Hi Any,

That's right, the market, until today, was only ranging so the signals earlier this week were not so good. I missed today's signals so my weekly report is hardly worth making but I'll post it over the weekend anyway.
A lot of monitoring is required to optimise the system.
I am considering monitoring another one or two pairs in addition to EURUSD.

Hi Michael - I take the opportunity here to say that your programme is working well, many thanks.

Regards,
aquiagora

Hi aquiagora

Thanks for the feedback. I've been distracted working on the support resistance crossing indicator but still intend to return to this and do a few things. One of them was to add RSI 'bandwidth' such that instead of a signal being generated when RSI above/below 50 if bandwidth was set to 20 the the signal would be generated when RSI below 70 or above 30. At the end of the day all this would do would be to turn some of the grey arrows red or blue as appropriate. Do you think there is any value in this?
I'd be interested in any other changes you think might be useful.

All the best

Michael

Hi Michael - my initial reaction is to say no, I do not think there is any value in adding the RSI "bandwidth". Having said that there could be times where the price action, especially with regard to the faster bigger moves, would be such that it would reduce the delay in triggering the arrows and give much better entry levels.

From what I am seeing, this system has a mechanical:discretionary ratio of about 60:40, not to mention round the clock monitoring.
As the guidelines say in Any's first post "4) buy/ sell signals given by candlesticks - Bullish/Bearish Engulfing Pattern, Hammer, Inverted Hammer" and in a later post"You can`t use this system if market is flat."

As I mentioned to Any my report for this week is hardly worth posting as I missed so many trades but I shall post it as a matter of routine.

I did another backtest, which is maybe more academic than realistic because you would have to be an insomniac to be able to catch all the signals. Risk/momey management would also be a consideration.
The backtest at least shows that if I could overcome my difficulty of tight stop losses and even trading in a ranging (flat?) market, once the big move comes you could have bagged a lot of pips either way. I'll attach the backtest with the front test report.

Regards,
aquiagora

Hi All,

Not worth much this week but as a matter of routine, here is last week's front test report, result: minus 45 pips.

I did a back test, with wider stop losses, just to see how the system would have worked.
It seems though that had there been a big move up a loss would have been made.
This back test is maybe more of an academic exercise than being realistic.
There are two worksheets, one for the actual big move down on Friday and the other for a hypothetical big move up, both based on the same buy/sell trades and stop losses. The result is for the big move down +595 pips and for the big move up -370 pips.

Until next week,
regards,
aquiagora

Hi All,

FWIW I just want to say that I am not going to submit any more reports. I have not been able to fully front test this system.
I shall continue now with more pairs but as my trades are random because I miss many signals there is no way over the short term that I can properly evaluate the system. It is going to be a long drawn out process.
Ironically most of the signals I miss are the ones that show this system's worth.

If anyone else out there has been trading with this system it would be good to learn of their experience.

Regards,
aquiagora

I've also been unable to sensibly test this as I have not been able to spend the time looking at credible ways to filter out some of the false breaks. I still think there is great value in this or something similar but it will take time to fully assess and decide how best to use it.

Michael

Hello Michael and aquiagora,
have you looked to see how this system performs using H4 closing candles?
Maybe you'd get less false signals with the higher timeframe and would not have to spend so much time monitoring?

Keith

Hi Michael and Keith,

Thanks for the feedback. For sure it's going to take time (not to mention stamina and the tuition fee) to fully assess and decide best how to use it.
I have had a look at the lower and 4 hour timeframes and on all of them there are good signals, the difficulty is to filter out the false signals.
I think this is where the discretionary part comes in. As the guidelines say - don't trade when the market is flat and use the candlesticks. The thing is to know when the flat trading stops so that you can take the last signal to catch the big move out.
When the signal comes after a big candle I don't take it - if you are monitoring the platform then you can enter on a pullback. This is when the mechanical part is secondary and experience matters more.

I just suppose that the guys who are getting 85% success with the system have done enough research to conclude that the 1 hour timeframe is the most reliable.

I have been using tight stops so my last seven trades have been negative except for one at break even, total minus 105 pips. All trades on the 1 hour timeframe.
If these last trades had had bigger stops my loss would have been far higher. I use the tight stops to make sure that if I don't get in on a move that starts and keeps on moving in the favoured direction I am stopped out quickly.

As you can see to cover the last seven I need to catch a run of well over 100 pips.
The frustrating thing is over the same period I have missed signals which would have reduced the loss or even brought me ahead.

