but also on the daily you miss alot of action, but it can sometimes go longer though…Atleast with the EURGBP you took it did go up some hundred odd hundred pips and retraced, I hope you had a trailing stop in there or do you keep moving your stop loss up more?
On the 1st of August that was the highest point so far so I would of set my TP there, but i would definatly have put in a trailing stop just incase this made a retrace though… as it did and you would still have been in the money though… If you look on EURGBP for today basically there might be a set up coming to go short, although this is still today so I will wait and see what happens after today and where this candle closes… If it closes below my EMA’s and RSI is already on the 50 line sofar I might take it, but seeing as the weekend is coming up I might wait for tomorrows candle to open and close below my EMA’s and then Monday first thing or when the markets open place a trade short…I will also place a stop loss above my 50 EMa (again this is quite a big stop loss by then) but then set a traling stop in, and once I am over 200 pips I will cancel my stop loss and set my Trailing stop to 150
If you look on todays EURGBP you will see on the daily the ema’s are crossing, so what I did this morning is go down to 4 hr chart so long and saw basically at 0:00 this morning (last night) the 4hr chart has crossed also and has closed below the EMA’s so basically I missed that trade so long and then again at 4 this morning you will see a candle open and close below both ema’s which i think is quite a good signal, yet I missed it as I was asleep, but when I got to work this morning at 7 and saw this, I waited for the 8am candle to open and as it did I got into a trade, although this time what I did is basically place my stop loss above my EMA50 and it was about 120 pips if I am not mistaken, so I had to pop out and see some people today with work, and only got back now to find the price has moved down since 8 this morning and it is now 4pm and the price has moved down just over 400 pips, So I was lucky enough to get in on it, so I am gonna let it run and see what it does, although I have already cancelled my stop loss and put a trailing stop of 150 on so basically at this moment i am standing on 423 pips… Thats for this morning so far, so as I said before even though on this method I like the daily charts I will go down and see what the lower time frames do and I havent tested this on the 1hr charts yet…only 4hr and daily just bare this in mind though… By the way it stands now the candle will close on daily charts under the ema’s so if it was not for tomorrow being friday I would of opened another trade tomorrow aswel. When I get home later on I will post my screen shots
Okay so see the trade I took today I was explaining earlier…
Yellow line shows ema crossing each other…
*Purple line where 2nd candle closed and where I opened a trade short at 8 am this morning…
*Blue line is where I put my TP
*Red line is where I place a stop loss
So after the 3rd candle closed and I was in profit I cancelled my stop loss and put a Trailing stop of 150 on, it went down for some time and then earlier it hit my trailing stop…
It looks like the best approach is to get in the trade immediately upon the crossing of the two EMA’s. But this is not always possible, so what do you do if you show up after the cross has been made and a trend is underway? How do you assess whether to ride it?
Thanks for posting your system and your great attitude of sharing and patience.
As the post yesterday, what I would do is see how my trend is going, I will go to the daily and if it shows it has a possibillity of going down, then on the 4hr as above I see the candles have closed below ema’s, I will get into the trade on the opening of the third candle though…As I did yesterday with this one, which seems to have gone the way I planned… I can not gaurantee it is going to go the way I said it would… But as you say as soon as it has crossed and the candle has closed below EMA if I was awake at that time I would of taken the short at the second candle already, but this did not happen as was in lala land so when I woke up and saw the third candle ope I took the trade.
Okay so I said on Thursday I would not want to open a trade seeing as the weekend is coming up but decided against it anyway and took two trades
Above is the trade for AUDUSD and you can see, so Thursday being the yellow circle is where I opened a trade, as the previous candle could of been taken but again I missed it as was looking at other currencies… But the second red candle had a open and close below my 5 ema, so the yellow circle is where I opened a trade, and in the bottom you will see what my AUDUSD is standing on at the moment, notice I have cancelled my stop loss. The blue circle shows where I placed my TP on this pair
Okay so this is the second trade I took, yellow arrow is where the candle crossed the ema’s and closed below them both, also the 5 ema was busy going down already below the 50 ema…
Blue arrow is the trade I took short and now will just let it ride a bit and see where it goes, obviously I placed my TP a bit close but the white line at the bottom is where I will change it to once the markets open Sunday evening…
But I will set my trailing stops in also once the markets open and will place a 100 trailing stop behind each of my trades
Do you have a suggestion on which time chart to play this strategy on? This is a good strategy no doubt about it. Lets say I want to play this on a 1 Hour chart cross, is it advisable what are the points i should look out for? I know they are no 100% guaranteed results here. Just some accuracy would be good as you are experienced in this.
I will not be able to say yes or no? I guess if all the rules are met then you can use it on 1hr time frames and so on, but I would say keep an eye on what the 4hr and daily are also doing though, you don’t want to go against the trend too much either…
I have used this on the 4hr and daily only so far though…as am at work during the day so cant sit and watch the markets the whole day, if I see a good set up on one of these time frames I take the trade although I go on now and again to see what it is doing though.
I am still testing this method so don’t know how the other time frames work, if I have some time I will be going through and see if this could work on lower time frames
I think I understood now. I have added a line from MT4 horizontal line option to the RSI and changed its properties to 50 like you said and its looking like this. Please let me know if its correct now:
Glad to know that you like the idea of putting a 200 moving average. So, how are your trading strategy now? Do you now only go short when 5 and 50 MA crossing occurs below the 200 MA and vice versa?
Unfortunately, my two trades which I took both ended in a loss. I had SL of 100 pips for both but it was hit. In case of EURGBP I had one problem. I entered long based on MA crossing on daily chart and 200 MA was below the 50 and 5 MA crossover but later when I checked the 4 hour chart (after I was already in the trade) the 200 MA was above on the 4 hour chart. I mean what to do in situations like this when 200 MA is up in one time frame and down in other time frame?
I am looking for another trade now and will update if I find some good setup.
I get what you are saying, I wanted to say this but did not think of that, I will be running this method on the 1hr and 30 min on my demo ACCOUNT this week and see how it goes, will keep posts updated with screen shots etc
Well I also noticed when you took these trades though, that the rules were met but then as I opened a trade myself and then read your post about the 200 MA and then added it I saw basically I had gone short on a trade and I was still above the 200 MA, so I tried getting out that trade as quick as possible…
I will post a few pictures tonight when I am home and show what I would do in a situation like that, as to be honest, normally you get a retrace back towards the 200 that I have seen in a few tests i been doing… So I would wait for instance to see if the price breaks the 200 and if only one candle closes above the 200 MA I would wait for it to come back down before entering a trade with the same rules as before though or if it wants to go up I would wait for both 5 and 50 to cross 200 also.
Sorry Kashif, yes my RSI also looks like yours this is how I place my 50 line on the indicator.
As you say what to do in this situation with the 200 MA being above on one time frame and below on another, I would look out for these, look they wont always sync but just to make sure as I said try not going against a trend if you using the lower time frames
How have you been getting on with this method though?
I am seeing alot of trades that could of been taken on lower time frames as well but also when I see them I doubt myself as dont want to go against a trend in the higher time frames so need to look out for that though
Thanks for the reply and for RSI explanation. Still testing this system and still there is long way to go and some more tweaks required. Like I said I only had two trades so far with 100 pips SL and both hit the SL. After that I didnt find a good trade setup on any pairs so far. I now went to 4 hour time frame and will see if I find a new trade. Please keep your trades updated here. Thanks.
