Trading the OsMA

[Sobe]

Well, I hope those that have been following along enjoyed this week and especially today. The signals were pouring in overnight. You really had two options on how to play this, either enter with tight stops, or wait for NFP. I chose the to enter short on the EUR/JPY early in the European session and ended up holding them until about London close, either choice had you earning big gains today. :clap:

 

[madjava]

Hello Sobe,
Joined the forum because of your thread, was looking for good info on the OSMA indicator via google and i can say i've hit a gold mine. Thanks so much, you've really help me in my trading.

 

[Magicpip]

Thanks Sobe, I too was looking for info on the OSMA indicator and found this thread. It's easy to use and works!

 

[shamtt.trader]

Hi Sobe,
Thanks for comprehensive info. I'm new with OsMA. My favourite is GJ & EJ. Will keep reading & understanding your point here. Thanks a lot. Keep it up bro!. Thanks.

 

[wing9577]

Hi Sobe,
Thank you for sharing one of your trading methods and your insights. Much appreciated. I am a derivative trader and work as a market analyst at one of the largest securities company in Asia. I think your method is great. Keep up the good work, mate.

 

[NVP]

hey all....interesting

can someone explain to me why this indicator is better than just
trading a Macd signal and using common sense in interpreting it ?

thanks

N

 

[NVP]

Re: Recap of today's live trade setup on EUR/USD

Earlier today I made reference to two trade setups, one on the EUR/USD, which was a counter-trend trade, which as I mentioned I do not like. Here is the original chart:



As you can see price was at 1.2538. I thought price would retrace to 1.2600 before it got shorted heavy again. Here is what happened:



Traders just couldn't wait to get in and sell the Euro. The dollar is certainly not strong, momentum has taken over.

hey mate

have you ever considered using a Forex strengthmeter alongside your analysis ?

you can always identify the behaviour of the 2 currencies in the pair you are targeting then.....and answer the questions you were asking above on USD and Euro behaviour :smart:

N

 

[Sobe]

Hi,

Welcome back to me!! :clap:

Anyway...I came back to say, yes, I STILL trade this method....with some caveats. I'll explain those in a minute.

The other reason I came back to the forum is to give everybody a big "you're welcome." Since my last post, which has been a while I get weekly messages asking me about my trading and using my indicators, and thanking me for the info. It seems to have picked up even more lately too.

So, here are the changes I've made. First, I'd like to say I didn't make adjustments because things weren't working. I've made changes to fit my lifestyle and trading goals. My fundamental trading methodology has not changed, I'm still all about OsMA, divergence, candlestick patterns, and S&R. My knowledge of OsMA, risk management, and trading in general has increased (as it should). The day you lose the drive to stop learning, close your account!!

The first and probably most fundamental change I've made is to TF. I look at ONLY H4, Daily, and Weekly charts. Whereas before I was on the M30, H1, and H4.

Second, I only use two OsMA indicators instead of three. I use the current TF and the one above. So for the H4 TF, I use H4 and Daily, or for the Daily chart I use the Daily and Weekly OsMA. However, for chart cleanliness I show only the current TF. One of the advantages (and there's many) of trading longer TF's is there's plenty of time to do analysis. Also, I have removed the 21 MA and left just the 50 MA

Third, I have incorporated RSI with only a 50 line. I'll explain my thoughts on that in another post.

Fourth, I trade 18 currency pairs and gold and silver too. I'm not gonna list them, as you'll see them as I post more.

Lastly, my entries have been tweaked a bit

My plan is to continue to post and support my thread and its interested users with updates, trade ideas, trade plans, thoughts, and whatever else anyone would like to know or see.


The indicator attached in the first post of this thread is the same one I use now. There has been no changes. If you are interested please go there and download it. Thanks!! Good Trading!!

 

[Sobe]

Here is my new view:

 

[Sobe]

hey all....interesting

can someone explain to me why this indicator is better than just
trading a Macd signal and using common sense in interpreting it ?

thanks

N

Hi NVP,

I'm probably the best person to explain it, since I am the thread starter and long time user of OsMA.

I would simply say, for me at least, it's easier to interpret, gives better entries, and displays the chart patterns (that become instantly visible within seconds) I like to trade, whereas the MACD does not. Also, while the OsMA is a different interpretation of MACD, I would argue they are totally separate. Not in the sense of being apples and oranges, but more like an orange and a lemon, both citrus fruit but very different.

I think the best way to illustrate this is with actual charts. While I don't trade just divergence, I do use it as an indicator of a possible reversal. The easiest explanation of OsMA is that it charts using a histogram of how far away the MACD bars are from its signal line. While its sounds like common sense it's not so easy when you plot it on a chart. And in fact, becomes quite difficult when trying to interpret it. So, why use a tool (MACD), when you can use the OsMA and get the same information, plus more, in an easier to interpret manner. No brainer...:idea:

I hope this answers your question. Thanks!!

 

[Sobe]

Re: Recap of today's live trade setup on EUR/USD

hey mate

have you ever considered using a Forex strengthmeter alongside your analysis ?

you can always identify the behaviour of the 2 currencies in the pair you are targeting then.....and answer the questions you were asking above on USD and Euro behaviour :smart:

N

Hi Again,

Simply, NO!!

