The trading strategies of the masters (1) Triple filter system

In the daily communication with friends, I found that many people have hardly read trading books. In fact, thinking about it is also true. Now that the pace of life is so fast, it is difficult to calm down and read a book. If you lose some money when trading, you will feel even more irritable and can't read it at all.

I have been fortunate enough to read a few books. Everyone is like-minded. It is not easy to do business and mix. I am happy to share some things I have learned with you. Since everyone’s time is precious, I will condense the knowledge I can extract from the book into the essence and share it.

Well, since everyone has eaten their staple food and is almost full, let's start serving, hehe.

​Triple filter system ——————From Alexander Edel's "Into My Trading Room"

​Speaking of this person, some people may not be familiar with it. The indicators that come with MT4 are developed by him. If you are interested, you can find out.

In view of the fact that there are more friends in the day, I will use the day as an illustration.

The first filter screen, looking for the direction. If we trade on the 15M chart, we need to find a long-term chart with reference significance to judge the direction. The author suggests that the period of the long-term chart is 5 times that of the operating chart. However, MT4 does not have a suitable time period. We choose 1H as the long-term chart. to judge the direction.

                                                               (The moving average is 30EMA)

The original text is roughly described as: When the 30EMA points to the same slope as the MACD column, it is bullish. Switch to 15M to look for entry opportunities. However, we found through the chart that the 30EMA and the slope of the MACD column in this rising market in the figure are very rarely consistent. In less than a day, there is no opportunity to do long at 15M. ​So I changed the condition in the first filter to: when 30EMA is up and the MACD signal line is above the 0 axis, return to 15M to find long opportunities

The second layer of filter is to find the entry point. Draw a price channel synchronized with the EMA in the 15M chart, which is required to cover 95% of the market (this channel can be modified according to subsequent market changes, and the principle is still to cover 95% of the market)

​The description in some parts of the original text DeMarker is used as the shock indicator, and the parameters are default

After the chart is drawn, look for entry opportunities. The original text roughly describes it as: when the price is below the middle purple moving average, the overbought, oversold or divergence shown by the oscillator is used as an entry opportunity.

The third filter screen determines the entry and exit points. Entry point Through my own test, DeMarker works best as an oscillator. Take the above picture as an example, it is safest to need the indicator to be below 0.3, and then cross 0.3 upwards as an entry signal. The initial stop loss can be set outside the lower track, taking into account the spread.

Exit point The original description is to exit the market at a profit near the upper track of the price channel. This point is rather vague and difficult to operate. I am not very satisfied with this statement.

All I will modify the profit exit rules:

1. Touch the upper track of the price channel to exit the market.

2. In order to prevent the situation where the price does not touch the channel, but instead falls and leads to losses, when the order floats and wins and the candle runs above 30EMA, move the stop loss price up to the cost price.

​Taking the picture above as an example, there are a total of 5 opportunities to enter the field, and the blue marked 3 entered the field after touching the upper track of the channel and successfully exiting the field. In the 2 places marked in red, the highest price did not touch the upper track, but hit the previous stop loss price, and turned the profit order into a loss. No one wants to see it. If the stop loss is moved to the cost price, the two Although this order did not make money, it will not lose money.

If you don't lose, you earn, right? If you have any good suggestions for the above oscillating indicators or exit rules, please discuss them in the comment area​! 

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​Easter egg: Friends who are interested in this book can go to Huichao to check out foreign exchange books by themselves, and there may be unexpected receipts. This book is about a complete trading system, from technology, fund management, psychology, trading The diary and other aspects are explained, which will be helpful to friends who are building a trading system