DMAC System: Moving Average Cross System (Short MA:C,21,E,Long MA:C,34,E)
(I don't have image available yet, but I will in the near future)
"This is a well known system, usually referred to as the DMAC System. As might be expected, it uses two moving averages, a short period and long period one. The moving averages normally used are of the closing price.
When the short period moving average crosses over the long period one, a signal is generated to enter the market in the direction of the crossover. So, if the short MA crosses the long MA in an upward direction, that is a BUY signal and if the short MA crosses the long MA in a downward direction, it is a SELL signal. "
The two lines are blue and red of the 2 averages.
Chart time: 30 minutes 1H, 2H and up
It depends the currency, EUR/USD for example every 1-3 days.
How many pips can we gain from that system?
That depends, usually in the 30 minute chart from 20 pips minimum up to 100+ pips each time the two lines are changing.
When the lines are crossing, either they are going up or down, I place the trade and I use stop loss at 30pips and limit 30 pips.
The good part is that it can hit these pips the same day, and you can close the order the same day.
It is wise to hit the 30 pips and walk out!
Do Not get greedy, wait, no matter what, when the lines will cross again in 1 or 2 days and place an order again and repeat, that means don;t trade in between according to that system. Unless you have as an indicator another system and you know what you are doing.
In EUR/USD chart i have noticed that when the lines are crossing usually(not always) hits the 30pips almost right away, so I close my order and i get my profit without risking to get negative and hit the stop loss and lose money!
When the price doeasn't immediately hit the 30pips and up, the good news are that it doesn't get negative much BUT in some other currencies it might never hit 30 pips, only 20, so you will need to watch it.
Ex : From: 9Feb/10 up to 4March/10 the Moving Average Cross System, in EUR/USD 30minute chart has changed 7 times and hit at least up to 50-150pips each time. That's a 420 pips average in ten days.
For the greedy part,
Now, do we really need to make all these pips every time?
No, we don;t , we can set for 20 or 30 or 40 pips and be happy, without stress.
The key for success for that system is to be moderate and it can hit more than 90% success and profit because it can make the 30 pips easy business to make.
When you will be comfortable with that system in one currency pair you can use it in other currencies and double or triple the profit.
I recommend a 1:25 leverage, not very high, not extremely low, It will not eat your account using that system, and it will not make you super rich in one day, but it can give you good money and in the long run can be very profitable.
I use the 30 minute chart, and 1H chart, someone else might get more comfy with higher time charts which can be even more profitable. It is not recommended for the 15min chart and lower.
That System and Method together can be profitable even 100% if someone use it wisely with no greed.
FIRST use it on a demo account to watch it with the pair you want, how often gives the signal and how many pips usually makes minimum.
Also unless you are absolutely 100% sure that the price will hit 50 or 100 pips do not use that system to make every time that amount of pips, each time it shows us the signal.
Because the price makes many ups and downs sometimes without the Moving Cross Average to shows us a reversal signal, and we might get confused and lose money.
We can work it with MACD, Bollinger Bands, Hall Moving Average, Heikin -Ashi candlesticks(which personally i think that they are a must in trading with the Japanese Candlesticks).
How many pips per month can we gain with the minimum risk factor and loss?
The bigger time chart, the more secure the profit.
In the 30 minute chart it is easy to make 30pips and up the that system, at the same day.
in a 2H chart 50pips and up with that system at the same day.
We can use these charts and open and close an order in the same day.
We can use it in all currency pairs and make good profit out of it.
Like all trading systems, this one too have a risk factor which is the unpredictable market rule, but money management and demo practicing can minimize it even up to 99%
If you are working you will need to figure out a way to have an access to your account, or trade when you are not working and watch it to minimize losses in any case.
Some times it might even get 5 days for a reversal signal to take place to make another order. But it is worth the truble waiting and watching it.
But it is not the rule, usually in the 30minute chart 1-2 days in the EUR/USD.
Pros and Cons:
That it is not the Holly Grail people, but it might be the closest you might ever come to.
That method doesn't promise a certain amount of pips, you might get 200 pips per month profit, you might get 1000 pips per month profit.
That method has a very low risk factor and very promising predictable profits.
Practice the system first and write your results.
MA Cross Systems
The problem I have with MA cross systems is shown in the attached
photos. Both were losers and only a few hours apart. If price is
ranging, it doesn't take many of these to kill your profits.
Thats true, thats why you will need to watch it.
If the market ranges like crazy don;t buy either sell.
that it is one of the rules anyway when trading forex.
Also that depends in which time chart you have it.
In my 30minute chart everytime it crosses it makes at least 20 pips.
thats why I said , use big time charts, take the money and walk out fast.
Maybe not in few minutes, but in a couple of hours.
That means don't wait until the lines crosses again.
Also, what you have showed it is like 1 time out of 10 times.
If I had a chart I would showed to you.
But you can check out your own chart with EUR/USD with the dates I have above,
and u can see that most of the times it makes really good money!
I have upload 2 images.
The one is : short:21 Long:34
the other is, :short:10, Long :80.
I notice that when short is too short, can make bad signals,
but in the second chart ,the same indicator, doesn;'t shows us the wrong signal and avoids such mistakes.
I use for DMAC with Hull Moving Average, and it can be highly profitable in the 1 hour chart.
Opps, sorry, the omages don;t look good at all.
It is my first time!
Anyway, I will try again alter, but you can check it out yourself, with the short and long numbers in the same chart.
I will keep an eye on this thread.
Please upload your Hull MA. Thanks
You mean the indicator for mt4?
EMA Cross Inditor:
The images are good, after all, I recoment to use that system with the heikin ashi candlesticks, which i have also attached.
I also recoment to use short:21, long 34, (not the periods that are already in the indicator which are short:10, long :80), which it will not make to many small and false signals when the market it is ranging too much,
Also, it is very usefull to know triangles, wedges, pennants the western patterns.
with the smoothed candles and hall ma, I use 2 colors are really good with the 2 or 4 H chart to make trades besides the DMAC,
and follow good trends profitable.
EMA cross is pretty much always the first thing all new traders learn and if it worked as well as you seem to think it does then forums like this wouldn't exist.
That's not to say that they can't work. I agree that a lot of people probably trade in a range, which is a big no-no. One big mistake people make is to only look at one time frame. If you are trading on the 1 hour time frame and it shows a nice uptrend then you need to make sure that he daily time frame is also in an up trend if you are going to to trade this way.
The thing is, proper money management is so important here. Things like knowing when to take your 20 pip profit and run instead of waiting for 100 come with experience. That's a big part of the problem too. People aren't willing to put in the screen time to learn how a given currency pair behaves.
This is why so many fail. They want a holy grail system, or even a system that just works, but they don't realize that trading is subjective. Instincts have to be honed and toned.
It's a lot of work.
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