In fact, I am always analyzing ways of removing tools from my charts. It has taken me a long time to put the RSI on my chart, and I am analyzing it uses. In fact, I am realizing the 50-sma and RSI (5) are giving me a lot of the same info, and one of them is going soon. As mentioned in a previous post I no longer use a 21-moving average. I found over time it had no influence on my trading decisions. So, bye-bye it went.

There's one tool I recommend above all others. RISK MANAGEMENT!! There's probably tons of "profitable systems" out there. However, it is the correct application of money management that makes the difference. Because I trade longer TFs now, my trade decisions have become more fundamentally driven. While strength meters and the like are great tools, they're applied best to day trading, IMO. The large majority of my trades range days or weeks. I will be posting trade thoughts and decisions here and you'll be able to see how I manage risk going forward.

 

[Sobe]

Some daily trade thoughts

EUR/JPY below 101.70
EUR/AUD below 1.2120
Silver - I'd feel better shorting at 34.50-35.00 area
GBP/CAD long at 1.5710
CAD/JPY looks daily candle looks like a nice short at 78.15


EUR/CAD short closed at 1.3040

 

[NVP]

thanks ..........some informed and knowledgable responses and I hope you get some more interest in this thread

as I always say ...there are lots of ways to make money trading but you have to become proficient and consistent in one field of expertise to do it

N

 

[ZenithTraders]

Hi

Good stuff throughout this thread!

Quick question...

Under the updated trading and chart setup methodology, what should the OsMA Indicator Input Settings be for the Time Frame Value field when setting up "the one above" the Daily, Weekly and Monthly OsMA?

Thanks!

Zenith

 

[ZenithTraders]

Sorry...

Think I found the answer to my question posted above concerning OsMA Indicator Input TimeFrame Values for the updated trading methodology as described by Sobe in his post on 02/11/2012 .

In MetaTrader 4, ALL indicator TimeFrame Values MUST be set in MINUTES. So the OsMA Input TimeFrame Values for the "one above" OsMA Indicators per specific chart time frame would be:

Daily = 1,440 = (60 x 24)
Weekly = 10,080 = (1,440 x 7)
Monthly = 43,200 = (1,440 x 30)

Can you please confirm?

Thanks!

Zenith

 

[Lawrence Burrows]

Hi,

Welcome back to me!! :clap:

Anyway...I came back to say, yes, I STILL trade this method....with some caveats. I'll explain those in a minute.

The other reason I came back to the forum is to give everybody a big "you're welcome." Since my last post, which has been a while I get weekly messages asking me about my trading and using my indicators, and thanking me for the info. It seems to have picked up even more lately too.

So, here are the changes I've made. First, I'd like to say I didn't make adjustments because things weren't working. I've made changes to fit my lifestyle and trading goals. My fundamental trading methodology has not changed, I'm still all about OsMA, divergence, candlestick patterns, and S&R. My knowledge of OsMA, risk management, and trading in general has increased (as it should). The day you lose the drive to stop learning, close your account!!

The first and probably most fundamental change I've made is to TF. I look at ONLY H4, Daily, and Weekly charts. Whereas before I was on the M30, H1, and H4.

Second, I only use two OsMA indicators instead of three. I use the current TF and the one above. So for the H4 TF, I use H4 and Daily, or for the Daily chart I use the Daily and Weekly OsMA. However, for chart cleanliness I show only the current TF. One of the advantages (and there's many) of trading longer TF's is there's plenty of time to do analysis. Also, I have removed the 21 MA and left just the 50 MA

Third, I have incorporated RSI with only a 50 line. I'll explain my thoughts on that in another post.

Fourth, I trade 18 currency pairs and gold and silver too. I'm not gonna list them, as you'll see them as I post more.

Lastly, my entries have been tweaked a bit

My plan is to continue to post and support my thread and its interested users with updates, trade ideas, trade plans, thoughts, and whatever else anyone would like to know or see.


The indicator attached in the first post of this thread is the same one I use now. There has been no changes. If you are interested please go there and download it. Thanks!! Good Trading!!

------------------------------------------------------------------------------------------------------
Any chance you could make a change to eliminate the alternating colors coming down above the line and going up above the line?

 

[Lawrence Burrows]

Any chance you could make a change to eliminate the alternating colors coming down above the line and going up above the line?

[email protected]

 

[chaplainjb]

How do I view your charts?

hey mate

have you ever considered using a Forex strengthmeter alongside your analysis ?

you can always identify the behaviour of the 2 currencies in the pair you are targeting then.....and answer the questions you were asking above on USD and Euro behaviour :smart:

N

Your charts are small. How do I view them?

 

[Idude]

Your charts are small. How do I view them?

I was up to ask the same question, it looks like the original size of the pictures were removed rendering this thread useless unless he repost them. I would like to see what his game plan his but it's impossible unless I can read whatever you wrote on those shots in the beginning of this thread.

 

[zackv]

Hi.
Please add me to your private list because I also am not able to see the attached pictures.
Thanks in advance!
Zack