Momentum thrust

[jjames]

Oke guys i wanna share a trading sytem mechinical 1 i use in my trading on dailly basis.

 

The system is simple and the rulles aswell i know many of you guys strugle with entries but that really is not the most important this system i am trading next to other tools on my live account.

 

Oke what is the method.

 

you place on your chart a 20 exponential moving average apply to the close.

 

next is a rsi set to 21

 

You add levels to the rsi 70 30 and 50 the 50 is the key.

 

I dont pay really much attention to the overbought oversold zones only divergences i take care of.

 

Oke what you put more on your chart i have roundnrs because price likes them. for exits or even entries when is see a momentum thrust through it.

 

Oke some more rulles then whe get more in detail to the method

 

-Only trade active sessions or days so no late fridays or late assia session or lunchtimes new york or london hope you get the picture.

 

-Timeframe is the chose of the trader it works on all.

- it is a trendfollowing method so no countertrades!!

-Stops 1.5 x the atr14.

-Profits are different because exits are harder most of the time i take the next round nr but i trail my trades also this is timeframe indenpendent when trading 5 min you need to aim for 10 or so when trading the 15 20 ,60 around 60 a 80 all timeframe indenpendent.

-Verry important is to protect or capital so always play defensive so trail stop move to break even scale out.

-When getting better you can scale in (But only on larger timeframes scaling in can be dangerous if you don't know what you doing.

-Also if you get good at managing trades you can hold on tho the trades until rsi get exhausted best in strong trending markets.

 

 

Entries:

 

Oke here the most exited where most of you probally waited for hope not.

 

-Price show momentum bar through the 20 exponential moving average and the rsi cross the 50.

 

Thats it.

 

Oke what is a momentum bar momentum bars are those bigger bars with power.

 

For reentries you can when rsi is still above 50 the break of the highs for example when price come in a little range again after some move (distribution)

 

Guys this is a verry simple method what you can trade profitable win ratio is around the 68% on a live account.

 

 

Oke hope some of you have something on this.

 

 

Keep it simple

 

 

JJ

Edited March 18, 2011 by jjames

[soundfx]

Thanks for sharing jjames.

 

I can tell from your post that you're a regular trader and have built up this system after a good deal of time in the markets which makes it all the more valuable. Momentum trading is one of the most consistently reliable trading methods I've found as you're always in with the flow of the market when you enter. It's so crucial in trading not to try and swim against the tide because you always end up drowning ;)

 

All we need to do now is to wait for the usual "Who can make this system into an EA?" question lol.

[nikwoof]

Thanks James:

 

How do you plot on the chart the "Stops at 1.5 x the atr14"? How do you track the stops?

 

Thanks, :)

[jjames]

lets say the atr 14 is 24 then it is 1.5 x 23 = 36

[jjames]

I got some pm's from some people regarding stops etc. It is verry important with every strategy you use you give your stops some room. Especially in volatille markets some people have trouble with that to be honiest i am not a indicator fan when i trade i use this strategy myself but the most i do in my trading is support and ressistance. The only indicator i like is the atr because that1 tells us something. For example if you set the atr to 52 dailly you have maybe something like this 162 for eu then lets say during the day you wanna enter a trade if you trade for example intraday. then lets say i wanna buy at support or i have a system what gives me a signal then i always first check the atr lets say the atr is that point @ 140 then it is for me not worth to take the trade because i know that i doesnt give me a good reward if it contineus my direction.

 

Oke here something else lets say whe take the weekly for example and check the atr of the year so you choose how many weeks a year have and whe do 1 for 5 and 1 for 1 lets say the a currency is strong trending. whe always like to be in that but here is the thing patience will give you the better price because when whe had a strong upmove the atr will probally be exhausted of course this is also not always like this. So what is the best then whe wait for a retracment day and then whe start to look for a signal (buy of support) or signal from a system. With the main trend. I know many have the failure to trade aigainst the trend i had the same i would say take 1 timeframe as your anker. Lets say the dailly for intraday. Then only look for signals in direction of that timeframe oke how do whe know the trend has been changed. check google for market structure point structure low structure high. Oke hope this helps for some.

 

JJ