Advices for ADX/EMA trading system please!!!

[Akira007]

Hi everybody,

I recently started to trade on a real money account, after a while trying on demo accounts I made a trading plan and would like to know what you think about from our previous experiences/ what could I improve.

Product : AUD/JPY, EUR/GBP, EUR/USD and USD/CAD

Money managment : 2.5% risk on one trade, 5% max on the overall account.

Entry point :

1)Start with a 30min chart to determine the trend with ADX(14) and EMAs 60 and80.

Decide to go long when EMA 60 above EMA 80 and when ADX is superior to 20 and ADX+ above ADX-

Decide to go short when EMA 80 is Above EMA 60 and ADX superior to 20 and ADX- above ADX+

2) Jump on the 5min chart and use a full stochastic(14,3,3) to enter the trade when the slow stochastic crosses above the fast line.

STOP LOSS : last 5 candles high/low based on 30min chart.

EXIT: 1) Trailing stop between 2.5 and 3 times the Stop Loss
or 2) ADX- crosses above ADX+ for long, ADX+ crosses above ADX- for short.

Any comment appreciated. Thanks guys.

 

[eegozi]

Hi everybody,

I recently started to trade on a real money account, after a while trying on demo accounts I made a trading plan and would like to know what you think about from our previous experiences/ what could I improve.

Product : AUD/JPY, EUR/GBP, EUR/USD and USD/CAD

Money managment : 2.5% risk on one trade, 5% max on the overall account.

Entry point :

1)Start with a 30min chart to determine the trend with ADX(14) and EMAs 60 and80.

Decide to go long when EMA 60 above EMA 80 and when ADX is superior to 20 and ADX+ above ADX-

Decide to go short when EMA 80 is Above EMA 60 and ADX superior to 20 and ADX- above ADX+

2) Jump on the 5min chart and use a full stochastic(14,3,3) to enter the trade when the slow stochastic crosses above the fast line.

STOP LOSS : last 5 candles high/low based on 30min chart.
EXIT: 1) Trailing stop between 2.5 and 3 times the Stop Loss or 2) ADX- crosses above ADX+ for long, ADX+ crosses above ADX- for short.

Any comment appreciated. Thanks guys.

If you are using trend following entry for long and short positions why are you arbitrarily choosing a stop based on 5 candles hi/lo? Have you backtested this as being something special and does it hold across ALL instruments?....doubtfull. Why not just use the EMA cross or falling ADX or DI+/DI- cross or even use some of Dr. Charles Schaaps criteria for ADX. Read his book "ADXcellence". This might help.

Good Luck

 

[Akira007]

Thanks man, I'll have a look into it, to be honest my stop loss was a bit random, just seemed a safe choice.

 

[ronblack]

Why don't you backtest this monster?

 

[eegozi]

do you think that his book is helpful in this ~

Yes. I think it offers some insight into using ADX and DI+/-. Very easy read in 2 days or so. I do not use his system exactly as he describes but I do see that his system seems to confirm moves and does seem to catch the meat of the trend. I just do not like to see as much risk of profit as a trend retraces. He would suggest to hold during the retacement and buy more in an uptrend as the market retraces. I prefer to take profits and then get back in again. I think the more information you have the better,...you just may not use all the information at your disposal on every trade.

 

[natureboy]

The amount risked per trade is high for my taste; 1.0% is my max per entry.

You will miss most of the moves usually with this I think, by the time 30m ADX signals a trend do you have moves often enough to allow net profit after costs? To best capture what you can, the trailing exit is good idea - I've heard using a % open profit loss for trailing stop out, like 10% open profit lost, could be good. Or try parabolic..

Definitely program and backtest before risking money