SMA Angle 5 min intraday

SMA Angle 5 min intraday trading

1. THE CHART SETUP:

1.1 Charts & pairs:

1.1.1 5 min candle chart

1.1.2 The following 4 pairs:

· EUR$

· GBP$

· JPY$

· EURJPY

1.2 Indicators on chart itself:

1.2.1 EMA = 10 & 21

1.2.2 SMA = 50

1.3 SMAangle window:

1.3.1 SMAangle indicator

1.3.2 21 EMA based on first indicator data overlaying this indicator (see Attachment A)

1.3.3 Put the following horizontal lines on the SMAangle indicator:

· 0.1, & -0.1, on the EURU$, GBPU$ & U$JPY pairs

· 0.15 & -0.15 on the EURJPY pair

· 0.4 & -0.4 on all 4 pairs

1.4 ADX window:

1.4.1 Open a ADX indicator in separate window set @ 13

1.4.2 Overlay it with an lsma 3 indicator from HelloDollie safe pips thread

2. THE TRADE CRITERIA:

Criterion 1: 50SMA angle to be more that 20 degree

2.1.1 It is a subjective measurement and it is not an accurate measurement.

2.1.2 It was used in the beginning of the thread) and we changed late to the 21MA on the

SMAangle indicator as a guide (as explained in Criterion 2).

2.1.3 But it is still very applicable for this system because the angle of the 50MA is the

main principle behind the system

Criterion 2: 21EMA on SMAangle indicator to cross the 0.1 or -0.1/0.15 or -0.15 line.

2.2.1 The area between the 0.1 and -0.1 lines is called the no-trade zone.

2.2.2 No trades to be taken if 21MA is in the no-trade zone.

Criterion 3: The price to pull back through 10EMA to 21EMA

2.3.1 The area between 10MA & 21MA is called the fire or war zone

2.3.2 In the war zone is where the action is – you’ll enter your trade

2.4 Criterion 4: The price should stay on the correct side of the small resistance/support

line

2.4.1 Draw (Appendix B) a small trend line from the:

Last High or Low before the cross of the 51MA

Next high/s or low/s to form a small resistance/support line

2.5 Optional – SMAangle bars to be higher or lower than 0.2 or -0.2 line (I don’t use it any more

• the small resistance/support line is more accurate)

  THE TRADE SET-UP:

Rule 1: Small trend line rule:

3.1.1 Ensure that the price and candles stay on the correct side of the small trend line.

3.1.2 Any break-out cancels the set-up/possible trades

Rule 2: Specific manner of pullback of candles towards war zone:

3.2.1 Smooth and flat pullback of candles – no steep pullback

3.2.2 Smooth rounding of top/bottom (wave-like pullbacks) – no sharp V shape change of direction

3.2.3 Ascending of descending triangle being formed between resistance/support level and small trend line drawn

Rule 3: Pullback into war zone:

3.3.1 Identify the first candle to enter the war zone towards 21MA

3.3.2 Wait for second/more candle to pull back from 21MA towards 10MA

3.3.3 Enter the trade on the pullback a few pips away from the 21MA

Rule 4: Additional ADX rule (not yet fully tested):

3.4.1 For a long trade, the positive line (Blue) must be above the negative line (Red) with Isma line crossed the red line to go in between Blue and red line

3.4.2 For a short trade, the negative line (Red) must be above the positive line (Blue) with Isma line crossed the blue line to go in between Blue and red line.

3.4.3 The trend line must be above 25 level

3.4.4 If the ratio between the positive and negative line is almost 2:1, expect the pullback only up to the 10MA and enter the trade.

4. THE TRADE:

4.1 Use a market order to enter within the war zone as specify

4.2 Put Stop Loss 6+spread pips away

4.3 Move stop loss to breakeven after a clean 6 pips gain/profit (brokerage/spread included

4.4 No Trailing Stop Loss

4.5 Put/activate profit limit on 10-15 pips

4.6 There are plenty of chances to get in a trade:

4.6.1 Don’t try to trade every signal that might work

4.6.2 Wait for the good setup to occur

4.6.3 Wait for the High probability ones

4.6.4 Rather miss an opportunity than to get involve in a bad/wrong set-up

4.7 The Entry looks:

4.7.1 Small candles

4.7.2 Flat type of pull back

4.7.3 Some sort of Resistance (up trend) and Support (down trend) to form a small

acsending or decending triangle awaiting a breakout within the war zone.

Examoles of trading

First pull-back to 10MA – fast speed: • Consider taking the first trade during the fast speed trend (comply with set-up criteria) when price have a pull back to 10EMA – price tends to bounce off 10EMA first • Be careful – very risky – look at the example • When the 50SMA is clearly in a trend, wait for the price to pull back into the zone. If it goes through the 21EMA wait for the next bar to move back into the zone and then enter. When the trend is very strong it does not normally pull back deep into the zone. Look at history and you will see that. If two to three bars in a strong trend find support on the 10EMA just close your eyes and enter. Rules stay the same. 

You will find that it is only often that the 10EMA and 21EMA are more than 6 pips from one another. In most of those cases the trend is very strong upwards and then there is not a pullback to the 21EMA. Try to enter anything from 2 pips inside the zone. Sometimes the move downwards is fast and then wait for a slowdown before entering. With time you will get the feel for it.

Wait for two or more candles to enter trade/war zone (between 10 & 21MA): • Wait for two candles to make contact with/enter the war/trade zone on the chart before consider entering a trade. • Not necessary for second candle to open or close in the war zone • Entry should be made as close to the 21EMA as possible. When the move is quick halfway between the two is OK while when the move is slow closer to the 21EMA. It means 2-3 pips difference between the two,

 

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