PM_EMA Strategy for NinjaTrader - Setup Review

Hello everyone !
It has been a long time since the last post we made about this setup, so we are going to explain it to the maximum detail and show how to trade it with its TIS_EMA_Indicator and the Strategy PM_EMA_Trader.

This is a Trend Following Setup, so it works better with trending Markets.
It can be optimized for Impulsive Markets, but it will not perform in its best way. There are other Setups focused to Impulsive Markets ( See Impulse Setup ).

In terms of simplicity and easy to use this is one of the most easy and simple setups to follow and we only need to focus on 2 ( two ) Indicators :

• An Exponential Moving Average ( EMA )
• An Envelope ( Fixed number of ticks above and below the EMA )

The Exponential Moving Average (EMA) defines the trend and also is the entry ;
...when price is above the EMA, we want to go Long at its price
...when price is below the EMA, we want to go Short at its price

The logic is that the price will bounce near the moving average, several times, until the trend is over.... ( more about this later...)

Now we need to define when we are trade ready, and this is where we use the envelope.
While price is inside the envelope, we can consider the market is in sideways mode. So, no signals, no trades...

When price touches the upper band of the envelope, the setup changes to BUY Mode.
When price touches the lower band of the envelope, the setup changes to SELL Mode.

Some examples on the following charts :

This example starts with bars inside the envelope, so the setup is in neutral mode.
When bar touches upper band, the Buy Mode Start and we start looking for an entry at the moving average










Similar example for Short Signal :

On this example price start from inside the envelope ( bars are gray ) until the low of one bar touches the lower envelope and the Setup switches to Sell Mode.
At this point we start looking to short the moving average.
We get several entries ; each time price touches the lower band the bars turn red and the setup sets to Sell mode again.





What happens when the trend is over ...?

Lets look at the following example ;

We can see on the last Short of this chart, that price continued going against the trade touching the upside band triggering the Buy Mode.
If our stop is big enough to survive this move, when the price comes back to allow the long entry we can unload the short entry at a minimal loss.
This behavior is very frequent on  trending markets.





There are several ways to trade this setup, we can use a small stop, slightly lower than the envelope size, so we have a standard size loser at the end of the trend. The advantage is that those losers will be always equal and small.
Or we can use a big stop, usually twice the size of the envelope, resulting in a final average loser small but with some big losers.

Detail of the reversal procedure :

On these example charts we are using the Indicator for Ninjatrader TIS_EMA_Trader_Indicator with which we can indicate the period of the moving average and the size of the envelope and it will paint bars according to the trade setup.

With this trade setup automated, like the PM_EMA_Trader Strategy, we can 

• Perform a Scan of all moving averages to find the bests to use and worsts to avoid

• Optimize Targets, Stops and Envelope Sizes
• Research Best Times and Days of Week to trade
• AutoTrade the Setup !

If you have any question about this setup just let me know or post your opinions here !

Regards,

Pablo Maglio , The Indicator Store   Pablo@TheIndicatorStore  www.TheIndicatorStore.com

    

Supertrend Setup for Ninjatrader

Hello everyone !

Most of you may already know the Supertrend Indicator, it has been available for most platforms including Ninjatrader.

There are several versions, some of them free and including different calculation modes.

It is basically a trend detection systems very useful also for trailing stop management purposes.

On the following chart we can see the trend changes indicated by arrows when the line is calculated with the default settings ; an HMA(14) and a multiplier of 2.618

and on the following chart, the HMA is changed by the Median ;

Using an SMA :

Same SMA, but changing the multiplier from 2.618 to 1

As we can see, this is a very flexible and powerful indicator to define trend and reversals.

If we are in the Market, the indicator can be used to keep the trailing stop slightly below its line.

If we are looking for an Entry, once a trend change is detected ( red and blue arrows are painted ) we have several options :

• Enter at Market
• Wait for a pullback with a Limit Order Entry

If we decide to use the pullback entry option, then we need to define How to Calculate the Entry.

A suggested approach is using same line study used for the supertrend but with a slower period.

Lets review the SMA example where the supertrend is calculated with an SMA(8) and a multiplier of 2.618.

Now we add an SMA(17) ( dotted line ) and we have a complete trade setup :

Once we have a trend change ( arrow ) we place a limit order at the SMA.

On the following chart we can see a short at red dotted line and then a long at blue dotted line.

Entry time bars are marked with vertical lines :

Another example with HMA : supertrend with HMA(10) and Entry with HMA(50)

How to Manage the Trade

It is evident that this system will get the best results on impulsive and trending markets when we use runners.

When holding a position and using a trailing stop, at some time the trend will lose impulse and there will be a reversal.

For example, on the following Chart we can see a long filled after 4 or 5 bars of the arrow up :

If our trailing stop is big enough to survive all the way up and then we get a red arrow down we have several options ;

• Close the long after a red down arrow is painted
• Leave the position alone being managed by its trailing stop
  
• Reverse the Long Position at New Short Entry ( red dots ) assuming the long trailing stop is not triggered.

On The Indicator Store we have a Custom TIS_Supertrend Indicator with all the User defined settings to define the Trend and also a user defined Entry as shown on previous Chart.

If you like the Supertrend possible Setups using the rules explained, it can be automated by Markers ; a Semi Automatic and also Full Automatic System that trades all possible trade setups described. 

It has the option of Early Exit; in case we are holding a position, and an inverse arrow ( trend change ) is painted we can decide if closing actual position or not.

If we decide not using early exit, then the current position will be exited at trailing stop or reversed at new entry.

Let me know if you have any question or suggestion...

Best Regards,

Pablo

Internal Fibs Indicator

It draws the internal fibs between Max and Low made during for the selected session time ( crossing outside it could be considered an impulse move start )

Dibuja los niveles internos Fibonacci entre los Máximos y Mínimos operados para la sesión seleccionada ( cruzar fuera de este rango generalmente implica comenzar un movimiento impulsivo )