This is not a Holy Grail (Simple Method)

Trading Systems Free Forex Trading Systems
1

Hello,

I want to thank anyone testing this in demo mode.

First, I suggest that you get a demo account from vtsystems.com and download VT Trader platform here:
http://vtsystems.com/en/products/

Why VT Trader
It will notify us whenever moving averages cross using an arrow and audible alert. You do not have to watch these lines too much.

Prepare your VT Trader
Let us prepare your VT Trader first.

  1. Close all windows, just leave the main panel on left which contains currencies.
  2. On left panel, click “Charts” > then select pair “EURUSD” or “GBPUSD” > then select timeframe “15M” > then select “Heikin Ashi” for pattern/candles. a new chart should be now opened. Right click on main chart and select “Chart Properties” > Rules > Grid (Uncheck visible).
  3. We will add an automatic trading signal generator. Right click on main chart, select “Add Trading System”, then select “VT-Moving Average Cross System”. Modify default values with:

Close
5
Weighted
Close
10
Simple

  1. Right click on main chart, select “Add Indicator”. from the list
    select “Parabolic SAR” and in the color/style panel make it more solid by increasing width of points. (To see them easier on chart)

  2. Right click on main chart, select “Add Indicator”. from the list select “Direction Movement Index” and insert it (default 14) Click ok. You should see something like in my attached picture. Arrows generated on cross with sound. Done!

Now we added a signal generator for 5 Weighted and 10 Simple cross, moreover we added the Direction Movement Index (ADX) below the system into chart.

The Method

1. MOVING AVERAGES
We will use two moving averages cross to identify a trend. In our method we will use the crossover of 5 Weighted (WMA) and 10 Simple (SMA) moving averages. Objective of these is to catch a trend or trend change.

2. PARABOLIC SAR
We will use SAR for our entries and exits. We will use SAR to catch early change in trend and place our stop to exit the market, we can also use it to re-enter if it was a brief exit from main trend. Also for confirmation of trend with Moving Averages Cross.

3. DIRECTIONAL MOVEMENT INDEX
We will use the DI+ and DI- to identify a trend and confirm it.

4. Timeframe and Currency
EURUSD and GBPUSD should be suitable for testing. Timeframe is 15Minute.

Entries

>>ENTER LONG IF<<
A buy signal is generated from 5 WMA and 10 SMA (5 WMA crosses 10 SMA to the upside)
SAR below candles
ADX DI+ positive > (greater than) DI- negative (BLUE above RED)

>>ENTER SHORT IF<<
A sell signal is generated from 5 WMA and 10 SMA (5 WMA crosses 10 SMA to the downside)
SAR above candles
ADX DI- negative > (greater than) DI+ positive (RED above BLUE)

Exits and Stop
A conflicting Parabolic SAR signal in opposite direction is major signal of pause or reverse in trend (EXIT). Re enter if SAR signalled again in the older direction of the trend after minor pause. Profit and Stop are discretion for you.

Secondary reversal signal, a conflicting signal from Moving Averages, or a change in Direction Movement Index trend (DI+ and DI- crossing in opposite direction)

Good luck!
Remember to check picture (VT)

vt_nice.gif840Ă—642 25 KB

2 Likes
2

update:

SAR has been showing DT for a while, although prices moving very much in rangebound, not dropping actually. It’s a small retracement.

MA’s are squeezing together with no clear breakout.

ADX still shows UT
RSI still shows UT

overall, neutral price action into the close. No clear signal.

3

Sure, why not try it, what timeframe chart do you use for this method? It is simple, and i like simplisity, pritty much the simpliest things are more usefull than the ones that are hard to understand and are complicated!
One more thing, Nver heard of ADX indicator, do you know if it`s in MT4 by default?

4

I am sorry having missed the most important point. Its 15M timeframe

ADX, is in metatrader by default. Average Directional Movement Index.
and it’s a trend identifier.

update:

Funny thing is, price has been dropping now with SAR and MA only in agreement, ADX and RSI still up. we will continue on this to see price reaction to each indicator.

gbp_1.gif701Ă—512 27 KB

5

I will try to monitor all signals.

Demo trade #1

Long 1.95838

In order that we prevent a winning trade to turn into losing, we can use the help of :

  • more than 1 lot
  • trailing stop
  • not excessive profit projection

but exit can be due to:

  • stop reached
  • stoploss reached (undecided yet… ??)
  • an opposite signal
6

Nice softwear you useing…care to share what is it called?

