tradebyday
Active member
To start off I would like to extend a thank you to the community in what they have accomplished and with what they assisted me in accomplishing. Scrolling through several different threads I picked up several indicators I thought had promise and were working rather well together. I then found an indicator posted by @mc01439 and it brought everything together. The title merely shows what I have tested this strategy to be genuinely effective on, it may work on even more asset classes if you play with it a bit. My grid will be linked below with each indicator located in it set at the settings I use. If not the, case please @ me so i can fix that.
Now for the elements and rules of the strategy(these are a bit flexible as there is always room for improvement and you may have a different trading style to apply):
1. The 34 adaptiveEMA and 50EMA are treated similar to that of the ichimoku cloud (if someone wants to make it an actual cloud that would be cool to share). Trading under the cloud only shorts, trading above the cloud only longs, and trading inside the cloud is allowed either direction at user's own risk.
2. VWAP is a wonderful tool for trend identification. If VWAP is trending down, shorts only. If trending up, long only. I do trade shorts and longs on either side of the VWAP when it flattens as I find reversals back to VWAP to be lucrative, but I use the cloud to dictate if the reversal is worth it.
3. Now the oscillator 2 line cross and the blue/magenta arrows generally signal on the same candle, if not, I allow the one or the other to catch-up, UNLESS the signal is in the direction of which the Ergodic is trending(long signal while ergodic is green for example), then I enter immediately. The Ergodic does not have to be trending in the same direction when the other 2 signals are heading as it is a lagging indicator still.
4. *IF THE ARROWS SIGNAL ON A CANDLE THAT IS ALREADY HEADING IN THE SAME DIRECTION (ie, magenta short arrow signals on big red candle) I allow for a retracement of the next candle setting limit order for the open price of the signal candle, if not hit I enter at the close of that second candle. This is important due to the high volatility in price at this current time and helps eliminate big drawdowns while in the trade. On very tight ranged candles or maybe a candle that forms a hammer or doji, you can enter on that signal candle. You can trade or add on to trades when the bars paint, but I do not do this.
5. I do not have a solidified strategy for exits in place yet, but you'll notice the strategy has some very decent runners, and my goal is to capture all of the large moves as often as I can. So I am testing a SL set at 1.5* ATR from entry (generally exit before that if I get an opposite signal on a closed candle but the price has been rather erratic the past 2 weeks so it pays to have a SL just in case you're caught off guard), TP initially set at 2-3*ATR but more focused on price levels I have dictated on my chart already for S&R levels, sometimes playing multiple trades in the same move as I secure profits from level to level. Not exactly the most efficient way to capture the large moves, but I want to be transparent that I have not fully mastered this stuff. I still take profits too early at times. For those that can let them ride, you'll see some nice paydays. Any changes or patterns you notice in regards to improving either SL or exit strategy, please share and make us all better traders.
6. The time frames I trade are where the consistency comes in for the signaling. For /ES I use the 10,000 tick chart while volatility is high and price action is creating massive trends, it helps eliminate most noise. When things slow down to something similar as last year's summer, you could probably just use the 4,000 tick chart. This strategy looks very good on a 5min chart as well though, for those not liking the tick charts in here. For /GC I use the 1,000 tick chart, and the oscillator has been especially good with gold for me in the past, the signal arrows and the accompanied rules helps strengthen the reduction of losing trades.
7. For FX I have only tested this strategy with the 10,000 tick chart and it works really well, though that being said, would be difficult to trade. Maybe someone here can modify the base of this strategy to better reflect the 4hr or daily TF for more people to trade FX alongside their other ventures? I am going to continue my experimenting with lower TF like the hourly or smaller tick values in order to capture some pips early.
8. As far as any other assets like stocks, oil, etc.. I have not begun that testing so have at it! If you find something useful or interesting I encourage you all to share!
Ask if you have any questions, but study the charts and fiddle with what is there for the weekend before you do
https://tos.mx/9pv9Yv9
Now for the elements and rules of the strategy(these are a bit flexible as there is always room for improvement and you may have a different trading style to apply):
1. The 34 adaptiveEMA and 50EMA are treated similar to that of the ichimoku cloud (if someone wants to make it an actual cloud that would be cool to share). Trading under the cloud only shorts, trading above the cloud only longs, and trading inside the cloud is allowed either direction at user's own risk.
2. VWAP is a wonderful tool for trend identification. If VWAP is trending down, shorts only. If trending up, long only. I do trade shorts and longs on either side of the VWAP when it flattens as I find reversals back to VWAP to be lucrative, but I use the cloud to dictate if the reversal is worth it.
3. Now the oscillator 2 line cross and the blue/magenta arrows generally signal on the same candle, if not, I allow the one or the other to catch-up, UNLESS the signal is in the direction of which the Ergodic is trending(long signal while ergodic is green for example), then I enter immediately. The Ergodic does not have to be trending in the same direction when the other 2 signals are heading as it is a lagging indicator still.
4. *IF THE ARROWS SIGNAL ON A CANDLE THAT IS ALREADY HEADING IN THE SAME DIRECTION (ie, magenta short arrow signals on big red candle) I allow for a retracement of the next candle setting limit order for the open price of the signal candle, if not hit I enter at the close of that second candle. This is important due to the high volatility in price at this current time and helps eliminate big drawdowns while in the trade. On very tight ranged candles or maybe a candle that forms a hammer or doji, you can enter on that signal candle. You can trade or add on to trades when the bars paint, but I do not do this.
5. I do not have a solidified strategy for exits in place yet, but you'll notice the strategy has some very decent runners, and my goal is to capture all of the large moves as often as I can. So I am testing a SL set at 1.5* ATR from entry (generally exit before that if I get an opposite signal on a closed candle but the price has been rather erratic the past 2 weeks so it pays to have a SL just in case you're caught off guard), TP initially set at 2-3*ATR but more focused on price levels I have dictated on my chart already for S&R levels, sometimes playing multiple trades in the same move as I secure profits from level to level. Not exactly the most efficient way to capture the large moves, but I want to be transparent that I have not fully mastered this stuff. I still take profits too early at times. For those that can let them ride, you'll see some nice paydays. Any changes or patterns you notice in regards to improving either SL or exit strategy, please share and make us all better traders.
6. The time frames I trade are where the consistency comes in for the signaling. For /ES I use the 10,000 tick chart while volatility is high and price action is creating massive trends, it helps eliminate most noise. When things slow down to something similar as last year's summer, you could probably just use the 4,000 tick chart. This strategy looks very good on a 5min chart as well though, for those not liking the tick charts in here. For /GC I use the 1,000 tick chart, and the oscillator has been especially good with gold for me in the past, the signal arrows and the accompanied rules helps strengthen the reduction of losing trades.
7. For FX I have only tested this strategy with the 10,000 tick chart and it works really well, though that being said, would be difficult to trade. Maybe someone here can modify the base of this strategy to better reflect the 4hr or daily TF for more people to trade FX alongside their other ventures? I am going to continue my experimenting with lower TF like the hourly or smaller tick values in order to capture some pips early.
8. As far as any other assets like stocks, oil, etc.. I have not begun that testing so have at it! If you find something useful or interesting I encourage you all to share!
Ask if you have any questions, but study the charts and fiddle with what is there for the weekend before you do
https://tos.mx/9pv9Yv9