Hi bulkbiz,
I did not test my method on the forex market as the focus of my paper is the equity market. However, whatever analysis I have done thus far can be done by any numerically literate person. Just get the data in whichever time frame, generate the moving averages in Excel, and do some number crunching. You never know what sort of insight it may provide. I am also finding that using longer-term moving averages gives greater returns. But the drawback is, of course, the long-term moving averages generate less trading signals!
I am not sure what other advice to give you, besides what I already have said. I do not trade these systems as I am a day trader at heart. However, if you are finding that your friends, who utilize the same method as you, are making more pips, then maybe
that is their trading system. What I mean by this is there could be a possibility that in their historical analysis, your friends have identified that after having a 700 - 800 pip open profit a trade, the market is likely to reverse, even if the MACD does not convey a signal for exit.
Maybe you could do a similar analysis and determine at what open profit in pips the market is likely to reverse could signal an exit. This could, effectively, be part of your trading methodology. You don't necessarily need another indicator to confirm an exit. At the end of the day, the objective is to generate a methodology that has the highest probability of success and generates the highest profit.
Remember, for every indicator that tells you to stay in the market, there is an indicator that tells you to get out. If you find that, on average, closing a position after having an open profit of 700 - 800 pips works better than whatever exit signal you are using right now, then I suggest incorporating that into your exit signal. You'd make more money!
Amit
Hi Amit,
Thank you very much for the advice and your analysis. Actually my entry signal is based on renko chart. But in order to maximize the profit and minimize the losses, I need some indicator to help. So far for non volatile pairs, my method is good. But Amit, did you test in forex market?
A lot of people misunderstood and get the word "trend trading" wrongly. Trend trading has no specific take profit level. When I shared with my friends about my trading strategy, they earn more than me, reason is because when the pips reaching 700-800pips, regardless of the trend is still moving on their favor, they will take profit. But in fact that is not consider as trend trading already, they violate the rules.
MACD is the only indicator for me to identify the trend changes currently, any other value advice for me? Remember my rule is cut losses when the market is ranging and let the profit run when market is trending, I don't want any trailing stop, fibo level, round number, psychological number and so on. I just need some indicator/method to detect earlier trend changes.
