5 EMA HIGH LOW CHANNEL SYSTEM First of all, I want to thank Sterling for introducing me to the 5 ma hilo channel system. I have changed a few things, more to my style, and comfort level, and with less risk. The idea is to put a 5 ema high, and a 5 ema low on a chart, any time frame you want, and this forms a channel. When price moves out of the channel, we look for candles fully or mostly outside the channel. I prefer small range candles and not to enter the trade if the setup candle goes half way into the channel... we need room for it to move. A break of that candle in the oposite direction triggers an entry. Stop loss would be 1 pip above or below the setup candle. Profit taking is up for discretion, but usually it at least reaches the opposite channel. If counter trending one might then take full profits, if trend trading partial profits could be taken with SL set to break even. as long as candles go in the profit direction, stay in the trade, once a reverse candle, or setup is made, then close the trade and reverse with proper signal. I look for follow through and momentum. If after 2 or3 bars you're still not in profit, it might be a good idea to exit before your SL gets hit. In most cases you'll see follow through on the next candle after entry. I have found that while not every trade is profitable, that many are, especially when we look for candles outside of the medium range, preferably small range candles, at the top or bottom of a swing, so our SL is smaller. Also there are times when this system works great, and other times in extreme trends, or tight ranges it doesn't, but I have this idea that someone with good coding ability and peoples ideas for profitability that finally a profitable EA could be coded. Any takers? I'm not a coder yet, although I'm ever tempted to learn. Attached Images (click to enlarge)
Transcript
5 EMA HIGH LOW CHANNEL SYSTEMFirst of all, I want to thank Sterling for introducing me to the 5 ma hilo channel system. I have changed a few things, more to my style, and comfort level, and with less risk.
The idea is to put a 5 ema high, and a 5 ema low on a chart, any time frame you want, and this forms a channel. When price moves out of the channel, we look for candles fully or mostly outside the channel. I prefer small range candles and not to enter the trade if the setup candle goes half way into the channel... we need room for it to move. A break of that candle in the oposite direction triggers an entry. Stop loss would be 1 pip above or below the setup candle. Profit taking is up for discretion, but usually it at least reaches the opposite channel. If counter trending one might then take full profits, if trend trading partial profits could be taken with SL set to break even. as long as candles go in the profit direction, stay in the trade, once a reverse candle, or setup is made, then close the trade and reverse with proper signal. I look for follow through and momentum. If after 2 or3 bars you're still not in profit, it might be a good idea to exit before your SL gets hit. In most cases you'll see follow through on the next candle after entry.
I have found that while not every trade is profitable, that many are, especially when we look for candles outside of the medium range, preferably small range candles, at the top or bottom of a swing, so our SL is smaller. Also there are times when this system works great, and other times in extreme trends, or tight ranges it doesn't, but I have this idea that someone with good coding ability and peoples ideas for profitability that finally a profitable EA could be coded. Any takers? I'm not a coder yet, although I'm ever tempted to learn. Attached Images (click to enlarge)
Joined Oct 2006 | Status: Infinite Possibilities | 384 Posts
Here's a screen shot of the last couple hours today, on 6 pairs, M15 .... high probability, low risk setups for some pips. I'm surprised this method hasn't sparked any interest or response..... Is it my winning personality or what?
Although I also use other trading methods, mostly price action related, I also keep an eye on this system because of the high probability of short range (small SL) island type candles on the swing high/lows Attached Image (click to enlarge)
Joined Oct 2006 | Status: Infinite Possibilities | 384 Posts
Or this one, on the H1 AUDUSD Pair
Some of these signals arent ideal for what I look for as the SL is big enough, but they would've been good for some pips. Some of these signals are none other then inside bars, and plenty of people trade the break of these... I like small inside bars in conjunction with pin bars, to indicate a reversal is probable.
Here's the template I use if any one is interested Attached Image (click to enlarge)
The Price cannot escape your H/L MA's by much as you are recalculating them every 5 Bars. I suggest paying attention to the Slope {steepness} of your MA's may improve your quest.
Post 5 Quote
Dec 19, 2008 9:16pm
dbeach777
Joined Oct 2006 | Status: Infinite Possibilities | 384 Posts
This is true, to an extent, but once a candle is closed, that moving average value won't change.. I trade the break of closed candles outside the channel idealy, or at least on the outer band of the channel, and yes, a good angle on something like ema 60 might indicate that a trend is in action, but ema 5 is so short term that it can go from angle to flat in very short time, thus, my reasoning is that if an entire candle can form outside this channel, or mostly outside this fast, moving average, then break the oposite direction, that price had moved to fast, too far, and may snap back to medium at least, or possible even reverse.... I have profited nicely from trading this but you are absolutely right, it's much easier to pick out the winners after the fact.