That's it so far, all the best, have a good time over the festive season and a Happy and Prosperous New Year!
aquiagora

Hi All,

No trading today and the saga of missing good trades continues. This evening I have just checked out a few pairs and see that the following offered good, low risk opportunities (in hindsight of course) at what for me would have been a sensible time of the day.

By low risk I mean that there was no pullback beyond the signal candlestick.
Sell trades on:
USDCAD on the 13:00 hour candle
EURCHF on the 10:00 hour candle
EURCAD on the 14:00 hour candle
Buy trade on:
GBPJPY on the 09:00 candle

Times are CET.

Let's see how they go next year,
all the best,
aquiagora

Hi,

I have found a system which uses 5 EMA, 13 EMA and 62 EMA (without RSI). Maybe it would be possible to optimize these two systems by making one.

When the 5 crosses below the 13, and both of them cross below the
62, it’s possibly a good sell signal.

When the 5 crosses above the 13, and both cross above the 62, it’s a buy signal.
Moving averages

The next part of the system is to watch for the 13 to cross the 62. Whether above or below (long or short
positions), you’re in good territory. After this crossover occurs price often returns to hit the 62 EMA again – and
this is an excellent time to sell the pair all over again. This means that if you miss the original trade, it’s totally
acceptable to enter the trade when the pair rises up and hits the 62.


1. Set a stop-loss at 20 pips beyond the 62 EMA.
2. Trail the trade by 20 pips (using a trailing stop loss), or:
3. Set a profit target at a recent high or low (something that
creates a double top or double bottom).

Any,

Try this one. It works similar to these EMA systems you have been talking about but I think it is easier to read. Put a 21 EMA and a 20 SMA or your Bollinger Middle Band on you chart. When the candle breaks and closes above the 21 EMA and the 20 SMA is below the 21 EMA go long. When it is opposite go short. Don't trade when it is flat or the candles are breaking the EMA on every candle in opposite directions. The next filter is the RSI, it must be above 50 to go long and below 50 to go short. The million dollar question is which RSI. I like using 9, it works well on the 4 hour chart but you will get more false signals on the 1 HR chart. 14 will filter a bit better than the 9 but you will also miss some trades. I have never used the 21 RSI but after reading this thread I began to play with it. On this method I am talking about you will miss many trades but it looks like if it is above/below 50 for the proper trade it is almost a can't miss. Amost looks like when price breaks above the 21 EMA and 21RSI is above 50 you could go long regaurdless where the othe moving average is.
The last thing you can put on your chart is the 55 EMA. It can act as a target or a reason to stay out. Say price goes above the 21 EMA and it is above the 20 MA but it closes right at the 55 EMA. You may want to think twice before you take the trade. Also if price breaks above the 21 EMA and it is above the 20 MA and it is also above the 55 EMA this is an ideal long trade set up. Ideal short set up when it is opposite. Let me know what you think.

Bill

Hi Bill,

I will try it

Hello Dear All,
I hope you Guys don't mind sticking my nose in here.
I trace MA threads with some interest as this kind of indicators are telling something about the trend and it's better to have a trend as a friend. They are lagging but are very useful in trend description and follow up.
I had a chance to speak with one of my distant friends (unfortunatley not a close one who could divulge his professionals tools).
He is a full time technical trader in one of the London's banks.
He says MA are used to follow the trend and to his opinion 21 EMA, 50 EMA and 200EMA are the most commonly used ones Lots of elements of strategy depends on the time frame you are using. Longer time frames like 4hrs and daily are recommended for traders as you can have a lot of time to respond to price action behaviour. He says in a strong trend price usually stops (on retracements) at 21 EMA but it offers a little support/resistance in a longer time setups. 50EMA is a little bit more stronger to place S/L levels, it's like a base S/L. If one wants to keep the trade even longer and have a "safe" stop loss he says 200 MA is main trend indicator but then again for 4hrs time frame is very large one. All depends on the time frame, and if you you use 200 EMA as your S/L level you have to go and trade below 1 hr (not recommended for newbies like I'm) cause it requires a very wide stop loss.
Maybe he wanted to say something but at the same time didn't want to divulge too much ???
Anyway is hard to say which period MA carries more relevance. I wonder what would be your opinions.

Sounds a lot like my strategy except I use 55 EMA, not much different than 50 EMA. I'm not sure about 200 EMA. Are you sure he did not mean 200 Simple Moving Average. I have 200 SMA on my charts. Excellent warning sign, SL as you say, or also a profit target on 1HR and 4HR charts. You can also use a 500 SMA just like the 200 SMA on 1 HR and 4 HR charts, excellent final target on a runner.

