Scalping system #6 (EMA Bands)

Hi Edward -

I have seen the term " Upspike " ( in reference to a bullish candle) . Does this mean a big candle body , or the upper part of any candle b

body regardless of its size , or is it referring to the candle's shadow ??

Thanks ,
Fraser

Hi Khurram,

As per original strategy rules we need the whole yellow group to cross the red line.
But, we can add a rule to help us get in a trade earlier:
- if the whole yellow group has crosses the green group and the first two yellow MAs already crossing the red 55 EMA, then if price closes on the other side of 55 EMA, we enter a trade.

Do we have Forum? Yes, of course, please visit:
http://forums.forex-strategies-revealed.com/

Regards,
Edward

Edward

In this strategy do we wait for the whole group of yellow ema's to cross 55 ema, or even the first 2-3 would suffice the entry signal. Actually all the ema's appear in one straight vertical edge, and by the time we wait for the whole group to cross, the price already moves appreciately.

Please comment

Also do you have any forum where we can share live trading plans. Actually most of your strategies are okay, but its the discipline which one can't maintain and eventually loses. So if we all share live trading plans, we can help others from mis-interpretation of the strategies or slipping out of discipline.

Thanks

Khurram

hi, i from malaysia, somewhere in south east asia...

i use this method and find a quite interset thing.
i found that the at time 17:00 malaysia time(GMT +8), if this system show the trend will go up, then i long that pair, normally the trend will long lasting for 3 hours, and it's make 40-70 pips to me constantly. if u want make profit, just need to adjust your stop loss accordingly. by the way i'm using 5 min chart and 25 pips stop loss.

Hello Edward -

I can ' t find the words to properly thank you for going to the trouble to give me such a detailed and

informative answer to my question. It was a big help in explaining a topic that , I know , a lot of traders

never learn about until they experience big losses . I THINK SOME OTHER PARTICIPANTS ON THIS WEB SITE

WILL BENEFIT AS WELL . Thank you so much !

Best Regards ,
George

Hi George,

Leverage levels, such as offered by Oanda carry very little to no risk to a smart trader, I'll explain why below.

That's good that you are going to start with a small account size: you'll learn about your new broker
and you will risk little money to get first experience.

What I suggest to review is the pip value you are planning to trade with. You see, $5 per pip would be too expensive in case a trade turns into a loser. Calculate it: only -20 pips each $5 value would cost you -$100 dollars, which is 1/3 of the initial investment.
Roughly -60 pips and you are out of the game...

I'd suggest looking at most at 50 cents per pip for the first few months. (In case you encounter a streak of losses, 10-20 cents per pip is advised till the balance is recovered in full).

Leverage won't hurt you if you know what you are doing.
We know that the higher the leverage, the more money one can trade and the lower is the margin requirement. Right.

Now, you don't want to trade large positions for the obvious reason that you don't have that much money to cover the risks involved in such trading, but you do need a lower margin, because the lower the margin, the further you are from getting a margin call.

Solution for Forex mini account holders is to take the highest leverage, but trade mini lots. Trading few mini lots at once is fine as long as you know your limits and manage it right.

Why everyone then is warned about risks that come with leveraged accounts. Who should be concerned:

a) High leverage punishes those who try to trade large positions while having small accounts.
.. or extra large positions while having large accounts.

b) High leverage also punishes those who doesn't apply proper money management and/or never place stops loss orders. There will be no shield to protect investments of such traders in case serious losses start to emerge.

To illustrate this, imagine that a holder of a regular Forex account bought several large lots anticipating that the market would rise, but for some reason forgot or postponed placing a Stop order. The market traded quietly for some time but then suddenly fell like rock 600 pips down while our trader was away. The market continues to fall, what will happen to trader's account?

If a trader had high leverage then his low margin requirements would postpone a margin call till some extent, but once it's triggered, almost nothing will be left from the original investment.

If a trader had a low leverage and thus higher margin requirements, in a bad situation a margin call would be triggered earlier and trading positions would be closed leaving some capital on the account.

Either way we return to an improper money management that created problems for our trader and cost him money.

So, here comes the topic of money management and those 2% of the account balance one can risk in each trade. Here you choose your own comfort level.

If to calculate it according to a planned investment:
$300 * 2% = $6 to risk in each trade.

If pip value is going to be 50 cents, then you may risk $6 / $0.5 = 12 pips. Means -12 pips and you must exit a trade.
Depending on your own risk tolerance and the strategy you are going to use these figures can be adjusted. I use 4%, for example.

Hope this helps,
Happy trading!

Edward

Edward :

When I set up a live account with Oanda , I want to be very conservative . With a modest $ 300.00 account and going for a Pip value of

$ 5.00 , what Leverage level would you suggest ? I am aware of the dangers of high Leverage and don 't want to risk more than 2 % of

my account on any one trade .

Best regards ,

George

Thanks again Edward . I was hoping that was the case .

Regards ,
George

Hi George,

In Oanda's platform studies are applied to Close by default.

Regards,
Edward

Edward-

I use the Oanda trading platform and chart also . When I click on " Add Study " , and the EMA, my only choice is to type in the EMA number.
How do I choose " Close ' ?

Regards

George

Hi Paul,
All EMAs should be set on Close.

Regards,
Edward

All of the EMA's are they on close, open, high low? Where do you set them at?Thanks,
Paul

Thank you for sharing with us the results of your research!
It is encouraging.

Regards,
Edward

Edward-

I did an extensive internet search on Alan Hull and Daryl Guppy. The comments from traders were overwhelmingly favorable . Many of them

said they had been using some variation of Multiple EMA's for several years , a good Testimonial in itself . Hull's EMA's are exactly the same as Frank Tenerife's , by the way .

Fraser

Yes, that's different approaches, test them and see which work best for you.

Regards,
Edward