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EMA/MACD/ADX With Trend Strategy

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#1 Chris

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Posted 10 October 2013 - 12:42 PM

The indicators used for this strategy are: 4 period EMA, 10 period EMA (EMA = Exponential Moving Average), ADX 28 (Average Directional Movement Index) and MACD with settings 5, 10, 4. You can use any platform that has these indicators because none of them are custom MT4 indicators. I have attached an image of what it should look like after all the indicators are plotted on your charts, as well as what a winning trade looks like using strategy.

 

As you can see in my winning trade image all three conditions are fulfilled almost at the same time and price immediately starts to move south. There is no clear indication in the original strategy about which signal is the final confirmation or if all conditions must be met at the same time, but from what I saw, if all signals come within a short period of time, the trade has a higher win probability.

 

Some of you may have noticed in my image I am using a 5 minute chart and this is posted in 15 minute strategies... Well here is why I consider this a 15 minute strategy and not a 5 minute. If we are looking at a 5 minute chart, the option must expire at least in 15 minutes because maybe the next candle after the signal will go against my trade. But if we have three candles (one 15 minute candle contains three 5 minute candles), the trade has more time to come in my direction. If you find this strategy appealing, share your thoughts on the forum.

 

 

Call entry:

  1. Green (+DI) ADX line must be above the Red (-DI) ADX line
  2. EMA 4 must cross above EMA 10
  3. MACD must be above the zero level

 

Put entry:

  1. Red (-DI) ADX line must be above the Green (+DI) ADX line
  2. EMA 4 must cross below EMA 10
  3. MACD must be below the zero level

Attached Files


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#2 swede

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Posted 12 October 2013 - 02:14 AM

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#3 Chris

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Posted 12 October 2013 - 05:04 AM

Interesting method for short term bins....tried it for Euro today, only 2 decent trades late in session....not sure the Macd is set right as had late cross at one point and early cross on another....but going to do some experiments....ADX very accurate...good post and thank you....Swede

 

 

early_late_macd.jpg?noCache=1381543953

No problem! Glad to see you getting some use out of it!  :D



#4 swede

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Posted 15 October 2013 - 12:53 AM

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#5 Chris

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Posted 15 October 2013 - 12:01 PM

If you have followed any of my post, you will know I am convinced of the power of HCR and LCS...that is the Highest Close of Resistance and the Lowest close of Support in any time frame.   Those are the turning points where long bias changes to short and vice versa.   For swing trading I use those levels constantly from my daily time charts (sometimes 4 hour).  Trades last several days at times so few people follow the method since it is boring, not enough action, slow, etc. etc.    So, how to make it exciting?

 

I have stated many times to also watch on the lower time frames if trading such, as they produce many opportunities for bin trades, touch or no touch, etc.

Now combined with ADX on the 5 min chart, with HCR and LCS drawn from the hourly charts, and you have a powerful trading method worth more examination.    Here is Aud/Usd from Sunday night....two very nice examples of long entries...and the area of the HCR to stop you from continuing looking for calls.......settings on the ADX are 20 period on 5 min chart, with levels at 25 and 45.  Have a look .... ;)

 

audusdm5_adx.jpg?noCache=1381798304

 

and then here is a gold trade taken using only the ADX

 

 

xauusdm5_adx.jpg?noCache=1381798349

I think the most valuable piece to be gained from your methods is the fact you are not just utilizing a strategy that tells you when to trade... but a strategy that ALSO includes signals when NOT to trade. Avoiding the wrong trades is just as important as making the right trades if not even more so.



#6 swede

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Posted 15 October 2013 - 05:20 PM

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#7 swede

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Posted 15 October 2013 - 05:25 PM

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#8 swede

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Posted 15 October 2013 - 05:54 PM

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#9 swede

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Posted 15 October 2013 - 05:58 PM

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#10 Chris

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Posted 16 October 2013 - 12:01 PM

I agree the ADX definitely is a must for this one.



#11 Tonna444

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Posted 30 October 2013 - 02:23 AM

I am trying to use ADX but it is asking me for two values, I tried to enter ADX 28 as shown at the top but I think I am messing something up. Can anyone help how to apply the ADX correctly, have Skype too in case for better explanation. Thanks a lot!!



#12 swede

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Posted 30 October 2013 - 02:55 AM

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#13 Tonna444

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Posted 30 October 2013 - 10:47 AM

ok thx. This strategy is only applicable for 15mins strategies or I can try to apply to 10 and 30 minutes strategies. The reason why I am asking this is because I am finding very useful!!

Thanks for the help ;)



#14 swede

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Posted 30 October 2013 - 03:43 PM

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#15 virionx

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Posted 12 March 2014 - 02:08 PM

does this strat work on all currency pair of just the euro? thanks







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