MTF Trading System - fxozgirl Higher Time Frame spinoff

[fxozgirl]

I've been reading through and still very impressed with the results given the simplicity and lack of discretion applied. However I would be uncomfortable with the degree of move back into negative territory such as the AUDUSD has currently.
Like you intcust that was my very first question, where do we kill the trade if it doesn't get to BE and before waiting for a weekly trend change?!

This NZDJPY entry you've taken this morning Shelley also intrigues me. Yes we still have the green arrow but the 8 is actually above the 3SMA on the weekly. I would have thought you would wait for it to actually cross back up on the weekly chart?
Also interesting is the daily candle on one of my demo platforms closed lower than open but the Global Prime platform is just a fraction higher forming a bull pin. I think these factors would make me wait and see, and that's where I start applying discretion which can be beneficial but can also be detrimental?!!

Thanks for all your time and effort to start the thread with clear explanations and charts Shelley. Very much appreciated.

Cherry, thanks for your comments!

The main thing I am doing at this point of time is testing the rules of the strategy to see how they stand up to various market conditions...that means I'm NOT going to be discretionary about when I take a trade or when I exit a trade just yet because I want to see if the rules are good enough to produce enough profits to take the strategy live. So far after 4 weeks, the rules are working...will they continue to? I don't know, but I will continue to test for at least another 2 months, sharing my results here in this thread and then review the results.

With that being said, I like my strategies simple...I just don't have time to pore over 3 different charts for every pair 3 times a day to see if I should take a trade or not. If we look long enough & hard enough we will always find a reason not to take a trade!

Trading the higher timeframes means we need to allow our trades to move...this takes time to get used to especially if you are new to trading Daily charts which some people can & some people can't.

The AUDUSD has only had 2 trend changes on the weekly chart in the last 12 months (according to our criteria on this thread) - a down trend Oct 2013 - Mar 2014 and an uptrend since March, although there has been numerous trending & pullback periods during this time which is completely normal market behaviour.
So the question is...is this just a pullback before a resumption of the uptrend or is the market preparing to change direction to a downtrend?
I don't know! All I do know is:
1. Weekly trends do not change very often
2. For the purpose of testing the strategy and based on results to date I am prepared to hold my trade until it either resumes in the direction traded or there is a change of trend indicated.
3. If Monday morning shows a trend change, then I will close the trade and move on...if it doesn't then I will continue to hold the trade
My personal preference is to not use a stop loss, but It may well be that some people may prefer to use some type of ADR based stop.

NZDJPY
1. We are taking the direction of the trend from the weekly chart we are NOT TRADING on the weekly! Therefore I am not interested in seeing/knowing the position of the MA's etc on the weekly chart because I am not using them for my trading decision.
2. I am trading a Global Prime demo,on my platform the daily candle clearly closes above the 3SMA although obviously not a very large candle. (All I can suggest is trade the chart you have, so if your candle didn't close above then don't take the trade)
3. Again I am trying not to be discretionary, so I can test the rules thoroughly, so I am not reviewing candle patterns etc...ultimately if the rules are strong enough and remain simple enough, hopefully Steve may be able to code an EA

At the end of the day, we all must trade how it suits each of us for time and personality.

[Cherry]

Thanks Shelley, I can see your strength of mind with fx is just like your avatar!
Thanks also for your detailed answer. I understand better now where you're coming from... and heading to. It will be interesting indeed to see how it plays out over time keeping it totally non discretionary.

Meanwhile I'll try it out but probably adding some discretion along the way.
Cherry

[fxozgirl]

Thanks Shelley, I can see your strength of mind with fx is just like your avatar!
Thanks also for your detailed answer. I understand better now where you're coming from... and heading to. It will be interesting indeed to see how it plays out over time keeping it totally non discretionary.

Meanwhile I'll try it out but probably adding some discretion along the way.
Cherry

You're welcome Cherry...we all trade the way we feel most comfortable. Please let me know how you go and continue sharing your thoughts for your trading decisions.

Cheers
Shelley

[fxozgirl]

No problem, I'm actually very interested in this strategy because I work shifts and a long time frame strategy is ideal at the time with my life situation being the way it is right now.

Well I just entered 25 trades... lol

If this was a live account I would be looking for the start of the next weekly bar to start, but has this is a demo no problem there.

Regarding the SL's, my next step is using MPTM for the BE, and then I will use e-mail alert to a e-mail account synchronized with my tablet for the trailing stops. It will probably be a PITA to set up all those alerts, but until I find out to code that thing up there (and I don't even know if I will be able to do it) it will have to be so.