I may start posting some of the higher time frame, A1 type setups if I see them develope
Thanks for your input Bemac! Post 6 Quote
Dec 20, 2008 12:49pm
frugal
| Joined Nov 2008 | Status: Member | 22 Posts
hey bro thanks for sharing.. it seems interesting and plain system!
| Joined Apr 2007 | Status: I get exersise just pushing my luck | 338 Posts | Online Now
Hi,This system reminds me of Dean Malone's Synergy. However, he uses a Heiken Ashi setup with the 5 ema's.I like your approach of attacking the potential turning point on the PA.Have you tried this on the 1m or 5m TF with success?Thanks for sharing your method.Cliff
Quoting dbeach777This is true, to an extent, but once a candle is closed, that moving average value won't change.. I trade the break of closed candles outside the channel idealy, or at least on the outer band of the channel, and yes, a good angle on something like ema 60 might indicate that a trend is in action, but ema 5 is so short term that it can go from angle to flat in very short time, thus, my reasoning is that if an entire candle can form outside this channel, or mostly outside this fast, moving average, then break the oposite direction, that price had moved...
Trade well and follow the trend, not the so-called “experts.” Post 8 Quote
Dec 21, 2008 1:20pm
dbeach777
Joined Oct 2006 | Status: Infinite Possibilities | 384 Posts
I'll check out Dean Malone's Synergy system, I haven't read about it yet.
Check out the EU M1 chart above
The M1 and M5 time frames are not as acurate at M15 and up, as it tends to get choppy quicker, but there have been times when I've traded M1 and M5 with this succesfully, but it helps to know something more about market action like Support and Resistence, price reaction to certain moving averages, PPZ etc... thats where discretion comes into play and thats something you can't code into an EA. The ideal setup as I've said before is when a strong candle moves far, out of the channel, then the next candle is small,(setup candle) then the next candle breaks back into the channel... You can't know whether they will work out or not as they are developing, but the good thing is R/R, as the SL generally is smaller then potential pip gain, and, more setups work out, then not...
Another chart........ check out the candles marked with a red check mark that didn't work out.
Quoting cceHi,This system reminds me of Dean Malone's Synergy. However, he uses a Heiken Ashi setup with the 5 ema's.I like your approach of attacking the potential turning point on the PA.Have you tried this on the 1m or 5m TF with success?Thanks for sharing your method.Cliff
Attached Image (click to enlarge)
Post 9 Quote
Jan 2, 2009 7:15pm
dbeach777
Joined Oct 2006 | Status: Infinite Possibilities | 384 Posts
I'm still waiting to see if anyone wants to program an EA for this system....???Rules are, setup bars must be at least 75% outside of the channel... enter trades on a break of the
setup bar, towards the channel, but only if the break happens on the next bar, Stop Loss will be 2 pips more then the range of the setup bar, Take Profit will be multi choice, with first take profit either a set amount of pips, or a touch of opposite side of the channel. Attached Image (click to enlarge)
Post 10 Quote
Jan 3, 2009 5:42am
Blazer
| Commercial Member | Joined Sep 2007 | 284 Posts
Alo alo,
Maybe you should try the tsdmaniacs ,lol
Cheers
B Learn something difficult and earn real money for ever, a lot.
Quoting dbeach777Is it my winning personality or what?
lol? Post 12 Quote
Jan 3, 2009 10:54am
LaTeCoMeR
Joined Oct 2008 | Status: Member | 220 Posts
I'm still waiting to see if anyone wants to program an EA for this system....???Rules are, setup bars must be at least 75% outside of the channel... enter trades on a break of the setup bar, towards the channel, but only if the break happens on the next bar, Stop Loss will be 2 pips more then the range of the setup bar, Take Profit will be multi choice, with first take profit either a set amount of pips, or a touch of opposite side of the channel.
This is more like Dean Malone's Symertric system for PA on utube...
Post 13 Quote
Dec 19, 2010 5:02am
king pippin
| Joined Oct 2010 | Status: Member | 40 Posts
Hello every one,Just wondering if any one is still using this system, if so how long and what are your results like!
Joined Oct 2006 | Status: Infinite Possibilities | 384 Posts
I'm still very much interested in this system, but I also consider that there are other viable reasons to enter trades, like trend line breaks, S/R breaks, and 60ema breaks, a sort of floating S/R line. The key also seems to be that its not a signal unless the high or low of the setup bar are broken. The presence of divergence seems to make it a better signal but not always necessary. Taking profits is discretionary but a minimum TP level seems to be a touch of the opposite 5ema hilo channel . I don't take this as a stand alone system, but add it to my tools of trading to give me that edge. Lets revive this thread and update realtime Setups.
Cheers, and a Happy Holiday season to all!
p.s. the setup bar (pin bar) just before the trend line break, never broke the high, so a trade wouldn't have been entered, and thus a lose avoided
Quoting king pippinHello every one,Just wondering if any one is still using this system, if so how long and what are your results like!
5. if TakeProfit is left to zero, tp is the opposite MA. In any case, the bot will close the trade at the opposite MA, so long as the trade is in profit. This function can be made a user option if you choose
6. MaxCandleLength is the maximum setup candle length. The default of 20 is pure guesswork
7. there are the usual mptm-style management features. If unfamiliar with mptm, the user guide is available in the thread - link in my signature
8. the bot automatically accommodates pips inputs to x digit criminals, so enter these in proper pips
The bot keeps on taking a bath in backtesting. On forward demo, it has taken 4 trades on the EU M1 chart, with three of them being successful. I would not have expected this.
I can code most things these days, so sing out if you would like further refinement.
Attached Filedbeach's 5EMA channel trading robot by Steve Hopwood.mq4 44 KB | 332 downloads Post 16 Quote
