kooole

I have been looking for a system based on daily charts because I have a full-time job and can only look at the charts 2-3 times per day max. I read the thread started by 60minuteman titled "Buy sell line trading", and liked the idea of using price action for entries. Even though his thread was not mainly focused on daily charts, I did some backtesting on EUR/USD daily chart for the past 3.5 years and found it to be worth pursuing.

Here are my backtest results from the start of September 2009 through the end of February 2013 using IronFX demo data (because they do not have Sunday candles):
109 trades
45 wins
22 breakeven
42 losses
Take profit is always 2 times the stop loss amount
7,074 pips
48R (which means it made a total of 48 times what was risked on each individual trade)

Here are my rules for trading which are slightly different than 60minuteman's:
Look for buys if the candle has closed above the 50 simple moving average and if the 50SMA value is higher than the value 4 candles back.
The signal candle will be a candle that has closed higher than the previous candle's open, and that previous candle must have an open that is equal to or higher than its close.

Another type of signal candle will be one that has the lowest low of the last 3 completed candles and has a close that is in the upper 25% of the candle height. If this candle does not have a close in the upper 25% but the following candle does, then that candle will be the signal candle.
Set a buy order 0.1 pip plus spread above the high of the signal candle.
If the order is not triggered by the end of the day, then cancel the order.
The stoploss will be 0.1 pip below the low of the signal candle.
Move the stop to breakeven after price has advanced the same number of pips that you are risking.

The take profit is always 2 times the amount of the stoploss.
For sells, the rules are the same just vice versa.
I did not use any S/R lines or any discretion because I wanted as little bias in the backtesting as possible.

My main reason in starting this thread is to find someone who might be interested in making an EA of this system for the purpose of backtesting. I don't have a lot of time to backtest since I work a lot and do the backtesting manually. I would like to find out if this system is profitable with other currency pairs. I'll attach my spreadsheet of the results for your information. I'll try to post some pics of examples later.
Thanks.

Here are 2 examples of trades:

The green arrow signifies a signal candle that had the lowest low of the last 3 candles and closed in the upper 25% of the candle height. The red moving average line is the 50SMA which has a higher value than 4 candles back. The green horizontal line is the entry buy which triggered on the candle after the signal candle. The stop was moved to breakeven on the Jan 10 candle after advancing the same number of pips that were risked. The green check mark is the take profit level which is twice as much as the stop loss.

The yellow arrow signifies a signal candle that had a close higher than the open of the previous candle (also the previous candle had a close lower than its open). The red 50SMA is higher than 4 candles back. The yellow horizontal line is the entry buy which triggered on the candle after the signal candle. The yellow x mark is the stop out level.

EU Backtest.xlsx

Hi Fellow Traders,

My name is Sonic. I want you to read The 5 steps of Becoming the profitable trader (5 steps pdf) document before you do anything else in trading.

The Story

I have been trading for a near 4 years now (Since 2008) and been a blessing so far.
Just like many of you. I started out hunting for the holy grail <aka> indicators that gives buy/sell with 0 loss.
Soon, I found out that my trading statement is going no where, with messy charts and too many indicators to confirm. That causes the late signal trigger; minimizing my wins and maximizing my losses. I start to realise that indicators the one based on the prices happened can calculated according to the formulae, casuing them lagging behing thr price. movemment.

After reading many TA systems, books and LIVE trading, I have found out about there is no systems or indicators can really predict where the price will go. I became to understand the importance of Money Mangement, General trend, S & R.

The philosophy

Trading is a probability business.
Even you put tons of hours for a set up and it still can turn sour..
You can win and you can lose too.
It is your job to minimise your loss and maximize your win.
You will follow set of rules that will help you on the winning sides most of the time.

The Rise of Sonic R

Here is a simple, nice and profitable 15M swing system that I get inspired from Raghee 's book.
A Blindly followed Moving Averages system can be very successful in trending market, but I am around here long enough to witness the failure of it, when the market goes into ranging periods.
So, I fine tuned the system with understanding of Volume Analysis,S & R, Wave analysis and Price action, and I am getting high success rate on my position/swing trading.
I'd like to call it Sonic R.
Now, it is not the magic bullet, nothing is.
It is a simple EMA based yet effective system.
You can earn 50 to 400+ pips on a trade.

The Reason
And why am I sharing this, while I do not earn a penny from you for my time and effort? Because I believe Sharing is Caring.

The Setups/Rules of the system

Sonic Rules.

