KXRTrading123

Simple Trading Strategy - 30min Timeframe

FX:USDCAD   U.S. Dollar / Canadian Dollar
A friend asked me to create a setup that he could have on his phone and he could get alerts on potential trades. So this is what I came up with a slight modification of a system I have on my desktop. 5/21 Cross with a couple Friends!

Setup:
1) 30min Chart Only
2) 5EMA and 21 EMA
2a) I added a ribbon to make it easier to see on a phone. 7,9,11,13,15,17,19 EMA's
3) MACD - Set at 3/26/1
4) RSI set to 10

Sell Entry Rules:
1) 5 must cross below 21 on a bar close
2) The Price Bar must close below the the 21EMA
3) MACD must be less 0
4) RSI needs to be greater than 30 (I like it better when it is greater than 35)
5) GO SHORT on the open of the very next bar where all conditions are met.
6) Set a TAKE PROFIT for the first 100pips
7) Put your initial stop above the must recent trade high bar. Once it moves in your direction trail your stop according to your money management goals.
8) Close Trade if a BUY SETUP is initiated.

BUY Entry - Reverse of Sell.

Observations - you very seldom will get more than 100-110pips trades seem to average in the 45-60 pips. The 30min timeframe gives you good moves but as with all trend systems choppy sideways trade can cause churn.

Aggressive Mode is to take every trade. Conservative mode is to add a 200 SMA to the chart and when the 5EMA and 21EMA are below only take the SELLS and vis-a-vis only take the BUYS. As the 5/21/200 converge wait for the next trend confirmation. This Conservative approach follows general Swing Trading Theory with Timeframe Trend.

Again a simple approach for those that may only have a few moments a day to do any homework. If you add alerts in Trading View you can receive a text message when the 5EMA crosses the 21EMA - this will help you from always checking your phone. Note: the alert will come based on current price remember the rules that the action takes place at the close of the bar.

If anyone has other simple setups I would love to see them.

Best Regards,
Konrad.
Comment: Just a follow up to this strategy. the trade has fallen short of the first 100pips at 99, but it is a good example of the BUY entry. Stops could of easily been moved up along the price path. This would of fallen under the category of an Aggressive BUY, because the 5EMA and 21EMA were below the 200SMA. Happy Trading.
snapshot
Hello KXRTrading123,

Another question please, I am still trying a few back testing methods.

Can you explain what you mean by: "As the 5/21/200 converge wait for the next trend confirmation." Are you stating once the 5/21/200 start approaching each other, do not take the buy and sell signal and wait for a distance between the ma, atleast until 5 and 21 is far from the 200?

Thanks
Reply
@goodoboy, Yes. Normally when you see multi-timeframe averages come to a point it can either act as a strong point where trend consolidates and then continues or your get a point that a change in trend will materialize. You can see both these kinds of actions in intraday, daily, weekly, monthly data.
Reply
Hello @KXRTrading123 ,

I am still manually back testing the strategy and taking some notes as I go.

Another questions please. I am curious to why the MACD settings (which is tracking the 3 fast and 26 slow EMAs) is close to the EMAs of 5 and 21? I would think we want the MCAD settings a bit bigger then the upper EMAs settings.

Thanks,
Reply
@goodoboy, This is what I use. The key is give you 3 points of review. If you go for a longer period then you may not get the momentum of the continuation. You can change however you see fit.
Reply
goodoboy KXRTrading123
@KXRTrading123, thank you.

I understand now. It's the momeutm side of the macd the strategy takes advantage of. I am testing the Conservative and Aggressive approch of the strategy. Thanks.
Reply
@KXRTrading123

Hello,

Another comment or question. I like trailing a winner as much as possible to get big gains which will keep my R:R high as possible. I am trailing with a 20 tick stop on NQ and CL and its looking pretty good.

I am not familiar with pips. You state take profit on 100 pips. What does this equate to as far as ticks profit target consider I trader NQ and CL which trend nicely at time?

Thank you kindly
Reply
@goodoboy, Pips in Fore = Ticks in Futures
Reply
I love it!! My situation is similiar. Returning to work full time, all I have is my phone to monitor charts.

Question :
What so you mean by place stop above ( if short) recent high bar? Can you give an example please?
Thank you. I love the simple strategy
Reply
@goodoboy, First, Thank you. Once you get a signal, look for the most recent swing high and place your stop just above there. I like to count back 3 bars from the signal and then look for the most recent swing point. Note that in sharp moving markets you to make sure your stop is in a point that is within your tolerable risk zone.
Reply
goodoboy KXRTrading123
@KXRTrading123,

Thank you so much replying to me. I appreciate the effort and time.

I like the strategy cause its easy to visualize and back test. I just want to understand it for the most part as I manual back test. Maybe I can modify a few things as I back test per my liking. I am still learning so this a good strategy for me to manual back test and be comfortable with.

I need help with understanding the indicators, as I still learning them a bit and how to apply them

1. I am not sure why the MACD is needed because when the MACD signal cross above/below the 0, I notice so those the EMAs cross occur as well. I am trying to understand the purpose of the MACD for this strategy, I could be wrong, but I thought the MACD was to further confirm the trend after the EMA cross occurs? Can you please clarify for me the MACD purpose for this strategy. Here is some examples of the MACD cross occuring when the EMA cross occurs. http://prntscr.com/haldf6


2. Can you please confirm a few long trades for me per the strategy? The green is the buy signal and the red is where stop loss would be placed. http://prntscr.com/haleir And yes my stop loss will Always be within my tolerance level. Thanks,

3. I like your conservative approach of adding the 200 SMA and only buy when other EMAs is above 200 SMA, and sell when other EMAs is below 200 SMA. What is the significance of the 200 SMA and its importance? Is this to make sure the trade is follow the trend and avoid some chop chop or whipsaw?

Thank you kindly for the help and time.
Reply
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