Hello everyone. My name is Alfredo. You can call me Al.
At the request of many of you, I am starting today what I hope will become a thriving laboratory of ideas that will make each of us, each day, a little better trader than we were. Firstly, I must say that I have never done something like this and I will rely on the help and contribution of you to make it a success.
The history of a trader, like my own, is a tough road full of failure, despair and loneliness, as well as fulfillment, excitement and triumph. It is a hard road full of obstacles and temptations to lead you astray from the path and in the end, only a determined few will succeed in conquering the many mines and potholes in the way and acquiring the discipline and knowledge necessary to succeed.
As I look back now, I believe the difficult years were necessary to forge the discipline and determination necessary to succeed. Yes, there are some traders that have never experienced the bad times, but they are few and far between. For the rest of us the way is hard but full of promise and a daily constant battle to control one's ego and remember the lessons learned. After 30 years, I can say I have learned a bit, but there is more to learn every day. The finish line is never reached and that is the wonder and thrill of this profession.
Up front I ask for your help and contribution. Let us be constructive and share our knowledge. If we do, this will have been worth while.
The System: Extreme TMA.
The market is cyclical and like a pendulum, is a never ending sequence of extremes. It forever tries to reach the mean but never succeeds, constantly overshooting its mark, reversing and trying it again but always failing to reach balance. This system attempts to capture those extremes. It is a compendium of my understanding of the market, brought to its simplest expression.
The principles are not complicated. The main indicator, the TMA shows us the average of the path that the price action in the market is following. As such, it is a backward looking indicator and attempts to determine the future from the recent history. It corrects itself by repainting itself. It has two outer bands that show us the outer boundaries of price movement that we are searching for. Our second indicator, the ExtremeTMA info panel shows the TMA slope angles of all time frames. It determines in which direction a trade must be placed.
MTF TMA: Included in the template are 7 TMA indicators. The M1 TMA (Aqua), M5 (Gold) and M15 (White) are used for scalping. The H1 (DarkOrange), H4 (Magenta), the D1 (Aqua), the W1 (Green) and MN (Sienna) are used for normal trading. Higher TF TMAs are only visible in lower TF charts. For Example: If you set the chart to H4, you will only see the H4, D1, W1 and MN TMAs. You can change the time frames in which the different TMAs are visible in the Visibility tab of each FastLineTMA indicator.
I recommend the use of the H4 TMA for opening trades and the D1 and W1 TMAs for trend direction.
Having several TMAs on one chart is extremely helpful for determining longer time frame trends and combined, they have high predictive value of future market moves.
Stop Loss Use: There are various options in this department and I won´t recommend any particular one. A natural level to place your SL would be above a previous high for a short and below a previous low for a long. I myself use only an emergency SL very far away from the PA (100 Pips).
Entry Rules (For H4 Trading):
1- Determine the H4, D1 and W1 TMA slopes by using the TMA Info Panel indicator values:
Ranging TMA (Slope between -0.30 to 0.30): Trades can be placed in both directions.
Buy Only TMA (Slope higher than 0.30): Place ONLY BUY trades.
Sell Only TMA (Slope lower than -0.30): Place ONLY SELL trades.
H4, D1, W1 slope values must be either Ranging or higher for Buys or Ranging or lower for Sells.
2- Wait for price to climb above the top band of the H4 TMA, before placing a SELL trade or below the bottom band of the H4 TMA, before placing a Buy trade.
3- The Trigger: After rules 1 and 2 are complied with, then Buy when price breaks the High of the previous H4 candle or Sell when price breaks the Low of the previous H4 candle.
Even though not explicitly mentioned in the rules, it is always a good idea to sell from under tested resistance and buy from above tested support. This is always a good rule to follow. It will prevent getting into a trade too early and will increase your percentage of winners. Valid support and resistance areas are: 50 or 200 MAs, TMA centerlines, daily, weekly and monthly pivot lines, etc.
