50 SMA From H
When referring to the bars do you mean the Histograms in the MACD or the Candles?
Thanks ED
Thanks ED
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Replies to This Discussion
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Permalink Reply by Mister H on
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Well, either way, I'm not sure what the difference would be? You get a price break of the SMA, check to see if the MACD had a cross within the last 5 timeframes (bars, candles, etc).....if so, you enter and use the high of the last five timeframes (bars, candles, etc.) as your stop. (Use the low if you're going long of course.) If the MACD has not crossed w/in the previous 5 timeframes, you wait until it does......
Hope this answers your question Ed. Thanks for asking!
It's good to know that somebody it reading these posts besides me!
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Permalink Reply by ED on
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Mister H: Ed asking questions again. I'm having just a little problem understanding or seeing what the strategy is. Maybe I'm trying to make too much of it, but just not sure when the entry is correct?
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Hmmm. It's really pretty simple. It's a trend trading stratgy....swing to position style. The only things you'll need are the 50sma, 100sma, and MACD. That's it. Find a pair that's trending on one of the larger timeframes (I've been using 90min, 240min and the Daily charts). Let's say you're using the 240. Pull up a 240 min chart and add the 50sma, 100sma, and macd. Determine the trend. Many pairs have been trending lower lately.......you can tell that just by looking at the chart. So, as long as you still have the 100sma above the 50sma you'll be okay to go short. Now for the entry. Wait for the pair to trade above the 50sma on the 240 min chart. Now keep watching and waiting. When it breaks back below the 50sma (back in the direction of the downtrend), now look to your MACD for confirmaiton. Was there a fress cross on the MACD within the last five timeframes? If yes, go short and use the high of the previous 5 timeframes as your stop. If the cross on the MACD is old or hasn't crossed yet, you have to pass on the entry and wait for a fresh cross on the MACD for confirmation to get in. Keep watching. As long as the pair is still below the 50 sma once the MACD "re-cycles" and gives you a fress signal, you're good to go. Enter at the current market prices on a fresh cross of the MACD....again using the high of the previous 5 timeframes as your stop.
Hope this helps Ed. If you still dont 'get it', please let me know and I'll try to come up with another way to explain it to you!
ED said:Mister H: Ed asking questions again. I'm having just a little problem understanding or seeing what the strategy is. Maybe I'm trying to make too much of it, but just not sure when the entry is correct?
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When you refer to the cross on the MACD do you mean the moving averages crossing the centerline?
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RE: cross on the MACD.........Use standard MACD settings (12, 26, 9). Don't worry about the 'centerline'. Simply look for a fresh cross of the 'MACD line' (usually the blue) with the 'signal smoothing line' (typically red).
Here's an example of a short entry I took on the GBP/JPY on the 90 min chart on Oct 5th at 19:30 EST. Entered at 184.70. Stop was 188.34. Took partial profits at 181.06 on Oct 6th. Stopped out on remainder of position at 173.00 on Oct. 12th....when the 90 minute chart closed above it's 50 SMA. Profit was nice.
Still watching and waiting for another re-entry to the short side. The price has closed below the 50 SMA several times since then, however none had sufficient confirmation from the MACD.
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Thank you Mister H the example you used cleared up all of my questions. Nice profit! Well done. I'm very excited about this. Thanks again. Ed
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Eur/Usd is setting up for a short, but the support is very strong. Do you take this into consideration, or do you just continue if the MACD shows a fresh cross? (90 minute light)
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I do not worry about this....no. The trend is still to the downside. I trade with the trend. Remember however, that the strategy is not foolproof by any means. You will have losing trades. Sometimes several in a row. The main thing is that over time, the magnitude of your winners will take care of your losers.
Papertrade.
I've been using a 240 minute chart too. (Currently using 240, and Day chart entries because I don't like having to look at the charts every hour and a half).
Also, this strategy lends itself to utilizing the 'Alarms' feature of the software as well.
ED said:Eur/Usd is setting up for a short, but the support is very strong. Do you take this into consideration, or do you just continue if the MACD shows a fresh cross? (90 minute light)
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I was concerned about the Support so I waited until the pair went thru the E/U to 1.3386. Put in market order there and took profit at 1.3343 and letting the last mini-lot run. Up at this point $43.00. Not alot but happy with the outcome. Thanks again. Ed
I will use the alarms.
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I would suggest that you papertrade this for awhile until you get things ironed out like clockwork. It wouldn't matter if you added a simple rule or two of your own, but you would need to adhere to them every single time. Consistency is the key. When trend trading, if you don't let your winners run, you'll never be able to pay for the losers. Follow the rules. They are there for a reason. And they are simple beacuse that helps it to be easier to be disciplined. Personally, I only look at the trades at the end of the time period (once the candle has closed).
Remember, this is a longer term strategy.......think days to weeks. Stops will be further away, but profits will be greater as well. Apply you money management techniques accordingly.
ED said:I was concerned about the Support so I waited until the pair went thru the E/U to 1.3386. Put in market order there and took profit at 1.3343 and letting the last mini-lot run. Up at this point $43.00. Not alot but happy with the outcome. Thanks again. Ed
I will use the alarms.
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