1. Do not Over trade big or trade during Asian Session.. Most of the best Set Up or Proper trend occur at/after London Opens. You shouldn't trade more than 5 trades a week..

2. Never add a losing positions aka average your positions.

3. You SL must wide enough to for the price to breath.. If you put it too tight, the chance of getting your SL hit is very high even though the price goes to direction that you wanted eventually.

I have put the "entry, exit, SL and TP" rules with all necessary indicators into "SonicR or SonicRV2 or SonicRV3" zip file.
SonicRV3 is created with better and more comprehensive examples..

You also can check out our best contributer Professor TAH's templates

Summary of Upgrade and Installation

Attached are new TAH indicators and starter templates for the Sonic R. System. This upgrade fixes and improves the indicators, described as follows (Red Headings). Download the zip file. Extract it to yield the two folders for black and white charts that contain the individual indicator and template files. Paste the indicator files into the MT4/experts/indicators folder. Paste the template files into the MT4/templates folder. Restart your MT4 application.

Control Panel

Occasionally the vLines were incorrectly displayed when shifting between AM and PM hours. This issue is fixed. For brokers with “tail end” Sunday sessions (typically any broker at GMT) the vLines would be stacked atop each other at the open of this short session. This issue is fixed. The average range formula is improved. And changes were made to colors in the Clock so that both black and white templates use the same colors for active market hours versus non-market hours in shades of gray.

FFCAL Panel

At times the panel did not show upcoming events, or did not show multiple same time high impact events. This seemed to be only when low impact events were selected to be displayed. This issue is fixed.

Line Dragon-Trend, Solid Dragon-Trend

Brokers with short Sunday sessions (typically any broker at GMT) lack the data required to make the Dragon and Trend continuous when applying a different TF configuration to the chart (example: using M15 TF configuration of Dragon-Trend on the M30 or H1 chart). New coding identifies when there is insufficient data, and compensates so that the Dragon and Trend can be displayed as continuous.

VSA Histogram

The “sound only” alert called for a sound wave file that is not resident in MT4. The MT4 “alert2.wave” file is now called. Also, the ShortName coding has been improved to recognize and display when either alert is “On”, but when the chart TF is M1, the alerts are (default to) “Off”.

Brief History of the Indicators

These new indicators were first released 04/04/2012. The new SonicR Control Panel combines and replaces the previous SonicR Chart Panel and SonicR Clock Panel. The release added back the market vLines and TzPivots that were excluded in the final release of the SonicR Chart Panel 07/16/2011. With a live data feed, new coding handles the vLines and user requested TzPivots without special inputs, and facilitates making the one special input needed to display them when there is no live data feed. The release also included the new SonicR Solid Dragon-Trend indicator. Highlights of these new indicators follow (Blue Headings).

Control Panel

Replaces the Chart Panel indicator. It includes the Clock Panel and accesses it’s coding to handle the time zone and Daylight Savings Time issues for proper year round vLines placement and TzPivots, while data feed is live. While feed is live, follow the instructions in the user notes to make the single input you will need to display the vLines and TzPivots whenever there is no live data feed. The default setting of this input is for a Broker at GMT. Both the Daily and Fibonacci formulas are included for pivots, and you can display mid-pivots. The default setting for TzPivots is GMT+3, the most widely used, but it can be changed. The “scale” placement of lines on the right of the chart adjusts automatically when the chart zoom is altered. An automatic indenting feature is included. The symbol display in the Panel is now clear of broker additions. The Clock automatically labels times matching Broker and Local times.

FFCAL Panel

Additional refinements were made to prioritization coding, and new coding adjusts the background width automatically based on length of text in the event titles.

Line Dragon-Trend

Included as an alternative to the Solid Dragon-Trend, with new compatible colors.

Solid Dragon-Trend

Included as an alternative to the Line Dragon-Trend, for "easier on the eye" charts to help improve focus on PA. Components that make up the Solid Dragon can be set to adjust automatically to the chart zoom setting.

VSA Candlesticks

Places candles on top of the Solid Dragon, highlighting them with colors according to hard coded VSA settings. Candle widths can be set to adjust automatically to the chart zoom setting. The highlighting colors can be turned on/off.

VSA Histogram

Recoded for a more pleasing look, this provides a volume histogram in a chart sub-window, highlighting the bars with colors according to hard coded VSA settings. Histogram bar widths can be set to adjust automatically to the chart zoom setting. The highlighting colors can be turned on/off. Choices of two alerts, sound only and sound w/text, are provided for “Climax” candle events.

