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M.A. Magic


I said in the euro thread I would explain the way I trade the Euro a little better. I call it ma magic. I have had headaches in the past when posting what I look for on forums because others will see a draw down and claim it doesn't work. I have been trading the eur/usd, and the eur/jpy now full time for almost 3 years and part time since 02. When I would trade the EC as it was called back then from 8am till the ES open and trade the US session in the e-mini nasdaq and ES. I now trade the Eur/Usd because its king there is no other tradeable thing that moves this much it swings 30 ticks up and 60 down then 55 ticks up in an hour. So here it goes;

-5min Eur/Usd
-time from 6am-15:00 and 18:00-21 or 22:00 ONLY. do not trade lunch time. take a long lunch and get away from the computer for at least 90min if I am not in a trade by 2:00 I am done for the day.
-Next is position size I trade 15 to one margin. 1M size is what I call 1 unit which is equals 8 contracts of the 6E.
-Hull MA 13 period dash line
-Hull MA 10 period solid thick line
-5 period SMA pink line

*Both HMA's should have turned green for a long, red for short.
*For a trade (1 unit) to be entered in either direction the 5sma (pink line) should never ever be flat this is a sign of chop. It should look like a hook like the HMA. If the sma is flat never take the trade its no good chop like what brooks calls barb wire.
*The signal bar should for a long be at least higher than the last 2 bars. And should not be a larger than normal trend bar. i.e. if the standard range on the euro for 5min is 7 pips and this bar is 17 with a flat sma and match the high of the bar 10min ago chances are this is just chop. These trades will pop up about 10 times a day.

***A bull trap trade (2units) is when the Euro makes a high it has not in an hour and then it close's on its low. Next bar is an inside bar, next bar is a signal bar with the SMA and HMA hooking down and a trade one tick below the inside bar low. This is a bull trap and the bulls have been trapped. Opposite for a bear trap. These are wonderful set-ups and I take about 3-4 a day.

-Next is stops I enter with a limit always. I never trade market. I look for 10 pips. and a loss of 15pips and/or when the dash HMA signals a trade in the opposite direction. Which is far far more likely than getting stoped on the full 15 pip loss. Most of my losses are around $600 or $800 or 6 to 8 pips while my profits are 10 pips. I can go days without getting stopped out. Once I have a 5 pip profit I bring my stop loss to -5 pip. and leave it.

I don't web surf, watch tv, listen to the numbers, I don't even know what/when something is coming out, i don't listen to music or run errands while I am trading. I don't eat or drink while trading. I watch ever tick, If I find myself getting bored like changing the colors of my ma's Either I need an hour break because I am distracted or the market is not moving due to some major news. And for 95% of the day I am in the market, and I never carry anything home.

I'll try to post some charts next week.
Nice post Joe,
Are the times you posted Eastern? Look forward to seeing a couple of your charts if you get a chance to post some.
Cheers...
Yes eastern std time
Another thing I forgot to mention is that the stop of 15 pip loss and 10 pip profit is not fixed it is changed as the range changes. I take the last 5 days and get the avg range which is 150 something pips and divide that by 10 to get my stop i.e. 15 pips and 2/3's of that for my profit. This way my stops are in proportion of the normal recent moves.
Nice post
When you mention HMA colors, presume that you are coloring them based on slope...??
Have you ever tried your "magic" on any other E mini instruments eg NQ YM..??
Tkx
rg
It works for me on any market because its based on average price action. If average price action is advancing your most likely gonna do better buying into pullbacks than shorting a breakout.
There is a possible bull trap setting up on the ej (eurjpy) a high that has not been seen and a close on the low and so far an inside bar. I have a limit order at 115.185 for a short that is the high bars low.
Good evening traders.

I want to talk about hour moves and how they relate to ma magic. I draw horizontal trendlines on every hour on the 5min from 6-11 and 1-4 est. I use 11-1 as 1 hour (thou I most often do not trade the lunch session) The majority of hours on the 5min resembles a large "V" Price will advance for 15, 20, 25, 30 min and then spend the rest of the hour retracing not all but for the rest of the hour. For ex. It could spend 15min (3 5min bars) going up and then 45min going down but only cover half of the ground gained. Showing not a perfect "V"
So what I look for is a decline from the start of the hour maybe lasting 20min and now price is going sideways I will enter as soon as I get a dash line cross or a good looking reversal bar. In anticipation of a "V" pattern.

more later