7

yup…same here!:slight_smile:

8

It’s a Java based application from Oanda FX game (for demo play).
Very recommended.

What do you think about lots, trailing stops, stoplosses, profit level? We still need a lot of development.

I think stoploss can be when an opposite signal reached (for agressive style) but that will take 4 indicators to reverse. and that takes time and takes a big loss.

The problem is that one of two indicators can go opposite for a while and turn back.

Another problem, putting a tight stoploss… we can stop out the trade, and then it moves in our favour.

I will try to find the best combination by demo testing these trades for some time at least.

9

[/QUOTE][QUOTE=topchess;954]It’s a Java based application from Oanda FX game (for demo play).
Very recommended.

What do you think about lots, trailing stops, stoplosses, profit level? We still need a lot of development.

I think stoploss can be when an opposite signal reached (for agressive style) but that will take 4 indicators to reverse. and that takes time and takes a big loss.

The problem is that one of two indicators can go opposite for a while and turn back.

Another problem, putting a tight stoploss… we can stop out the trade, and then it moves in our favour.

I will try to find the best combination by demo testing these trades for some time at least.

As i explained in my tread(about BP method)Im more of a passive trader, i limit profit along with loss manualy, without even waching the chart, so based on that i put 30-40 stoploss and 10-15 take profit! Im not an agressive trader,

I think stoploss can be when an opposite signal reached (for agressive style) but that will take 4 indicators to reverse. and that takes time and takes a big loss.
And thats exactly why i aint an agressive one!

10

I closed demo trade at 20.7 pips for the experiment.

This might be wrong decision why? It can go in my favour more. but until we find a strategy to protect max pips and give away minimum loss, we should be happy with 20 pips for a trade. (some trends last until 100 pips)

11

Let us redraw this all over.

Our goal is to protect profit and do not let losses run.

We will test the following model from now on.

Entries: when the four indicators line up in one direction on the basis of candle close (usually SAR will signal first, then MAs, adx, rsi)

Take profit: 10 pips trailing stop.

Stop loss: when SAR give an opposite signal. This, to limit losses, and allow us to re-enter later if it turned back. (we won’t depend on RSI cause sometimes it bounces a lot around 50 area)

I know this model, we can get many whipsaws in a non trending market, but I have to test it for a week at least on all conditions with same rules, and following every signal to know the net P/L.

12

The one that was opened yesterday closed +13p.
I`ll try to trade more agressively today!I fhtere will be a trend!:slight_smile:

13

I wnet against a riseing trend(all 4 indicators showd an uptrend) on the NEw York open, e/u +24 g/u +36

14

This works good in a trending market, so we can’t fool ourselves, and should keep testing in a non trending mode. to know what losses we get, and if winners cover losses. I think about eliminatnig the RSI because it bounces so many times around the 50 area causing undecision to trade.

The goal also is to make it more simple, as possible.

15

[QUOTE=topchess;967]This works good in a trending market, so we can’t fool ourselves, and should keep testing in a non trending mode.QUOTE]

What`s your idea of a “trending market” i ask this questions lots of people, evryone hase theyr own ode of a trending market? How do you consider a market that trends?

16

I use Trending market to refer to strong movement in one direction (uptrending or downtrending) and to know how much market is trending, use your ADX. If the value of ADX line not (DI+, DI-) is lower than 20, this is a non-trending market. If the value is higher than 40, this is a strong trend occuring.

Non-trending market (sideways) also named rangebound. The price tends to move within thin channels for long periods of time without breaking either side.

17

Just what i wanted to hear!:):smiley:

18

Like the great Einstein said, “Make everything as [B]simple[/B] as possible, but not simpler.”

You should have a separate system or “plan” to trade ranging versus trending market. One will work like make money hand over fist, while the other will lose money and your face will want to hit your fist.

The easy part is creating a system for a trending market and another system for a ranging market. The hard part or billion dollar question is knowing when to use which at the appropriate time. :smiley:

19

GO TO:

VTSystems.com

Open a demo account and download:

VTTrader

This trading software allows you to try out example trading systems (with buy/sell indicators), build and trial your own systems and even get into the software to develop your own indicators, or modify the existing ones.

In addition to this, you can demo trade your inventions.

Have fun!

20

It’s a very hard question indeed. but I can just consider that market is trending much more than ranging and have a money management plan that keeps winners over losers. :slight_smile: