My holy grail is to net 20 pips (or some other equivalent on a different pair to make $20) a week. In doing this, I'll turn into a $1000 account into over $100k in about a year. So long as I average at least 7 steps forward for every 1 step backwards, I must succeed. The challenging part is settling for and being consistent with only 20 pips.
I use this system because it gives a lot of 20pip motions, but you can use any system that will consistently net $20 a week on one contract.
Would be quite interested to check this out in MT4. Does anybody know how to do a MA envelope in MT4? Additionally, is DMI called something else...I do not find that indior. Perhaps there is somewhere to download it from...Originally Posted by ;
ATrainer,
Thank you for sharing your set-up.
One addition you may consider for validating your cause is the 20 period SMA. It is a really good indior of current trend. If current slope of 20 SMA is positive and price is above it, we're in an up trend. The reverse holds true for a down trend.
Allow me to know what you believe.
I think this is the idea in MT4
30 min chart
envelope 10 exponential close 0.04percent
ADX 10 close
http://imageshack.us
This seems right.
Mj_bolt, you may use a 20 period MA envelope rather than a 10 if you prefer the 20 as a sensitive MA.
What type of account risk are you considering using to put $1000 at $100,000 netting 20 pips a week???
Just curious.
This isn't for the novice trader, and also you need to make the weekly internet MOST of the time. I trade 1 contract for each $140 from the account. $40 of that is risk capitol to create the $20 internet every week. Obviously, do not risk all 40 to create 20 on a single trade. The trick is awaiting the great installation which has a high likelihood of success. You do not trade to trade, you trade when the odds is the greatest. Twenty pips per week shouldn't be that difficult when you take a look in a daily trading range of over 100, and a mean of 10 or more pips on a 30 second bar. But can you await the best trades, and then be pleased with only 20?
One thing you have to realize about how I tackle trading currencies, and futures for that matter, is totally different from the way I trade stocks. The mindset from the Forex is to make a lot of pips. When you see a system advertized in an add, they promote the fact they created XXXX number of pips at X quantity of time. To me, that is not what'll impress me. I can not see trading to create 300-400 pips in one trade.
Instead, I seem to compound the amount of contracts I can exchange. I am able to make money much quicker by consistently making little insignificant profits and raising contract amount than I can by making trades that require longer, and are more difficult to loe and capture. Call it marketing paradise.
In posting this system, I would like to expand how you might utilize some shared tools, and change how you examine them. I've noticed that moving average crossovers are a common foundation for many of the systems people use. The system I designed is such a method, but with a different slant.
I've day-traded Tbond futures together with the Market Profile in the past, a system that trades around the normal deviations. I saw the advantage and reality of the system. In developing this method, I sought to keep a few of the principles. Bollinger bands are a commonly used tool, but largely inform you when you have attained extreme boundaries. I wanted to see more of when I began to move toward intense motion; searching for a breakout.
That brings me back to the MA crossover. Generally, the inherent problems with MA crossovers are that they lag, and therefore are subject to false signs. The entire point of a system will be to generate an action signal, and filter as many false signs as you can produce a good profit expectancy.
To cure the lag, I utilize price plotted with a line as my quick MA, which provides me a 1 time moving average. No lag. You'd think that a 1 time MA would be very erratic, but it isn't. It really does nicely to filter sound. But can we now have a slow MA that isn't only getting whipsawed? Here's the fix for it. Instead of a slow MA, I utilize an MA envelope. Normally, an envelop can be used like a Bollinger, to create a station. Rather I use it as a thick MA that serves to filter many of the false crosses. However thick to make it to balance prompt entry on new motions versus getting whipsawed.
To find the answer, I seemed to normal deviation. I've discovered that a.5 standard deviation works well, but lacking backtesting ability currently, I can't optimize. I use the.5 standard version. I really could use a bollinger place to.5 standard deviation, but the bollinger acts reverse of what I want to accomplish. On breakouts, it hastens, making less room in the outer portion of breakouts. In consolidation, it squeezes overly tight and produces a lot of whipsaws, and too narrow to be a symbol of a good breakout. This is where the MA envelope functions amazing. The MA envelope is not supposed to change in diameter, but it does. In times of consolidation, it retains its appropriate width. When a breakout occurs with a solid move, It really constricts, giving the breakout more room to stay beyond the envelope.
In translating the.5 bollinger to an MA envelop, I put both on a chart. All you have to determine is the MA periods to base the envelop on, which can be simple. Just find the MA that functions best as a support and resistance for the pair and timeframe you're trading, and be sure that the envelope bar interval. Then, examine the width of the.5 bollinger in major pivot points. That is where you want to dial up in the MA envelope. When the widths in the pivots are exactly the same width, you have your envelop shift setting, also you are able to delete the bollinger.
This may not filter all false signs, therefore we are in need of an oscillator. I've discovered that the DMI works very well. I only use the D and D- crossovers. An MA envelope cross supported by simultaneous D/D- cross is the maximum probability signal. I don't utilize the ADX line at all.
A re-entry into the envelope followed with a new brand breakout with the Dor D- nevertheless above another is a continuation sign and may be an entry, but has a lower probability. This sort of entry functions nicely when you draw a trendline on one of the D lines on the DMI to indie an exit based on the DMI trend break. Trendlines on the DMI work nicely for premature exits near bottoms or tops.
When I get a signal, but the speedy MA (price) closes back in the envelope and can be supported by means of a recross of those DMIwithin two bar periods, I've it a false signal. A verified sign in the opposite direction can be obviously an exit.
For a system, it works rather well, and permits you to ride many of the excellent moves. I exchange it with a massive amount of discretion, however. Support and resistance breakouts or trend changes or price pattern breakouts, like flags or triangles result in premium buy or sell signals.
I mostly use this program to snag 20 pip gains in the EUR/USD pair. On a 30 minute chart, it gives me many opportunities. The settings I use with this chart are a 10 interval MA envelope set to some .04 change, and a DMI place to 10 bar spans. A 20 interval MA envelope functions as a conservative element.
I've a very aggressive money management system that benefits greatly from 20 pip gains, so that was the impotus for the machine, but as a standalone, the system functions well. It works rather nicely in equity trading too.
For the ones that have backtesting capacity, I'd very welcome comments on how it tests out as a pure egy. As the foundation for a discretionary method, it works nicely for me.
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