I've got 2 study cases I have questions about if you can look at them:

Case 1 - Weekly trend is up. The "freshly" closed bar has full MTF indi compliance and it's close is above the 3 MA, but I am not sure if I should wait for another D1 candle close because it appears on that on the candle that just closed that the 3 MA was still below the 8 MA. What do you think about this? I don't know if that in case price comes down sufficiently we would see that the 3 MA line never went above the 8 MA... or maybe I'm just overthinking it...

Case 2 - Look at the top left quadrant of the chart, the bar close indi says the bar will close in MINUS 32 minutes... lol any one has any idea of what's happening here? Maybe the silver market is closed or something?


Thanks in advance, wish you all a great day! Cheers!

Case 1 - 3SMA has not crossed 8SMA yet...wait for 1 more candle and see

Case 2 - sorry, can't see what you're referring to??

Cheers
Shelley

[diogou]

Case 2 - it was just lag, the new daily candle took more almost 40 minutes to appear, but it did appear. I was wondering metals only traded during London or something to that effect, but it was just really lag.


By the way, My floating profit reached +1% today... But I will have to change the SL management for those pairs with huge spreads and change lot sizing for the metals (I'm going to use 0.01 lots for each 3000 balance) and pairs in which each pip on a 0.01 is worth to little...

[johnf]

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[zader]

Hi Shelley, I'd just got all my charts set up to trade this system when you posted your template so I loaded it up just to be sure I was good to go and hadn't messed up, my 3MA + 8MA's were all off so I checked against your template and I see you're using Smoothed MA's, it might just be me( it usually is) but I took your instructions from post 1>
(i) Moving Average 8 SMA Close
(ii) Moving Average 3 SMA Close
to be Simple MAs, smoothed is SMMA and the difference is ma's crossing over can be a day or 2 so you might want to clarify it just in case anyone else makes my mistake.

[intcust]

john,

that your approach factors this in beautifully and that "safety in numbers" is what comes to mind which makes it perhaps a better proposition.


Is not really true in this case. Right now the USD is strong all pairs crossed with it are long the dollar except aud usd which has an up arrow on the weekly showing aud strength. The pound is mixed which supports your view and the eur is strong except against dollar. So if something happens that triggers dollar weakness another 9-11 or banking issue the dollar would plummet and over half our trades would be getting killed. A large spike will not be caught by a moving avg. cross. they are just way to slow. So I don't think we can rely on safety in numbers when most of the trades will be in the same direction of what ever currency is strong or weak at the time. Right now it is the dollar US. Was the Eur a few years ago. It does change. I think maybe a catastrophic stop should be applied maybe 500 pips. Or step into the trades. Meaning take one let it get +100 then the next trade goes on and so forth so that if something major happens we only have one trade getting killed. Of coarse if this is if it all goes against us. If the major even is in our direction we are very fat. But the fox usually does not work that way. Remember when everyone was doing gbp jpy carry trade and making money off the interest (swap) then boom it collapsed and so did there acct. I realize demo trade it does not matter and right now we are testing to see it this hold up. So put the trades on per the rules in a demo on as many pairs as possible to find out the ability of this to work. If it does and real money is in play then we have to think about it. If it is a small acct, and aggressive strategy one might want to get a lot of trades on all at once. As the acct. grows and the trades come and go my issue might not be and issue because only one or two new trades are going on while the rest are above 100 pips which is our safety zone. I like the simplicity of the system and trading time works for time frame. I am not trying to be a na sayer. I am trying to look down the road with a large acct. and protect it. I like the system and will work to help grow it. I hope it does not really need any growth. I hope it stays solid as it is. What problem if we only have to worry about a huge economic issue to preserve or acct. I know we can over come that. I am just trying to point it in advance. Stops right now are the least of our issue. I think right now getting data in on the trades is of the most important idea. fxozgirl has pointed out at least two months more is required. I agree with that. We are just getting over summer now and market will move more.

[diogou]

Yes, I was thinking about that just today, I looked at what kind of correlation I was having in my trades and I'm massively bull on the dollar, which got me thinking, that with 10 out of 20 trades open being dollar buys, if dollar went down the toilet I think a MC would become a real threat (even with trading 0.01 lots per 1000€ of balance) depending how far down the toilet it went... I think the next step is really to think about a "Shirt Protection" SL (has Steve calls it on the MPTM manual) and a way to minimize correlation, maybe by choosing the max amount of correlated positions we want and then selecting the pairs to trade if we have more options to enter than max amount of correlated positions allowed (and then here is where discretion and/or CSS might enter the picture)... Anyway, has you say, it is good practice to push this to the max in a mechanical way, to see where it gets us...

[diogou]

On the same topic, look at what XauUsd did after the first valid entry after the most recent bear candle on the weekly.

PS: when I measure metals with the crosshair tool, is the last digit a pip or a pippete? If I measure 2000 between between point A and point B am I looking at a 200 or 2000 pip distance? Thanks in advance, have a great day everyone! :hi: