Hektorian's triple EMA strategy

[hektorian]

Hi all,

I want to present my current system. Still demo trading it because it is fairly new one.

We all went for the holy grail, because it is fair to say that although trading is straight forwards business of pressing two buttons for buy or sell, we all get overwhelmed with the markets, that is why we are looking for the mathematical tools that would do the work for us, so when we see all green on the screen we buy and red we sell.

I am trying to incorporate in my trading approach all of it:

- Fundamentals - reading the news and trying to find the market sentiment, even if does not make sense, big data releases that would influence the market before and after.

- Charting - price structure, trend definition, Fibs, pivots, Supply and Demand, divergence and the king-Price Action.

What is about the strategy. The indicators that you will see are there to protect me, not to trade on the wrong and not to enter a trade prematurely.

I have always asked my self, which tools are used by the big players! So all the tools that you going to see are questionable in a sense, I trade them with the thought behind that they are probably not the once that the market makers are using, but as you going to see they do fairly good job giving be the picture of where the markets are trading.

The system works on all TFs but if you go to the small TFs trade with the 4H or D1. of course you can try to pick bottoms and tops through trading newly formed trend on 5 or 15 min. TF, but believe it does not worth the sitting and starring the screen all day long. I trade off 4H and D1, but I would zoom in the see what is happening on 15min.

So here are the tools:

1. The EMas

- 72 EMa. This is my fast EMA. Why I chose these settings? By playing around with the D1 charts I saw that the 12 EMA does fairly good job, and for some reason the market reacts of it. So the 72EMA on 4H is the 12 on D1

- 144 EMA comes from the Vegas system

- 233 EMA I took instead the 169 from the vegas system. The 144 and 233 are Fib number. Does this means that they are special, I don't think so. I just picked them up and started watch the way the market reacts of them.

The EMAs are my spine of the system. I NEVER trade against them. I do not trade a cross of them, but they are there to give me assessment of where the trend is.

2. Stochastics. Fairly straight forward indicator set on 14,3,5. The indicator is used for assessing if a pullback is oversold or overbought. We all know that the oscillators are doing great job used for showing those conditions. I NEVER use the stochs, for trying to pick tops and bottoms. I use it also as divergence tool.

3. Cross EMA signal though arrow, set at 12/1 and 12/1. Why I use it? As all know in any moment the market goes through many trends. There can be counter trend on 4H but there will be a trend on 15, and counter trend on 5min. It is big puzzle that finds it's self in different dimensions. As I am trading off 4H I really do not want to zoom in on smaller TFs to asses if the current counter trend against the prevailing 4H trend has ended. So The arrow is there to help me in that matter.

4. Supply and demand indicator is there to give rough idea where I can expect a place where the market will react from. If you add some fib studies or W1 and M1 pivot levels you will find the sweets spots. But I never use these pivot levels as counter trend trade.

5. Lastly, I use on indicator found in this forum, called Histogram. I see that it repaints but not that badly. The reason I use is to filter out the noise that can happen during congestion. I use it is as divergence tool and as yield tool of the arrow cross signal. I saw that it repaints but so far using it in real time and trade this indicator does great job. It gives exactly what I need. A bit late entry.

So how I am trading the EMAs, as they are the spine of my system. You have to decide for your self if you will have as primary TF the D1 or 4H. If you will play around different TFs you will notice how fairly well the market reacts of them. As long as the market makes new highs and bounces of the 72EMA the trend is pretty strong. Sometimes the market will have deeper retracement towards the 144 or 233 but as long as the market does not start to find rejection around the 72 EMA we should not worry. But if we see that market stalls at the 72 EMA and we are getting overbought or oversold conditions you have to start to search for reasons why the market might have started to reverse. At this stage my bias is neutral. But once the market is bellow the three EMAs I am with short bias and above the EMAs long bias. If you plot my system on E/J charts you will see what I am talking about. Again this is not exacts science so rejection of 72 EMa might be around the EMA not exactly to the pip.

Going to post some charts and the system, so you can all see what I am trading off. Suggestions are welcomes, if I have helped someone with one of my ideas I will be more than happy.

So here is a future trade that I am waiting to trade. Short U/J

As you can see the price is under the long term EMAS but above the 72. I am nor worried because if there is rejection of the 72 EMA then I might starting thinking of changing my bias. I would asses the bias 50/50, but having in mind overbought conditions, divergence and possible double top, I will short the pair when I get my arrow and the Histogram turns red. That way I think I have chance the catch some impulsive down move and will give enough room to book some pips or to move my SL ate BE before the buyers will enter at some lower levels and turn this pair north.

Also we have intact trend definition. LL and LH. I do not count the LH at the double bottom.

So again. Why I have the histogram on and the arrow, so that they will give me entry after the the demand at the present level is absorbed and the sellers have gained control. Some traders will see it as double top, which maybe the fact but we will know it for sure after the market has turned around and went south. Until then it is POSSIBLE double top. But I am not playing it as long as I do not get my arrow and histogram in red.

Another trade I am waiting for is to short cable

Although the Price is above the EMA there is no rejection of them. So my bias is still short. Again, I am trusting my arrow and the histogram to keep me from premature shorting, because so far the price action that these two indicators are calculating shows that the market is still bullish at the present time.

that is all for now. I will keep posting charts of these two trades if such occurs!

greetings