I feel for you.
Today was a nightmare. This system has not been doing well for me. I don’t even want to talk about it, but this strategy has really been terrible for me. Just a very high number of losing trades this past week and a half, with only one day (Friday) that netted positive pips (+63).
I made my bad situation worse today by doing two things:
a.) Increased my SLs to try and save bad trades. All day stops were being hit as prices ran wild.Toward the end of the day I tried to repair the damage by expanding my stops to try and get what I’d hoped would be turnarounds. Bad move. The idea of having several tiny losses of single-digit stop losses until the good setups came would have been better.
b.) Like Rui, I started revenge trading at one point, banking on seeing three correlative pairs finally (I thought) forming true HL/LHs and going my way. Didn’t happen, and with the larger SLs the damage was catastrophic.
Shr1k, you mentioned something to me about improving the entries for this strategy. Clearly something needs to be done better. I had this passage from one of your prior posts, is this what you are talking about:
I have a daily chart of each pair with the 2MAs. I look at each pair if price is outside the MAs on any of the pairs I draw at the level price crossed the MA. The line is approximate I draw it on the daily chart its not used as an important price level once its drawn I just like to see it on my chart. [B]Then I drop the chart down to a 5min the 2 period MAs are now on the 5min chart.[/B]
[B]I will use a short trade as an example. I watch the MAs on the 5min when they start to slope down I wait for price to be at or above the high ma. That’s my entry; usually price will clear the spread pretty fast. I try not letting a trade go negative after it breaks the spread. If I have to close a trade at 1/2 pip profit and reenter when price gets back to the high MA that’s OK with me. If price never clears the spread I have a money management system I use to decide when to close trades. It’s posted around here somewhere. I try not to let a trade go very far against me. I do use stops but they are outside of the point when I will manually close a trade.[/B]
[B]I exit (profit) when price starts to move back against me. If price goes 10 pips my way it might move back 5 or 6 or more before it goes further my way. I will bank the 10 or what ever I can get when price stalls. Then wait for my entry again.[/B] On my OANDA chart I have a 20:2 BB I call it quits on reentering when price on the 1hr makes it near the lower BB. The way I do this I have to watch the open trades. I have bad luck or no skill at setting TP and SL and walking away. This has worked very well for me.
In the pdf you show a long trade at the upper bol on the 5 min chart. Even if price is oversold on the 1 hr entering overbought on the 5 min chart(for a long trade) is a bad idea if you want the trade to go your way quickly and cover the spread. I like to be on the winning side of a trade and close it at a pip when I think its bad then let it run to a stop.
LH and HL give you the direction price is moving on a chart. I would still try to get the best entry I could based on what you think the next candle on the 5 min will be.
Yes, the chart example screenshots in the PDF were done quickly so I could get the first draft out. And I also need advice like anyone else trading this to get better entries.
I intend to make another draft of the PDF with revised screenshots showing how to Buy off the lower 2-p MA on the 5m and Sell off the upper 2-p MA.
However, often when price is forming HLs and LHs price does not seem go back to the outer boll away from the direction you want to trade – which you rightly indicate would be the very best possible entry. Just glancing at a couple charts, it looks like if you can get the order off the opposite MA and price is around the mid boll you might consider yourself fortunate – and that should be enough to cover the spread, at least.
This is why I am asking for feedback and advice.
However, often when price is forming HLs and LHs price does not seem go back to the outer boll away from the direction you want to trade – which you rightly indicate would be the very best possible entry. Just glancing at a couple charts, it looks like if you can get the order off the opposite MA and price is around the mid boll you might consider yourself fortunate – and that should be neough to cover the spread, at least.
Each situation is different. The HL and LH just show a trend on the 5 min chart. What you said above is true, my point (I think you get it) is its still a good idea to cherry pick your entry on the 5 min chart even if the 1 hr chart is overbought/oversold. There are many ways to pick an entry bollinger band or MA channel or candle pattern or feng fooye:D.
Here’s an example of what I think we are talking about. This is a screenshot of the current 5m chart for USD/CAD. Price is outside the upper daily MA and after switching to the 5m we can see LHs already forming.
Let’s see if I understand your previous post correctly:
A trade ought not be placed off either the outer Boll or outer MA that are in the direction of our trade if at all possible, if I understand you correctly.
Exactly;)
once you get the spread + a few pips back you can think with a clear head and decide if you can let it run or close it before it becomes a loser and wait for the next opportunity.
It does not always go as planed but why not give yourself the best chance and try and decide to close a trade on the + side even if its just a little bit.
Hi Rui,
Thanks for this. What purpose does the EA serve? Is my question jumping the gun or will it all be obvious to me the moment I place the EA in my MT4?
Thanks.
Cheers.
this EA don´t place trades by its own… you draw trendlines and they work as pending orders and SL lines… in diagonal
prince yesterdays was a killing day… and even so if i haven´t take some crazy revenge trades i would almost end the day at BE… a system performance is measure not by how it works in a good market conditions but how it control your losses in the bad conditions…
this is not a great win ratio system… is a rr ratio system… gives good entrys with the possibility of make a good return on your risk… for me a litle bit more than 50% of the times… and makes profits.
adapate it to your own trading metodology is a good think and hope you´re succeed;)
Thanks. Will try it out!
The win ratio is not better than 50/50? The point that number of wins does not have to greater than number of losses to have a winner methodology is understood.
No, it is definitely not better than 50-50, I can attest to that. 
The trick to making MMTT work - I have learned the hard way - is keep all the losses to as few pips as possible. Cutting trades off when they go just 6 or 8 pips against you can be frustrating, but it seems that’s what is necessary to make this strategy work.
if i had use a 1:1 rr ratio the win ratio will be very positive… above 70% i believe… because the SL used are very tight…
most of my lost trades made 1:1 or 1:1.5 before get back and hit the SL negative or at BE… in the long run this will be very less profitable than let trades run for at least 1:3 rr ratio… even with a worst win ratio…
but that is my MM and is not suitable to everyone.
and merchantprince is right… the losses need to be cut at the start… when trading in 5 min chart we can not allow a loss of 20 pips… because is not need so much to see the trade went bad. my initial SL is only get hit in rare ocasions… the SL is a backup is not to be hit
the SL is a backup is not to be hit
This is important;)
Sean, I’ve seen you mention the 1H chart several times in this thread and your correspondence with me. Can you enlighten us as to what role the 1H chart has in your version of MMTT?
Now that my computer is working again. I can get to the chat room. Is anyone still going there to chat?
There’s often 8 to 10 of us in there most days, particularly the London/NY overlap hours.
I would like to join in but those are the hours I’m at work and the site is blocked at work unfortunately. It’s a school system and there’s lots of sites blocked. Have to protect the kids from getting to the wrong things.
Nothing special about the 1 hr chart. I look at all the charts (they all show the same thing shh!!) I find a 1h chart good for seeing s/r levels that are close enough to my trade to have an effect on the outcome. I like the levels price likes to visit often ;).