[PAID Request] Price Action Momentum Indicator

[DigitalCrypto]

How to trade PAM indicator

REASON FOR EDIT: Updated rules and conditions for EA. I removed my version of the indicator as it wasn't coded correctly. Please use version 1.0 until further notice.

[youtube]https://www.youtube.com/watch?v=0fx5xpoTSBU[/youtube]

@Steve: I posted a back link from Youtube video to this forum.

Rules for EA
==========
The EMA is different for all pairs. This strategy works best with pairs that respect a 21EMA. GBPNZD for example would need a different EMA as it jumps around a bit. You can experiment with different EMAs for these pairs. Once you find an EMA that respects the uptrend/downtrend, then you could use that EMA as your guide for trading long/short.

Long Rules
==========
Price Above Daily open
Price Above Chosen EMA (21EMA(Close) is default)
Chosen EMA going up
Place limit order or market order 2 pips above the highest high PAM candle.
Place stop loss 2 pips below the low of that PAM candle.

Short trades are exactly the opposite

Exits
=====
Use a 2 or 3 candlestick trailing stop. Break even and partial close are up to you.
For scalping use your judgement on how you would like to exit.

Notes
=====
1) Works best on time frames below H1.

2)Do not fade the trading day. No counter trend trades back to daily open.

3)Correct PAM candles are the highest high or the lowest low of the last 21 candles.

4)Too tight of a trailing stop will get you out of the trade too early. When I trade scalps with it I would close if the current candle pulled back more than 40% from the low/high or began trading sideways without making a new low or high.




Indicators Used
==============

[SteveHopwood]

Really good and clear video David.

The EA is straightforward to create, but the indi is chaos and cannot be read by an EA - or if it can, then I do not know how. I will save myself the job of hand coding PAM candle recognition and wait until Rene intervenes.

[Peepaws]

I think it would be really cool to see this automated. I will be trying it manually when I can get the time!

Thanks for sharing!


EDIT: I am testing on H1 as I am more comfortable with setting by buy and sell stops and not having to manually manage as much as i would on lower timeframes.

I am setting up a buy or sell stop on the blue and red line respectively as long as they are in the direction of the trend and on the right side of the MA following the instruction in the video. SL is set on the dotted yellow line.
I am using 50 pips as TP, running on AU, EJ, EU, UC, GU, UJ as they have a spread of 3 or less.

I will let you know how it goes.

[DigitalCrypto]

Here are my test results for this afternoon. This is a test that's been running since 12 noon EST using only PAM entries and exits.

Please keep in mind that we did have a few heavy losses incurred prior to 12noon that were based on a different set of rules that proved to be unreliable as an EA.

[SteveHopwood]

David, the EA is up and running and has taken its first trade.

The only thing I do not get is this:

When I trade scalps with it I would close if the
current candle pulled back more than 40% from the low/high

So my question is: 40% of what?

[DigitalCrypto]

Well when I am scalping I don't have any rules other than best guess. So I tend to get spooked out pretty quick.

Here's a picture of a candle type that looks like it will be a PAM candle but it's the wrong color. Price will tend to push back up on green "hammers". This one pulled up 40% off the low. I'd exit the trade on that.

NOTE: This pic is just an example to explain how I would exit. It's an M1 chart so I can test. Not to be used in real money environment.

[SteveHopwood]

I cannot code '40% off the low'. It has to be 40% of something. That something needs a numerical value.

[DigitalCrypto]

An easy solution would be a 1:1 risk reward for taking profit so long as the candle wasn't massive due to news or other event.

[SteveHopwood]

Hehe. Guys, DC is a total star. I have worked with him on a private project and he is brilliant. As you can see from viewing the video, he is wonderful when explaining himself verbally. His chart pictures are a masterpiece of clarity. His written replies are total rubbish, so I give up on the 40% thingy and am moving on so:

New toy folks: http://www.stevehopwoodforex.com/phpBB3 ... 37#p134337

[Sandovich]

I cannot code '40% off the low'. It has to be 40% of something. That something needs a numerical value.

If I understand it correctly it is 40% of the distance between candle High less the Candle Low .

The formula I would use to manually calculate , because I can't code would be :

Code: Select all

For a downtrend :
Open(1) > ( Low(1) + ((High(1) - Low(1) x 40%) )     and 
Open(1) < Close (1) 

Uptrend
Open(1) < ( High(1) - ((High(1) - Low(1) x 40%) )       and 
Open(1) > Close (1)