he mar ket , l i ke a

pendulum, is a never
ending sequence of
extremes. It forever tries
to reach the mean but
n e v e r s u c c e e d s ,
Alfredo Lorente
versin 2
Extreme TMA System
Layout: Lorenzo Gorrn
(Alorente)
ForexFactory
MTF TMA
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. Up front I will say that
this is not a fully tested system. Thats what we
will be doing in the coming weeks and months.
The principles are not complicated. The first
indicator, the smoothed 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 TMA Slope indicator will
show us the relative change in the slope of TMA as
compared to previous candles. It determines in which
direction a trade must be placed and also shows
divergences to price. For example, if price is rising but
the slope indicator is dropping, it is announcing a high
probability of a drop in price in the near future. The
steeper the drop in the indicator the higher the
probability of a drop in price. The same concept applies
in reverse in the case of a dropping price and a rising
slope indicator. A third use of the slope indicator is for
exiting purposes as described in the exit options below.
On the right side of the Slope indicator you will see the
value (white) of the current chart time frame. Above it
(Grey), the value of a user selectable time frame and
below the trade status of the current chart TF. The third
and final indicator is Trix (THV4 System) which we will
use solely as a visual guide as to the direction and
strength of price action. We will be talking more of THV
and especially of the great importance that the Coral
(Multicolor line) and the 200 SMA (Dark Blue) on trading
and in relation to each other.
Included in the templates are 3 TMA indicators. The M15 TMA (dashed
grey lines), the H1 TMA (solid orange lines) and the H4 TMA (solid
magenta lines). You can use any of the three without leaving the M15
chart, for entry and exit purposes. M15 TMA will be used as a short
term scalping tool (trades of 2 to 4 hours and potential gain of 30 to 50
pips), H1 (trades of 8 to 36 hours and potential gain of 80 to 130 pips)
and H4 (trades of 1 to 5 days and potential gain of 170 to 250 pips).
Having 3 TMAs on one chart is extremely helpful for determining longer
time frame trends and combined, they have high predictive value of
future market moves.
Entry rules
1
3
2
4
We will first determine trend in the TMA by using the TMA Slope indicator value
of the TF you are trading.
Ranging TMA (-0.50 a 0.50): Trades can be placed in both directions.
Buy Only TMA (Above 0.51): Place ONLY Long trades.
Sell Only TMA (Below -0.51): Place ONLY Short trades.
We will now look at the TMA Slope Indicator and only enter long positions if the
Slope value is rising and only enter short positions if Slope value is falling. The
steeper the rise or fall on the indicator, the stronger the signal.
Once trade direction is determined, we will look at the TMA and wait for price to
cross one of the 2 outer bands of the TF you are trading, the top band for a short
order or the bottom band for a long order. The further price moves across the
bands, the more reliable the trade will be.
Finally:
A. We will only take a short trade if price is above the upper TMA band of the TF
you are trading AND under a nearby resistance level located also above the upper
band.
B. We will only take a long trade if price is below the lower band AND above a
nearby support level located also below the lower band.
The more distant from the band that price is, the stronger the signal.
FPV
Entering the Trade
There are two ways to enter the trade, depending on your risk management profile:
A. Without Tight Stop Loss: If you do not use a tight stop loss (within 30 pips of entry price
or less), after complying with the 4 rules mentioned above, Sell as the first Heiken Ashi
candle changes color to Red. Buy as the first Heiken Ashi candle changes color to Blue.
Waiting for a close of the candle is not necessary but will give a higher percentage signal.
B. With a Tight Stop Loss: If you use a tight stop loss (within 30 pips of entry price or less),
at this point apply to the chart the correct EA of the two supplied. The 5 x 5 Buy EA for a
long trade or the 5 x 5 Sell EA for a short trade. Please, be aware that this option will reduce
your profit by several pips per trade. The trade off is less risk, since you enter the trade in
the desired direction.