Instructions on the Use of the Indicators

User notes are provided in the compile of each indicator, and are quite extensive in some cases. They will answer most questions. And questions not answered probably will be with just a little use of, and experimentation with, the inputs to these indicators. Please read and reflect on the user notes, and experiment with the inputs. Great pains have been taken to provide adequate user notes and instructions. Please don't ask questions already answered in the user notes simply because you have not bothered yourself to take the time to read them.

Once the indicators are installed into MT4 you can access the user notes. In the main MT4 window there is a yellow diamond icon with "i" in it. Click on it to open the MetaEditor, where you will find a list on the right that includes "indicators", where you will find the indicators you want to "open" in order to see the user notes at the top of indicator compile (code). Double click on any such indicator in the list and the code for it will appear in the MetaEditor window. You can scroll down the code to view. You will find user notes near the top.

Summary of Templates

Three starter templates are provided for both black and white charts. Many configurations of the display of Levels, pivots and range lines are possible using the extensive line placement controls in the External Inputs of the SonicR Control Panel. You are encouraged to experiment with these inputs to become familiar with what they do, and what they allow you to do to customize your charts. The starter templates are shown below.

The templates include both the Line Dragon-Trend indicator and the Solid Dragon-Trend indicator. The Line Dragon-Trend indicator is turned off. If you wish to use it rather than the Solid Dragon-Trend indicator, simply turn it on and turn the Solid Dragon-Trend indicator off.

Conclusion

These new indicators include more features, yet setup and use is simplified. The new Solid Dragon will give your charts a cleaner look. The user notes for each indicator have been meticulously written to instruct and to inform, and so to void any necessity to answer questions about the indicators.

Be advised: read the user notes instead of asking questions!

Acknowledgements

I wish to express my sincere appreciation of CaveMan for his generous contribution to TzPivots coding and of Kent (Pips4Life) for his excellent Clock indicator. Were it not for the coding of these two gentlemen our Control Panel would not be half what it is. Thank you, CaveMan. Thank you, Kent.

The latest Sonic R. System Manual (in brief)

The Sonic R. System is a method of trading price movements between areas of support and resistance. It trades on the M15 chart. It uses a price activity WAVE at an S&R area to validate a trade setup, and technical indicators called the DRAGON and the TREND. The DRAGON is used for picking the trade entry. The TREND is used to confirm the correct trade direction. Historic S&R is used for picking the trade exit.

WAVE
L-H-HL starting below Dragon for longs, H-L-LH starting above Dragon for shorts, showing "bounce" or “breakthrough” at S&R. Best if WAVE leg #1 crosses thru the Dragon.

DRAGON
Must be angled up with PA above it for longs, and angled down with PA below it for shorts.

TREND
This is a market bias indicator and it is best if PA is above it for longs and below it for shorts.

TIMING
Prefer not to open trade during asian session. Recommend London session for best momentum. Trade can be closed anytime.

PAIRS
Prefer to trade the pair EUR/USD. Lowest spread. Usually a wide range. Most important is it is most traded pair, which means better volume and better momentum for the trade.

Placement of EP
Wait for a WAVE leg #3 candle to break out of the DRAGON, and place your entry order at least several pips beyond it. It is better if there is no strong S&R area just beyond the entry. Remember also, it is best if PA is above TREND for longs, below TREND for shorts.

Placement of Re-entry
It is best to let PA clear the most recent high, or low, and if there is no strong S&R area just beyond this re-entry.

Placement Of TP
Select a historic S&R level. Such levels can include whole/half/quarter numbers and the middle of consolidation areas.

Placement of SL
These are the rules for placement of the SL (see picture below that illustrates):

1. The SL must be beyond the H/L (for shorts/longs) of the recent large scale price swing.
2. The SL must not be more than 100-120 pips from the EP (for EUR/USD).

Example

Below are an example of a Sonic R. System short setup and trade, and of the rules for placement of the SL. The key elements of the Sonic R. System are clearly labeled and illustrated.

Conclusion
To start with the Sonic R. System, read all of Post #1 and the linked material. Read the first 25-50 of Sonicdeejay's posts. Read at least the last month of all posts. Please do not ask any questions for the first month of studying this system, because as you read, reflect, and read more, all of your questions will become answered thru your own efforts.

The purpose of this thread is to be a "text book" on the Sonic R. System, which learners can read thru and grow. So, the fewer posts that ask/answer the same elementary questions from newcomers, the better for all to have fewer posts to read to progress! The Sonic R. System is elegantly simple. Believe me, any lingering questions you have will be answered as you read the thread and diligently study the trades and other information already posted here.