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8# Simple Moving averege and MACD Trading System

Submit by janus trader 23/03/2011

 

Setup:

100 Simple Moving Average

Damiani Volatmeter

MACD - 15,26,9

4 hour chart - EURCHF

The 100 Simple Moving Average serves as a support/resistance line as it is known to be used by major banks and financial institutions, a self-fulfilling prophecy, so to say.

 

System Rules

Long: Take a long trade when price closes above 100 SMA and MACD histogramgoes above 0 line.

Short: Take a short trade when price closes below the 100 SMA and MACD goes below 0.

Re-entry: When the price, once has given a long or short signal, retraces back to the 100 SMA, re-enter the direction you went the first time. It is recommended to do it the first 2

times the price hits the 100 SMA and keep a watch thereafter.

Retrace entry: When a bar is over 100 pips, wait for a retracement to occur towards the 100 SMA line and then enter. This will save you from unnecessary draw down.

Exit rule

Scaling: I personally take 3 positions per trade. I set my first TP to 40, 2nd TP to 70 and let the third position run with Stoploss at breakeven.

As an example, once my trade hits the first target, I moved the second position to breakeven and leave the third as it is. When the 2nd position is hit, I move the 3rd to breakeven, giving the trade enough room to breathe. I then look for the price to come

back, to add to the position, if it is open. At times, when price comes back to the 100 SMA, I get stopped out at breakeven, giving me 100 pips on 2 positions.

This is a trend following system, and has it's bad days. To avoid getting trapped in a range, I use the Volatmeter indicator. It is, so far the best indicator I have seen that helps

detect a ranging a trending market. I will try and attach a couple snapshots of past trades, so the whole idea becomes clear.

The blue box is the main entry and the yellow, you can see, is the re-entry.

Attached Images


This is the continuation of the first re-entry. Notice a second re-entry. There is a third box I have drawn. It is a false signal.

Note: I take only one position while trading re-entries.

Attached Images

 

 

 

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Comments: 1
  • #1

    Bailey (Tuesday, 25 February 2020 20:49)

    hi I've back tested your strategy and I'm finding my stop loss is to tight and was wondering your take on that and was also wondering how you use the Damiani volameter as I'm using TradingView for alaysis and am using a (RS) Damiani voltmeter V0 not sure if this is the right one