Exit Rules:
Safest Exit: Close the trade when price reaches the H4 TMA center line.
Standard Exit: Close the trade when price reaches the opposite H4 TMA band or set a tight trailing stop (10 pips) until stopped out.
SuperTrend: Slopes lower than -0.60 or higher than 0.60 are usually very persistent and can continue for a long time. You may want to hold your open trade when in a SuperTrend.
That´s it ! The system is simple in concept and easy to trade. I recommend that you handle it with care. Use demo accounts or small lots until it shows itself to be consistently profitable and you acquire confidence in it. A trading system will only work consistently if you truly believe in it. As we move forward, I´m sure we will improve it and make it ever more reliable.
Good luck and welcome to our New Adventure !
Hall of Fame: The following members have collaborated or have made a positive impact on making this system a better one. The underlined names have made extraordinary contributions:
Crodzilla , shahrooz67, Paradox, lologo, NanningBob, Zznbrm, X-Man, Favorite, EasyRyder, mladen, Argonod, Olarion1975, Ever E. Man, Faxxion, flaw, Riddermark, slowpokeyjoe, beto21 cwb, Trainman, Baluda, bassramy.
(7-18-2013) Update: During the many months of development of the Extreme TMA system a lot of evolution took place. Indicators that we started with were later substituted with others we developed especially for the system. The rules changed also several times. When you begin reading the thread, there will be posts that refer to items that are no longer relevant. Just skip those and keep reading. There is a lot of information that will help you in your everyday trading. It certainly helped me a lot to listen to what these many intelligent members brought to the table. As you progress through the many pages, it will all make sense and you will be witness to the making of a system, that today is still a critical part of my trading methodology.
(11-11-2018) Update: ALL ENTRY AND EXIT RULES HAVE BEEN REVISED AND ALL NEW INDICATORS ATTACHED. WITH THESE INDICATORS AND THE NEW TEMPLATE, YOUR CHART SHOULD NOW LOOK LIKE THE SCREENSHOT BELOW.
At the request of many of you, I am starting today what I hope will become a thriving laboratory of ideas that will make each of us, each day, a little better trader than we were. Firstly, I must say that I have never done something like this and I will rely on the help and contribution of you to make it a success.
The history of a trader, like my own, is a tough road full of failure, despair and loneliness, as well as fulfillment, excitement and triumph. It is a hard road full of obstacles and temptations to lead you astray from the path and in the end, only a determined few will succeed in conquering the many mines and potholes in the way and acquiring the discipline and knowledge necessary to succeed.
As I look back now, I believe the difficult years were necessary to forge the discipline and determination necessary to succeed. Yes, there are some traders that have never experienced the bad times, but they are few and far between. For the rest of us the way is hard but full of promise and a daily constant battle to control one's ego and remember the lessons learned. After 30 years, I can say I have learned a bit, but there is more to learn every day. The finish line is never reached and that is the wonder and thrill of this profession.
Up front I ask for your help and contribution. Let us be constructive and share our knowledge. If we do, this will have been worth while.
The System: Extreme TMA.
The market is cyclical and like a pendulum, is a never ending sequence of extremes. It forever tries to reach the mean but never succeeds, constantly overshooting its mark, reversing and trying it again but always failing to reach balance. This system attempts to capture those extremes. It is a compendium of my understanding of the market, brought to its simplest expression.
The principles are not complicated. The main indicator, the TMA shows us the average of the path that the price action in the market is following. As such, it is a backward looking indicator and attempts to determine the future from the recent history. It corrects itself by repainting itself. It has two outer bands that show us the outer boundaries of price movement that we are searching for. Our second indicator, the ExtremeTMA info panel shows the TMA slope angles of all time frames. It determines in which direction a trade must be placed.
