Moving Average Crossover FIBOnacci
I like to make things super simple. One of the most simple mechanical trading systems out there are dual moving average crossovers. Entry is when xxMA crosses yyMA and exit the trade when yyMA recross xxMA. Simple right? Well, Macfibo is that kind of system.. However, what makes this system a bit different and unique from any pure moving average crossover system (entry and profit taking are all based on moving average crossovers) is it’s ability to objectively to pick a highly probable target even before a “opposite crossover” in which sometimes could lose you some pips, and sometimes turn your winning trade into a losing one. Macfibo combines the simplicity of dual moving average crossovers technique with Fibonacci price projections to pick price targets.
Let me tell you now, it is not 100% (there is no 85% system, nevermind 100%.. if there is, I’d love to hear it heheh), well you can be the judge of it anyway. What I am about to share is is the rawest and simplest version of the system. You are more than welcome to criticise, comment, test, share, trade (in your own risk) and by all means, try to improve it. Thanks.
*Due to limited number of images I can post, alternatively, you can download the attached PDF file to read how the system works. Thanks.
very simple strategy...i have 3 questions for you
1. what would be the initial SL?
2. would you only consider entering a trade after 5ema/20sma crossover?
3. once 5ema crosses below 8sma, we close the trade, would you take a new trade when 5ema crosses above 8sma as long as candle close price is above 20sma?
EU on 4HR chart attached
Thank you for spending your time to check the system and plan to test it.
1. It is pretty complicated and I don't want to overcomplicate things for now, but I normally put SL depending on the price action. Very often I don't put SL when I enter a trade as my 'SL' or cut-loss mechanism all dependent on the 5ema x 8sma crossover. But in some occasions, I will put SL like how I put SL in trading a reversal after a clear reversal signal/pattern such as double bottom, bullish engulfing candle, doji etc etc.. For now, 5ema x 8sma is the objective mechanism for determining a failed Macfibo trade.
2. If you mean entering a trade before the 5ema/20sma crossover, No.
3. Yes, but that requires more analysis such as S/R and price action, which I will get into soon but for now I'd like to make things simple and super objective.
How long have you traded this system. Based on the eurusd chart today what is your objective?
A. Price has reached (more or less, not necessarily exactly, when price merely touches it 8-10 pips a level, I normally consider it as 'already hit') 261.8. We are in a clear up-trend, but it is question of wether the price is ready to correct itself. 5ema is below 8sma so we are in the wrong side of 'bullish trend'. Price always (more than not) returns to test 'equilibrium' MA that is 20sma.
B. What I am looking now is for price to test 20MA and see what happens next. If price bounces it, it will be a Macfibo Re-entry (haven't covered or explained it) and will TP at 261.8 Macfibo.
C. If there is a bearish activation, I will trade it and target at 161.8. Yesterday's low is a level needs to be monitored. The grey box is probable range that EURUSD might 'perform' today.
Since I could remember (forum member LSs could vouch for that). What I am sharing is the most basic version of the system.
There is similar system here with some EAs developed and tested:
And yes, it is necessary to trade just to understand advantages and disadvantages.
because it is just a theory without trading sorry.
Thank you for sharing. However, where is the fibonacci projection?
Similar, not same (no projection).
But I traded it to be a system posting the statements on the forum.
From theory to systm is long way ...
I am talking about it because you uploaded this thread to Manual Trading Systems section of the forum.
Noted. I was scrolling through to find the fibonacci projection system. Well, if you can find some ways to improve (if you are planning to anyway, if not, thanks for reading) Macfibo system, by all means. By the way, I've traded this system live since 2008 but I don't think I am obliged to post my account statements here because this system is free (I am not selling it) and it is open for testing, modifications, whichever traders seems want to do with it. I am just sharing it for others to try and who knows it gives them ideas in theiir current system.
Your FibEma system is very simple and can be effective. Congrats on that. Cheers.
If we are talking about EURUSD with 8 EMA crossing 20 EMA (without fibo and without 3rd indicator) so it is for H4:
Few trades only since 1st of january 2012 but it is profitable.
D1 timeframe (8/20 ema crossing only):
1 trade is open and still did not close yet. But profitable.
Same D1 timeframe for half a year (8/20 ema crossing) - 3 trades only and profitable.
It was 8/20 emal crossing.
So, it will not trade often.
With 3rd indicator + your fibonacci projection - it will not trade often and it will be profitable too.
It is good system but one disadvantage only: it is not trading often for H4 and D1 timeframes.
I spent 3 years for those systems developing and trading
Your variation is good but how to make it to trade more often? It may be the problem ...