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05/07/18
11:46
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Originally posted by sharks37
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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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Don’t you ever leave this forum Shark’s.
There are so many variables to consider so good luck.
Another issue to consider is Resistance. As I would call myself a PASR pullback trader, the one chart I don’t post on M5 is my working chart. Here I map all recent H4 resistance zones on my charts and avoid opening a position if price is about to run into one of these zones. I consider the H4 on M5 the same as the Monthly line on H4. I wait till price has broken through this zone and see if there is any reaction.
That’s only for first trade.