MTF Trading System - fxozgirl Higher Time Frame spinoff

[fxozgirl]

I have been trading an adapted version of the MTF Trading Sytem posted by johnf http://www.stevehopwoodforex.com/phpBB3 ... =16&t=3746 on higher timeframes with very good results to date, so rather than pollute John's thread and confuse members I decided to start this thread where I will discuss the method I use to trade John's system and will post charts, trades and results along the way. To understand how I am trading here, you will need to understand how John trades his MTF system. If you are not familiar with John's system, stop now and go and read his thread first. I am not going to spend time on the pro's/con's of the indicators used, I am merely discussing my adaptation for trading it. For a more indepth discussion on how the indicator's work, please refer to John's thread.

Before I move forward, I'd like to firstly thank John for his selfless sharing of his system and appreciate his willingness to help his fellow members. John has been trading his system successfully for some months, so in no way does this thread mean to undermine John's methods, but simply a spin off that I devised that suits my trading style and time I have available to trade.

Due to time constraints, I have adapted the MTF Trading System to trade on the Daily charts, using the Weekly charts for trend identification. I set up my demo on 13/8 with the first trades taken on 15/8.



Global Prime Demo
Starting balance: $5000 (13/8/2014)
Current closed balance: $11227.66 - UPDATED 9/3/2015
Floating balance: $6984.87 approx -4684 pips - UPDATED 9/3/2015
Leverage: 1:200
Pairs traded: All except any chf pair & eurgbp

MTF_results_9.3.2015.png

Indicators Required
(i) Moving Average 8 SMMA Close
(ii) Moving Average 3 SMMA Close
(iii) SMMA Crossover Signal - set to only show arrows on weekly timeframe
(iv) Multi Moving Average
(see indicators attached below)

Rules
1. Determine trend direction - Open a weekly chart and identify the most recent red/green arrow, mark the candle directly after the arrow with a corresponding red/green line. We will then be able to see this line on the Daily chart.
2. Red arrow on Weekly chart - we only take Sell trades on Daily
3. Green arrow on Weekly chart - we only take Buy trades on Daily
NB. Trend direction is determined once a week at the start of trading...either a new trend is set or a previously established trend is continuing.

gbpusd_weeklytrend_mtf.png

4. Once you have marked the weekly chart with your trend direction line, change to the daily chart where you will see your line.
5. Our trade entry is now determined by the MTF Moving Average indicator at the bottom of the chart. All 4 MA's must be in agreeance (ie. all red or all yellow) for us to place a trade.

6. Buy trade
(i) Green arrow on weekly
(ii) Green line indicating start of current uptrend
(iii) 3 SMMA must be ABOVE 8 SMMA
(iv) Trigger candle must have closed ABOVE 3SMMA
(v) 4 yellow dots on MTF Moving Average indicator - confirmed at close of candle
(vi) Place buy trade at open of new daily candle
Please note: the yellow dots do not need to correspond to the same candle the green line is on. There are times when it takes a day or two or even a week before the dots all line up yellow. The important thing is we WAIT until all dots are yellow before placing a trade.

cadjpy_daily_mtf.png

7. Sell trade
(i) Red arrow on weekly
(ii) Red line indicating start of current downtrend
(iii) 3 SMMA must be BELOW 8 SMMA
(iv) Trigger candle must have closed BELOW 3SMMA
(v) 4 red dots on MTF Moving Average indicator - confirmed at close of candle
(vi) Place sell trade at open of new daily candle
Please note: the red dots do not need to correspond to the same candle the red line is on. There are times when it takes a day or two or even a week before the dots all line up red. The important thing is we WAIT until all dots are red before placing a trade.

gbpusd_daily_mtf.png

Trade Management:
1. No initial stop loss or take profit is set
2. When trade moves to +100 pips, place stop loss at Break Even +5 pips
3. For every subsequent 50 pips profit gained, move stop loss another +50 pips eg. Trade is at +150 pips - move stop to +50 pips, trade is at +200 pips - move stop to +100 etc. (Basically a 50 pip jumping stop starting after the trade has reached +100 pips)
4. Trade closes either at a retrace to the jumping stop line or
5. Close trade if there is a new trend direction indicated on the weekly chart.

Now, as the trend doesn't change very often on the weekly chart, it becomes necessary to be able to enter into an already established trend or re-enter into the trend after a trade has closed at the jumping stop. Most importantly, be patient, especially if you are trying to enter in a well established trend. We do not want to enter at the peak of the run, so we must wait for a pullback first.

Re-entry Buy trade:
1. Establish trend direction is still up (green arrow) on the weekly chart
2. Wait for a pullback of at least 1 (can be more) red candle(s) on the daily chart
3. Wait for at least 2 completed green candles (after the red candles) on the daily chart
4. Ensure 3 SMMA is above 8 SMMA
5. Trigger candle must have closed ABOVE 3SMMA
6. Ensure all 4 dots on the MTF Moving Average are yellow (confirmed by the close of the candle)
7. Enter Buy trade at open of next daily candle

usdchf_re-entry_buy_trade.png

Re-entry Sell trade:
1. Establish trend direction is still down (red arrow) on the weekly chart
2. Wait for a pullback of at least 1 (can be more) green candle(s) on the daily chart
3. Wait for at least 2 completed red candles (after the green candles) on the daily chart
4. Ensure 3 SMMA is below 8 SMMA
5. Trigger candle must have closed BELOW 3SMMA
6. Ensure all 4 dots on the MTF Moving Average are red (confirmed by the close of the candle)
7. Enter Sell trade at open of next daily candle

euraud_re-entry_sell_trade.png

So early days yet, and yes I have taken some losses but hopefully over time the wins will outweigh the losses. I will post some charts below of trades I have taken and those that are currently active. Please feel free to ask any questions and please remember PATIENCE is required when trading these higher time frames, both in taking and holding trades and waiting for the right set up. If you are used to scalping on the 5 or 15 min charts it's highly unlikely this method will suit you.

