Start Winning - Trade the Current Trend

Updated November 27, 2016 <br> In the short time this thread has been active, there have been many ideas for improvements and subsequent changes to the template. I won't completely rewrite this article, as the information contained below still forms the basis upon which the system is built. The rules and templates published on day one still apply to profitable trading. Page 12 is the point where the new template starts to take shape, but to fully understand what's going on here anyone new to this thread must read everything that's been posted so far. I don't want to waste time explaining again questions that can easily be answered by reading the first few pages.

This is the new template I have. I've included RSI candles (Issue 8), but whether to use them or not is a personal preference - I don't use them. If you do use them, you can delete the RSI custom indicator if you wish.
V1 = 3 RSI and RSI customized in separate windows.
V2 = 3 RSI overlay RSI custom. These are located in the zip folder. There is one for each TF.
TF Template = Template with correct indicator settings for various time frames.





NOTE: The MA and RSI dashboard indicators do not change to match the chart they are automatically attached to. They need to be adjusted manually in settings.

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Below are the topic rules and some general thoughts, please read and respect them.

1. Ban Trolls - I don't know how to ban anyone, but if I need to and I can, I will.
2. I'm no expert, but I've learned a thing or two. Give the topic a chance and if it doesn't work for you, move on.
3. I believe that even the most experienced people can still learn (even from those with less experience).
4. My goal is to develop this trading method for my own use and to help some struggling traders if possible.
5. This post is not intended to teach novice traders the basics of trading, so please do your homework first.
6. I do not adhere to traditionally accepted rules of money management and I will not discuss this aspect of trading. We are all responsible for our own profits and losses. However, I will discuss my thoughts on stop loss and take profit placement.
7. I will add to, delete from, or modify these points as necessary.

Template (if using other time frames, you will need to adjust the MA below).

M5 Chart
10 EMA (solid blue)
10EMA applied to the previous 10EMA (pink solid)
120 EMA (dashed green line) - This shows the 10 EMA for H1
120 EMA applied to the previous 120 EMA (orange dashed line) - this shows the 10 EMA applied to the previous 10 EMA in the first half
3 Period RSI - Levels 10-30-50-70-90. Below 30 = oversold. Below 10 = Severely oversold. Above 70 = overbought. Above 90 = Severely overbought. Above 50 = Bullish. Below 50 = Bearish.

First half chart

10 EMA (solid blue)
10 EMA applies to the top 10 EMA (pink solid)
40 EMA (dashed green line) - This shows you the 10 EMA on H4
40 EMA applied to the top 40 EMA (orange dashed line) - this shows the 10 EMA applied to the top 10 EMA on H4
RSI as above

This is the basic M5 template. If you want to use volume candles, then you need to get them from the related thread mentioned above.



This is the M5 template with the RSI Dash added to the lower left corner. Just remember to adjust the RSI Dash settings to your application's chart.



Edit M5 and H1 templates - do not use 30 lwma. Use my preferred 10 EMA applied to the previous 10 EMA.



Conditions for short-term participation <br> The Thermal Oil 10 EMA (green dashed line) should be below the Thermal Oil 10 of 10 EMA (orange dotted line) line.
The 10 EMA (solid blue line) should be below the 10 EMA of 10 (solid pink line) (M5 TF).
Let the 3 RSI cross above the 50 line and enter short when it moves back below 50.

Conditions for long entries <br> The Thermal Oil 10 EMA (green dashed line) should be higher than the Thermal Oil 10 of 10 EMA (orange dotted line) line.
The 10 EMA (solid blue line) should be higher than the 10 EMA (solid pink line) (M5 TF)
Let the 3 RSI cross below the 50 line and go long when it moves back above 50.

Short-Term Trading Opportunities - Examples

The image below shows the AUDUSD M5 today and yesterday.
From when the H1 10EMA first crossed below the 30LWMA at the yellow square, you can see that it has not crossed above so far. This means don't buy - we want to be sellers.

Attached picture (click to enlarge)

This is GBPJPY M5 - these are the buying conditions - HTF 10 EMA is above the HTF 30 LWMA. These conditions mean we want to be buyers.



Stop Loss and Take Profit

Where to place your stop loss and take profit is your own decision, depending on your risk appetite and how much drawdown you are willing to accept to end up with a profitable trade. I went through a period of being unwilling to accept failure, which of course ultimately led to failure. All of this leads to undue stress and loss of money. Now I use SL all the time. If I were scalping on the M5 TF, I would place my stop loss below the 30 LWMA and move it up and down accordingly as the price moves in the right direction. If I lose, I don't care too much because there will be many winners.

I generally don't use TP.

index

1. Moving Averages - Free for everyone on MT4 or other platforms.
2. RSI - Free again. All I did was add a few colored boxes to highlight the OS and OB levels.
3. Volume Candles. Taken from the PVSRA thread. To see my recommended trading volumes, go to one of the threads. You can find a pdf file called "PVSRA". I highly recommend it.
4. When I'm out working, I use the MA cross indicator to alert me to possible opportunities. I don't trade crosses. I trade pullbacks.

Attachment

[MQ4] ma_cross_alert_once_b.mq4 9 KB | 1,571 downloads