The 5 x 5 EA will trigger an order once
price crosses the Smoothed 5 period, 5
shift moving average (The White Line on
the chart). When the EA triggers and
enters the order automatically, it will
suspend itself, so it will only enter one
order in that direction. Once suspended
(you will see "EA is Suspended" on the
upper left of your screen), you can
remove it from the chart and follow the
Exit Rules.
Extreme TMA System
Short
ForexFactory
Exit Rules
Conservative
Close of the position after price moves 20 pips in your favor,
move the stop of the remaining half to break even and close the
other when either PA touches the opposite outer band OR the
TMA Slope indicator closes one bar in the opposite direction of
the previous trend.
Normal
Move Stop to break even after 20 pips in your favor. Close the
position when PA touches the opposite outer band. Trail the stop
at the TMA size (distance between bands in pips). Example: If
the TMA size is 40 pips, set a trailing stop at 20 pips.
Aggressive
Move the stop to break even after 30 pips in your favor. Close the
position when PA touches the opposite outer band. Trail the stop
at 1/3 the TMA size (distance between bands in pips). Example: If
the TMA size is 60 pips, set a trailing stop at 20 pips.
1
8
9
10
11
7
1
2
3
4
2
3
4
5
6
TMASlope
THV Trix
Coral
SMA 200
Heiken Ashi candles
TMA 15M Upper band
TMA 15M Bottom band
TMA 1H Upper band
5
6
7
8
Extreme TMA System
There are various options in
this department and I wont
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). If a
trade goes against me, I will
use Recovery Trades to exit
the trade at breakeven. Great
work has been done in this
department by nanningbob. I
encourage you to read his
work.
Stop Loss
ForexFactory
TMA 1H Bottom band
TMA 4H Upper band
TMA 4H Bottom band
9
10
11
Extreme TMA System
Scalping Strategy
(5 m)
Long Strategy
1. Look for the first bar close of the TMASlope indicator that moves above 0.50 value.
2. Enter long when the first HA candle turns Blue. No need to wait for a close of the candle.
3. Exit long when the first bar close of the TMASlope indicator moves below 0.50 value.
Short Strategy
1. Look for the first bar close of the TMASlope indicator that moves below -0.50 value.
2. Enter short when the first HA candle turns Red. No need to wait for a close of the candle.
3. Exit short when the first bar close of the TMASlope indicator moves above -0.50 value.
This system will not work with tight stop loss placement.
You can monitor entries and exits on this trend system easily with the center line colors.
Enter long when center line turns green. Exit long on White. Enter short on Red centerline,
exit short on White. Remember to wait for the close of the candles.
Entry (long)
Exit (long)
ForexFactory
BUY SELL
BUY SELL
Extreme TMA Indicator
This indicator is intended to help identify currency pairs, metals, stocks, or futures
available within MT4, that qualify for the Extreme TMA System rules.
Carl Rodriguez (Crodzilla)
ForexFactory
Extreme TMA System
It means that price is below the lower TMA band for that
tradeable. So, it is in a buy zone, but does not qualify per
the rules, as a buy candidate.
BUY SELL
Means price is above the upper TMA band, but does not
yet qualify as a sell per the rules.
It means that price is still below the lower TMA band, but
the slope is ranging and falling. (Good for trend
continuation identification).
It means that price is still above the upper TMA band, but
the slope is ranging and rising. (Good for trend
continuation identification).
Its time to pay attention. Price is below the lower TMA
band, and Slope is in a range and Slope is rising.
Price is above the upper TMA band, and the slope is in a
range, and Slope is falling.
It means that price is in between the TMA bands. However,
if the rules are qualified for rising slope and the slope is in a
range, the dashes will be of the appropriate color.
If the pair header cell is RED, as shown above in the
EURGBP cell, then price is also near to a pivot point.
Shown in the above shot of the grid with Debug set to True.
As can be seen by the debug mode set to true, this chart shows that we are 16 pips away from the S2
pivot at 1.3138.