[fxozgirl]

2 trades taken so far on CADJPY, both when I first started trading this system and I was still ironing out my entry/exit criteria...so neither trades quite follow the rules as they are now.

First trade on 19/8
1. Buy trend as determined on weekly chart
2. 3SMA (green) crosses above 8SMA (pink)
3. All 4 MTF MA's line up as yellow
4. Entry trigger candle marked with grey line
5. Entered buy trade on next candle
6. Closed at -15 pips

This was one of the first trades I took with this system and was still determing an exit strategy. Initially I had decided that I would close any trade where the MTF MA's no longer matched, however I soon discovered this happened quite often and I was closing trades prematurely for a loss before the trade obligingly moved the correct direction.

Subsequently I re-entered back into the trade as soon as the MTF MA's lined up again. This trade is still active, with JS set at +150 pips

cadjpy_daily_mtf(2).png

[spotdespot]

Thanks for the insight Shelley.

You might find the attached indi helpful as you can avoid having to draw the weekly lines. Probably a personal choice thing but I thought I would post it anyway.

Bear in mind that it can change colour mid-week (as the lines are crossing on the weekly giving you a heads up) but you would probably want to wait for the weekly candle to close before taking a trade.

You can get an alert during the week as the candle crosses or set "alertsOnCurrent" to false and it will only alert at the close of the weekly candle.

The vertical line corresponds to your weekly arrow for reference.

Cheers,
Dave.

[fxozgirl]

Another early trade where I screwed up twice which ended up costing me big time!

GBPNZD - Buy 21/8
1. Buy trend as determined on weekly chart
2. 3SMA (green) DID NOT cross above 8SMA (pink) - MISTAKE
3. All 4 MTF MA's line up as yellow
4. Entry trigger candle marked with grey line
5. Entered buy trade on next candle
6. If I was on the ball I could still have got out of this trade at BE + 5 as the trade did actually get to +117 pips, but again I was still working on my exit strategy...pretty much I think it was this trade that convinced me to place a stop at BE after 100 pips lol. Closed at -358 pips after a change in trend direction on the weekly chart

gbpnzd_daily_mtf.png

[fxozgirl]

Thanks for the insight Shelley.

You might find the attached indi helpful as you can avoid having to draw the weekly lines. Probably a personal choice thing but I thought I would post it anyway.

Bear in mind that it can change colour mid-week (as the lines are crossing on the weekly giving you a heads up) but you would probably want to wait for the weekly candle to close before taking a trade.

You can get an alert during the week as the candle crosses or set "alertsOnCurrent" to false and it will only alert at the close of the weekly candle.

The vertical line corresponds to your weekly arrow for reference.

Cheers,
Dave.

Hi Dave,

Thanks for sharing your indi...I'll take a look

Cheers
Shelley

[fxozgirl]

EURJPY - Sell 27/8/14

1. Re-entered into an existing down trend as determined on weekly chart
2. 3 candles in the direction of the trend following a multi candle pullback
3. 3SMA (green) crosses below 8SMA (pink)
4. All 4 MTF MA's line up as red
5. Entry trigger candle marked with grey line - probably 1 candle too early as the SMA's had just touched, although there would have been virtually no difference in entry price.
6. Entered sell trade on next candle
7. Moved trade to BE +5
8. Trade closed after a retrace to the BE line

eurjpy_daily_mtf.png

[fxozgirl]

EURCAD - Sell 15/8/14

1. Down trend as determined on weekly chart
2. 3SMA (green) crosses below 8SMA (pink) - JUST! Another early trade, taken 1 candle too early
3. All 4 MTF MA's line up as red
4. Trade closed after a retrace to the JS line +400 pips

We're now in the midst of a multi candle pullback although weekly trend is still down. Waiting for the next opportunity to enter

eurcad_daily_mtf.png

[fxozgirl]

EURAUD - Sell 15/8/14

1. Down trend as determined on weekly chart
2. 3SMA (green) crosses below 8SMA (pink)
3. All 4 MTF MA's line up as red
4. Trade closed after a retrace to the JS line +400 pips

We're now in the midst of a multi candle pullback although weekly trend is still down. As per the EURCAD, waiting for the next opportunity to enter

euraud_daily_mtf.png

[fxozgirl]

AUDNZD - Buy 22/8/14

1. Up trend as determined on weekly chart
2. 3SMA (green) is above 8SMA (pink)
3. All 4 MTF MA's line up as yellow
4. Trade closed after a retrace to the JS line +100 pips

audnzd_daily_mtf.png

[fxozgirl]

EURNZD - Buy 29/8/14

1. Down trend as determined on weekly chart
2. 3SMA (green) is below 8SMA (pink)
3. All 4 MTF MA's line up as red
4. Trade closed after a retrace to the JS line +50 pips

eurnzd_daily_mtf.png