MTF TMA: Included in the template are 7 TMA indicators. The M1 TMA (Aqua), M5 (Gold) and M15 (White) are used for scalping. The H1 (DarkOrange), H4 (Magenta), the D1 (Aqua), the W1 (Green) and MN (Sienna) are used for normal trading. Higher TF TMAs are only visible in lower TF charts. For Example: If you set the chart to H4, you will only see the H4, D1, W1 and MN TMAs. You can change the time frames in which the different TMAs are visible in the Visibility tab of each FastLineTMA indicator.
I recommend the use of the H4 TMA for opening trades and the D1 and W1 TMAs for trend direction.
Having several TMAs on one chart is extremely helpful for determining longer time frame trends and combined, they have high predictive value of future market moves.
Stop Loss Use: There are various options in this department and I won´t recommend any particular one. A natural level to place your SL would be above a previous high for a short and below a previous low for a long. I myself use only an emergency SL very far away from the PA (100 Pips).
Entry Rules (For H4 Trading):
1- Determine the H4, D1 and W1 TMA slopes by using the TMA Info Panel indicator values:
Ranging TMA (Slope between -0.30 to 0.30): Trades can be placed in both directions.
Buy Only TMA (Slope higher than 0.30): Place ONLY BUY trades.
Sell Only TMA (Slope lower than -0.30): Place ONLY SELL trades.
H4, D1, W1 slope values must be either Ranging or higher for Buys or Ranging or lower for Sells.
2- Wait for price to climb above the top band of the H4 TMA, before placing a SELL trade or below the bottom band of the H4 TMA, before placing a Buy trade.
3- The Trigger: After rules 1 and 2 are complied with, then Buy when price breaks the High of the previous H4 candle or Sell when price breaks the Low of the previous H4 candle.
Even though not explicitly mentioned in the rules, it is always a good idea to sell from under tested resistance and buy from above tested support. This is always a good rule to follow. It will prevent getting into a trade too early and will increase your percentage of winners. Valid support and resistance areas are: 50 or 200 MAs, TMA centerlines, daily, weekly and monthly pivot lines, etc.
Exit Rules:
Safest Exit: Close the trade when price reaches the H4 TMA center line.
Standard Exit: Close the trade when price reaches the opposite H4 TMA band or set a tight trailing stop (10 pips) until stopped out.
SuperTrend: Slopes lower than -0.60 or higher than 0.60 are usually very persistent and can continue for a long time. You may want to hold your open trade when in a SuperTrend.
That´s it ! The system is simple in concept and easy to trade. I recommend that you handle it with care. Use demo accounts or small lots until it shows itself to be consistently profitable and you acquire confidence in it. A trading system will only work consistently if you truly believe in it. As we move forward, I´m sure we will improve it and make it ever more reliable.
Good luck and welcome to our New Adventure !
Hall of Fame: The following members have collaborated or have made a positive impact on making this system a better one. The underlined names have made extraordinary contributions:
Crodzilla , shahrooz67, Paradox, lologo, NanningBob, Zznbrm, X-Man, Favorite, EasyRyder, mladen, Argonod, Olarion1975, Ever E. Man, Faxxion, flaw, Riddermark, slowpokeyjoe, beto21 cwb, Trainman, Baluda, bassramy.
(7-18-2013) Update: During the many months of development of the Extreme TMA system a lot of evolution took place. Indicators that we started with were later substituted with others we developed especially for the system. The rules changed also several times. When you begin reading the thread, there will be posts that refer to items that are no longer relevant. Just skip those and keep reading. There is a lot of information that will help you in your everyday trading. It certainly helped me a lot to listen to what these many intelligent members brought to the table. As you progress through the many pages, it will all make sense and you will be witness to the making of a system, that today is still a critical part of my trading methodology.
(11-11-2018) Update: ALL ENTRY AND EXIT RULES HAVE BEEN REVISED AND ALL NEW INDICATORS ATTACHED. WITH THESE INDICATORS AND THE NEW TEMPLATE, YOUR CHART SHOULD NOW LOOK LIKE THE SCREENSHOT BELOW.
