Developing a system #19 (minimum 40 pips a day)

Ray and Edward - Seems to be some confusion , among some of the participants , here as

to exactly when to enter a trade .

Do you buy , or sell , when the the 2 EMA 's are separated by 8 pips or more , and then enter AGAIN on a

RETRACE to 7 pips or less separating the 2 Ema 's , ( or reaching the EMA 10 line . ) ??

In other words , do you enter ONLY on the RETRACE ??

Paul

Raymond and /or Edward ,

Hey , guys I am confused .

Ray, on Oct .19 you say retrace at least 7 pips , but on Oct. 21 , you say retrace at least 5 pips ????

Also , guys , please clarify rule about retracing to EMA 26 within 8 candles ! Thanks .

Stewart

Looks okay , Raymond , but can you give us some chart examples of some actual trades ?

Clyde

This is directed to Edward , User , and Manus 168 -- Obviously you 3 " get it "

I give up . Like some others here , I do not understand Raymond's explanation of the rules for his # 19 , 40 pips system , and I am not getting good results at all . Something is missing , ( probably my brain )

Can you three offer YOUR explanation of Ray's rules , AND put up a CHART of an actual trade? PLEASE !

Gratefully ,

Julio

Hi Paul, Stewart, Julio, Clyde and everyone else,

I've reviewed and re-read the system, and here is my conclusion:

1. I favor Clint's version of the system (comment #2) for its simplicity, although it differs from Raymond's rules.

2. Regarding Raymond's rules, they're a bit more complex, but at the same time, have got a number of useful aspects which allow more flexibility while trading. Here is how I would summarise it:

Prepare to Buy when 10EMA crosses the 26EMA upwards and the EMA difference is 8 pips or greater.
Prepare to Sell When the 10EMA crosses the 26EMA downwards and the EMA difference is 8 pips or greater.

Now, you don't Buy or Sell right after the EMAs crossover and as soon as the difference in between EMAs reaches 8 pips, but rather employ some patience, because price is going to retrace soon - that's where you want to enter - on the retracement that comes after a crossover.

For example, EMAs cross each other and the difference grows to over 8 pips and continues to grow up to 19 pips. We wait, no entry. Now, the price starts to retrace back: as soon as it makes 7 pips down (19-7=12), you can jump in a trade.
(From myself: you can enter immediately, or you can "trail the entry" the way I do when I look to enter on a retracement. See the image below)

The idea is on a downward retracemet place a Buy stop above the last closed candle.
If the entry is not filled, trail it down to the next closed candle, and so on until you get filled.

Back to Raymond's rules. Another entry opportunity is when 2 EMAs cross and price later retraces to 10 EMA. How it works in numbers? Let's take the same example with EMAs crossing and the difference growing to over 8 pips and continuing to grow up to 19 pips. At that point, price will be trading above 10 EMA, right? But how far from 10 EMA will it be trading? Could be any amount of pips: 3,4,5 pips etc, either way, the idea is that price may need only 5 pips to retrace back to 10 EMA, and those traders who wait for a 7 pip retracement may never see it, because 10 EMA will act as a support/resistance level and price will bounce back from it.
Hope now the 10 EMA retracement makes sense.
At the same time Raymond warns that: with 10 EMA retracement rule, your entry signal bar should be at least 10 pips away from 26 EMA.

The rest is clear:

TIME FRAME: 5 minutes
CURRENCY PAIR: GBPJPY
TAKE PROFIT: during Asian session TP is 20 PIPS
During other sessions TP is 30 PIPS
STOP LOSS: 40 PIPS (I personally believe that it is too wide and should be adjusted to 20 pips at most. A smaller Stop is not recommended for GBPJPY due to its volatile nature, but if you try other pairs, you can set smaller stops to get a better risk : reward)

Now, lets move to Raymond rules that say about stop adjustments with a retracement to 26 EMA within 8 candles.
My understanding is that if, after you entered a trade, price retraces back to 26 EMA too fast - within 8 candles for our rules, it is probably not a good sign, so you should be looking to limit risks. Therefore, if the above condition is true, tighten your initial SL (which is 40 pips by Raymond) to 15-20 pips and, if possible, look to get out at break even (or set SL to break even) and watch as the trade unfolds.

Hope you find it useful.

Happy trading to all!

Best regards,
Edward

This same method is for sale on ebay
It is sold by a guy who has a website forexfinder.com

User -

Where on forexfinder.com did you find this system?

Paul