Forex Trading 2018- TA/FA- Setups and discussion

Originally posted by sharks37 ↑

Martin, maybe we can test Rick 's M5 strategy another way.

As posted on the weekend, I am doing some work to try and code the ForexSignals scalping strategy into an EA. I think there are enough similarities between that strategy and Rick's M5 strategy that I can hopefully test a variant of the EA using Rick's parameters, and see how it runs.

I have reviewed the video and have defined the rules as far as I can make them unambiguous (see below), so my next step is to convert those rules into code that I can test. I am aiming to write the code by this weekend so I can validate that it works properly, before commencing some backtesting. I intend to post the progress and results here for anyone who is interested.

The ForexSignals scalping strategy is a 2-timeframe strategy:

H1 anchor timeframe with 8 & 21 EMAs. The anchor timeframe is used to identify the trade direction.
M5 trading timeframe with 8, 13 & 21 EMAs. The trading timeframe is used for trade entry and exit signals.

Trading rules (rules for short trades shown, opposite for long):

Valid H1 conditions for a short trade are:
IF the 8 EMA < the 21 EMA
AND IF price < the 8 EMA
AND IF price does not close > the 21 EMA
Then we can look for valid entry conditions on the M5

Valid conditions for a short entry are:
IF the 8 EMA < the 13 EMA
AND IF the 13 EMA < the 21 EMA
AND IF price < the 8 EMA
THEN IF price breaks the 8 EMA but not the 13 EMA or 21 EMA
SET the bar that breaks the 8 EMA as the trigger bar
SET a SELL STOP = the lowest low of the 5 bars before the trigger bar minus 3 pips
SET the STOP LOSS = the trigger bar high plus 3 pips
SET R = the STOP LOSS level minus the SELL STOP level
SET TP1 for 50% of position = SELL STOP level minus 1R
SET TP2 for remaining 50% of position = SELL STOP level minus 2R
IF TP1 is hit move the STOP LOSS for the remaining 50% of position to BREAKEVEN

Variables to test:

Other EMA combinations, eg. 20,72,200
Other timeframe combinations, eg. H4 & M5
Other restrictions on price bar position vs EMA’s (eg. price breaking 8 EMA plus 13 EMA, etc)
Time of day operating window
TRAILING STOP LOSS as suggested in ForexSignals video (eg. highest high of last 3 bars for a short trade)
Other rules suggested by HC contributors

Cheers, Sharks

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Somehow have to find the best instrument to do this with. I think commodities (I'm thinking oil) could produce strong results but thats just thinking out loud.

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