2 Charts 3 Indicators

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2 Charts 3 Indicators

Postby Pendolan » Wed Mar 31, 2010 10:30 am

The Setup

Chart - 4 Hour; 1 Hour
Currency – Any

Exponential Moving Average (EMA) – 3 on Close (YELLOW)
Exponential Moving Average (EMA) – 5 on Close (BLUE)
Exponential Moving Average (EMA) – 12 on Close (RED)

Moving Average Convergence/Divergence (MACD) – 12, 26, 9 (default)
Stochastic Indicator – 5, 5, 3

BUY Conditions

4 Hour Chart

The 4 hour chart will give you the trend direction to enter. The conditions are as follows:

3 EMA crosses over 5 EMA (either down or up)
Body of the Candle closes and is below/above the 12 EMA
Stochastic is moving in the direction of the trend (either up or down)
MACD has crossed or is indicating a strong change in direction.

The key to the 4 Hour chart is it will give you the general trend direction of the currency which indicates either a buy or sell opportunity for it.

1 Hour Chart

3 EMA crosses over 5 EMA (either down or Up)
Body of the Candle closes and is below/above the 12 EMA
Stochastic is moving in the direction of the trend (either up or down)
MACD has crossed in the direction of the 4 hour trend

How it Works

1. Looking at the 4 Hour Chart all indicators are showing us that the direction of the trend is moving downward (SELL).

2. Looking at the 1 Hour Chart we enter a SELL trade when our 3 indicators comply with the trend identified in the 4 Hour Chart.

3. Although the MACD and Stochastic indicate a possible change in the direction of the trend we stay in the trade until the 3 EMA crosses the 5 EMA and the candle body closes above the 12 EMA.

4. Exit with a 235 PIP gain when the 3 EMA crosses the 5 EMA and the candle body closes above the 12 EMA.

5. Although the 4 Hour chart indicates the trend is still downward we wait to enter another SELL trade when the conditions on the 1 Hour chart identify the opportunity. A 355 PIP gain if you stayed in the trade until the trend reversed.

Options

1. On the 4 Hour chart you can see the 3 EMA did not cross the 5 EMA and the Candle body remained below the 12 EMA. Although the MACD and Stochastic were telling us there is a possible trend direction it was short lived – you could stay in the SELL trade if you are brave.

2. You could take an opportunity to enter a BUY trade on the 1 Hour chart for a short gain on the retraction indicated by the MACD and Stochastic change on the 4 Hour chart.

3. You can enter a BUY/SELL trade in the direction of the 4 Hour chart trend on the 1 hour chart. The 4 Hour chart is only used to identify the direction of the trend.

STOP/LOSS

1. Set your STOP/LOSS at 40-50 PIPS on trade 1
2. Set a trailing stop on trade 2

LIMIT

1. I enter two trades; Trade 1 with a limit of 25 PIPs and Trade 2 with no limit and exit when the 1 Hour chart indicates the exit position or let your trailing stop exit the trade for you.

See attachment for Chart examples
Attachments
3 Indicator Crossover.doc
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Happy Trading
Pendolan
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Re: 2 Charts 3 Indicators

Postby Edward Revy » Wed Mar 31, 2010 11:27 pm

Thank you!

I've pulled out the screen shots with full size images for an easy access.
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eurusd_4h_exp.png
eurusd_1h_exp.png
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Re: 2 Charts 3 Indicators

Postby cpr » Thu Apr 01, 2010 11:14 pm

Hi Pendolan, Since how long you are trading on this strategy ?
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Re: 2 Charts 3 Indicators

Postby Pendolan » Fri Apr 02, 2010 8:57 am

cpr,

This is a fairly new system that I am trying out and I have been trading with it for about 2 weeks on a live account. I have had good success with it as long as I have been patient and waited for the signals an not assumed the conditions were going to be met based on the forecasted movements of the candles.

That is to say I have been successful (13 trades) with every trade that I did not "jump the gun on". I have had 4 unsuccessful trades, however these were entered with an assumption the signal was going to be met rather than waiting for it.

I am hoping others will take this system and try it out for more feedback or improving upon it, but it has been good for me thus far.
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Re: 2 Charts 3 Indicators

Postby Azim166 » Mon Jun 14, 2010 6:13 am

Hello Pendolan,

I am really impressed with your strategy here, but i have few questions :

1) if the 4 hour chart showing that it is an uptrend, so i should be looking for a buy signal only in 1 hour chart?am i right?
2) When 4 hour chart shows an uptrend, and on the 1 hour chart, the 3EMA crosses the 5EMA and the candle closes above 12EMA,that is the time to enter?
3) Does it nescessary when the 4 hour chart crosses, the 1 hour chart Should also cross at the same time?
4) In one day, how often you can get the signals?and what is the best time to trade in using your strategy?

looking forward for your reply.

regards,
Azim
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