First of all, I want to thank Sterling for introducing me to the 5 ma hilo channel system. I have changed a few things, more to my style, and comfort level, and with less risk.
The idea is to put a 5 ema high, and a 5 ema low on a chart, any time frame you want, and this forms a channel. When price moves out of the channel, we look for candles fully or mostly outside the channel. I prefer small range candles and not to enter the trade if the setup candle goes half way into the channel... we need room for it to move. A break of that candle in the oposite direction triggers an entry. Stop loss would be 1 pip above or below the setup candle. Profit taking is up for discretion, but usually it at least reaches the opposite channel. If counter trending one might then take full profits, if trend trading partial profits could be taken with SL set to break even. as long as candles go in the profit direction, stay in the trade, once a reverse candle, or setup is made, then close the trade and reverse with proper signal. I look for follow through and momentum. If after 2 or3 bars you're still not in profit, it might be a good idea to exit before your SL gets hit. In most cases you'll see follow through on the next candle after entry.
I have found that while not every trade is profitable, that many are, especially when we look for candles outside of the medium range, preferably small range candles, at the top or bottom of a swing, so our SL is smaller. Also there are times when this system works great, and other times in extreme trends, or tight ranges it doesn't, but I have this idea that someone with good coding ability and peoples ideas for profitability that finally a profitable EA could be coded. Any takers? I'm not a coder yet, although I'm ever tempted to learn.
The idea is to put a 5 ema high, and a 5 ema low on a chart, any time frame you want, and this forms a channel. When price moves out of the channel, we look for candles fully or mostly outside the channel. I prefer small range candles and not to enter the trade if the setup candle goes half way into the channel... we need room for it to move. A break of that candle in the oposite direction triggers an entry. Stop loss would be 1 pip above or below the setup candle. Profit taking is up for discretion, but usually it at least reaches the opposite channel. If counter trending one might then take full profits, if trend trading partial profits could be taken with SL set to break even. as long as candles go in the profit direction, stay in the trade, once a reverse candle, or setup is made, then close the trade and reverse with proper signal. I look for follow through and momentum. If after 2 or3 bars you're still not in profit, it might be a good idea to exit before your SL gets hit. In most cases you'll see follow through on the next candle after entry.
I have found that while not every trade is profitable, that many are, especially when we look for candles outside of the medium range, preferably small range candles, at the top or bottom of a swing, so our SL is smaller. Also there are times when this system works great, and other times in extreme trends, or tight ranges it doesn't, but I have this idea that someone with good coding ability and peoples ideas for profitability that finally a profitable EA could be coded. Any takers? I'm not a coder yet, although I'm ever tempted to learn.
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