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Greeting All,


Red Light Green Light

I have been using this system now for 6 months. It has allowed me to enjoy the feeling of positive gains in my trading instead of the many losses I was getting. The system started with just the Moving Average (MA) indicators and following price action. I added other indicators to help hedge my trading by showing me when a possible trend reversal or a breakout was going to occur. After much testing, I found success by keeping it simple. I paired up EMA with ADX.

The system works on any pair and time frame (TF) but for this submission, I have focused on EURUSD / M15. The M15 TF provided more trading opportunities than a longer TF. It was also less volatile than the shorter TFs.

The system uses EMA with a period of 9. I wanted a MA that would be more responsive to recent price action. The two directional indicators (DI+ & DI-) of ADX are used in conjunction with EMA to establish your Entry and Exit points.

Chart Setup
Chart: EURUSD

TF: 15 minute
Indicators: EMA9, ADX14, ATR14
Set a level of 20 on ADX14

Entry Rules
Long Entry:
Price is coming up from below EMA9. Candle Closes above EMA9
ADX DI+ > 20 AND ADX DI+ > ADX DI-

Short Entry:
Price is coming down from above EMA9. Candle Closes below EMA9
ADX DI- > 20 AND ADX DI- > ADX DI+

Exit Rules
Long Exit:
Candle Closes below EMA 9
-or-
ADX 14 DI+ < ADX 14 DI-

Short Exit:
Candle Closes above EMA 9
-or-
ADX 14 DI- < ADX 14 DI+

Stop Loss
Set your Stop Loss to the value of ATR14 at the time of the order placement.

Trailing Stop
If using a Trailing Stop, set it also to ATR14.

Take Profit
Set your Take Profit to 1.5 to 2 times ATR14.

Money Management
Risk = 2% of Free Margin

Dear vincejg327
at first i wanna say a loud thank you for sharing your system with us, really it looks promising, and i uploaded it in my chart, lets see how far can i run in demo with this, and the main reason of mine reply is : i personally like to trade on longer time frame specially 4H, so can i use it on 4H ? if so then will u suggest to change any setting or just stay with the basic parameter as u said earlier ?
Thanks a lot

@cda08 - When you change Time Frames (TF), the ATR14 values will change. This would change your Stop Loss/Take Profit/Trailing Stop values in line with the longer TF. Other than that, the Entry and Exit rules still apply. However, you are welcome to test it out and made any changes that would fit the way you like to trade. Let me know what you find out.

Happy Trading to All!

A little clarification concerning ATR14 for those unsure on how to use it to get your Stop Loss value.

The indicator reads out in decimal format (i.e.: 0.0019 => 19 PIPS). I would take this and subtract it from the Bid Price to get my Stop Loss on a Long trade. On a Short trade, I would add it to the Ask price.

Happy Trading!