Advanced system #3 (Neat entry: RSI + Full Stochastic)

Hi Edward,

One more quick question. Let's say we open a trade and it moves against us. To exit, you mention option 1 is when the stochastic lines cross below 30 (for downtrend). This could happen before the trade reaches our stop. Should we close the position (for a loss) ? I assume not, but wanted to check.

Thanks,

Andrew

Hi Edward,
Thanks for this great site, This system is wonderful I've trade it with different pairs (USD/NOK, CZK/JPY, CHF/HUF, CHF/PLN, CAD/PLN ETC) and the results are very good. I have two questions
- Do you have any suggestion for the exit point? I've using Fibonacci retracements to set TP levels , but sometimes it doesn't works very well.
- Do you have any suggestion to pyramiding once a position is profitable?

Thanks for your advice , and the best for you and your team

Walter

Hello again Edward,

I've been looking to follow your advice and incorporate the 9EMA method into this strategy in order to better time my point of entry. My question relates to my stop. Naturally, by waiting 2-3 days for a 9EMA cross, the most recent swing high/low will now be further away from the entry point (perhaps several hundred pips). Do I still use this as my stop ? Or can you recommend a better strategy (with a tighter stop) ?

Thanks,

Andrew

Hi Edward,

Great thoughtful reply. Thanks.
Do we have any other proven trading strategy on daily timeframe here?

Thx.
Tom

Hi Tom,

Yes, we should.
I would say that it is similar to putting check boxes: when Stoch signal is received, we check it and move on to the next condition (9 EMA) without ever looking back.

Besides, despite common believes, Stochastic readings in overbought zone doesn't mean that the trend is ending. In fact, it is the opposite - with Stoch in overbought zone the trend continues even stronger and may last for a long time before Stochastic actually exits the overbought zone.
So yes, we want to trade there.

I know why you're asking this question: because in the strategy rules I've advices to already look for exits when Stoch reaches 70. As practice shows it is not always the best way to exit, although it is a safe one (that's why I put it up initially).

Regards,
Edward

Hi Edward,

One question, for example we get a long entry signal, and after few days we get 9 EMA confimation, but this time stochastic is already above 70. Should we enter?

Thx.
Tom

Hi Edward,

Thank you for your reply and understanding my question.

Regards,
Tom

Hi Tom,

if you mean 9 EMA, then yes.
After you get a signal from 150 SMA, RSI, Stoch, it is normal to wait for 2-3 days or more for a candle to close above/below 9 EMA to enter a trade.

Regards,
Edward

Hi Edward,
Does this mean I will have to wait for that day for which candle closes above (for long) or below(for short) after entry signal(signal might have given signal 2-3 days before)?

Thx.
Tom

Thanks, Andrew

Happy trading!

Edward

Hi Edward - I just wanted to say a quick Thank You. I'll incorporate the 9 EMA method into my strategy. Thanks again - you're doing a great service to me and all the other newbie forex traders out there !

Andrew

Hi Jari,

I don't think you should make any adjustments. With different brokers you will have even different daily candles (Open, High, Close), which impacts the SMA calculation.

Each broker trading platform has its own server time zone (EST, GMT, GMT+1, GMT+2 and so on), based on that daily candles will form slightly differently from broker to broker.

Regards,
Edward

Hi Edward!

I have a question about SMA 150, with different brokers.
It seems to differ quite abit. In your chart /entry/ and SMA 150 is at about 1.305, right? When I look at my charts, I have SMA 150 at 1.314 and even at 1.338 with one broker.

In other words. Some times when price has already crossed SMA 150 with one broker, with some other broker price hasn't even touched the SMA 150 yet.

Should the "Shift" be adjusted with different brokers, or?

Thank!
BR,
Jari

Hi Andrew,

So, here is the screenshot:

You've done everything right.
- Price below 150 SMA,
- RSI visited an overbought area above 80,
- Stoch gave a cross above 70.
- Stop loss is placed correctly - just above the most recent swing high.

So, that's just a losing trade. However, 85 pips on a daily chart is a very good loss, if I can say so; the stop loss worked perfectly, keeping you away from larger losses, it was a good tight stop.

Now, what I'd like you to look at is: 9 EMA entry method, which can be perfectly combined with this strategy to keep us from entering too early.

There is 9 EMA in blue on the screenshot above.
As you can see, price never Closed below 9 EMA, which would not allow us to Short it (according to 9 EMA method).

So, with 9 EMA we wouldn't take any Short trades. Now price is above 150 SMA, it tells us to look for Long setups. Same thing: after you get all signals to go Long, try using 9 EMA to time your entry.

Best regards,
Edward

Thanks in advance Edward.

Andrew