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
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.
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.
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.
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
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
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.