Hi Chillydog,
Looks like it sounds very similar to yours I have read about. I know that you are waiting for the 4HRS candle to close above 21 EMA and also checking RSI >50, Stochastic must be going up and MACD must be aligned for a long trade(opposite for short), would that be correct ?
Of course if you don't want to divulge the details I stop harassing you
I've just gone through some of your post and did backtesting and the system of yours has a very high potential. Just wondering about few things like Stochastic for example.If for example you go long, do you treat overbought stochastic as a signal not to enter ? Hope you don't mind my questions.
As far as the MA used by this fellow he is using 21, 50 and 200 - all are EMA (expotential moving averages). He is using typical price as a reference. Typical price = Previous candle: high+low+close price divided by 3 (HLC/3) I'm not sure why this particular but according to him it takes into account all previous price action. Also he uses support and resistance breakouts to enter the trade.Of course he probably has some other tools in his box but is quite reluctant to go into details -and is hard to blame him if he developed it.

Wish You all here the best in the New Year, let Your dreams become true and all the best for Your relatives.
Happy New Year to everybody here, lets enter the new year with new plans, dreams and hopes, let it be the most profitable year in all.
Special wishes to our teacher and mentor, Vahid you are doing execptional job here helping us to understand the markets and your commitment is unique. Let it be the best year for You in all possible aspects.
Cheers !

Yes you are correct in your assumptions on my trading. I don't use the stochastic as an overbought or oversold as the stochastic can ride those areas for a long time. The RSI is different, it is more reliable for overbought or oversold. I also like divergence or convergence on the MACD or any of the indicators for that matter. To be honest I probably could take the stochastic off my charts and still trade just as well. I think it is because when I first started to learn trading I liked the stochastic and it is hard to get rid of an old friend. I too use the trendlines for support and resistance breakouts as Vahid has been teaching us.

The new system he taught us last night with the range breakout and the Fibonacci I like a lot. In fact I used it already last night on 15 min chart GBP/USD and it hit the first 2 targets and that is all I was shooting for. I can't wait what other goodies he has up his sleeve. Take much more stock in Vahid's methods then mine. Most of my knowledge has come from him anyway. Good Luck!

Thank you very much for your reply.
I can't agree more on the new Vahid's videos - they are just loaded with experience and knowledge. I'm still trying to figure out how to manage this breakouts - when to entry and exit. I presume I may be slow learner and I'm not having a good feel for the market actions so still needs to recognize price patterns and S/R lines. Therefore need more guidance and explanation.
You must have some experience to handle 15mins charts on your own so it perhaps easier.
I also can't wait more videos from Vahid and have a really good feel about 2010
I have never learn more about markets than here with Vahid's teaching and posted my testimonial as recently seems to be a problem with those new signal addicts

All the best Chillydog and talk to you in New Year

Hi All,

There were some good mainly buy signals given by this system this morning before/after the open of the European session, times are CET:

EURUSD buy at close of 09:00 candle
AUDUSD buy at close of 07:00 candle
USDCHF sell at close of 10:00 candle
NZDUSD buy at close of 09:00 candle
EURJPY buy at close of 09:00 candle
AUDJPY buy at close of 07:00 candle

I was already in the EURUSD trade before the 09:00 candle closed.
I did not go for the AUDUSD as I already had the pending order placed.
I took the AUDJPY at 83.64, s/l presently at 84.14 and price at 84.42 - this is the first front test for this week.

There was a false sell signal immediately followed by a good buy signal on EURGBP.
Let's see how the rest of the week goes.

Regards,
aquiagora

Hi All,

The saga (front testing) of this system continues and after half a dozen trades this past week, no pain no gain.
As I've mentioned before this system requires much monitoring and discretion in order to give it a good test.
If you catch a signal before the price runs rapidly and a good distance from your entry point then good gains can be made but even then I think you still need to monitor the trade to move the S/L or set a T/S in order to protect any gains.
Obviously these kind of trades are only known in hindsight.
No need to say that I missed some good trades, again (and also many false signals).

FWIW I attach the test report.
Regards,
aquiagora

Hi All,

Hah! - For the last three months I have been unable to make the opportunity to continue with the front testing. I have made a few random trades between times but all in all there are too many false signals and to try and catch the good signals on more than one pair requires too much monitoring.

My initial enthusiasm for this system has been tempered. I had thought that it could be used to supplement the FLMA trade setups in addition to using it on its own but I believe it is not really practical and so I am abandoning this project.

Although there have been no other posts about this topic since my last post, FWIW I just wanted to record my last thoughts on it.

That's it for now,
regards,
aquiagora