Swingtraderkk » Tue May 31, 2016 9:28 am wrote:Bob,
Simply brilliant explanation.
Can I take it that your knowledge and practical experience is encapsualted in the OOTB settings? i.e. that the ootb 24 pairs is superior to all 28 pairs due to low volume/correlation/weighting issues?
It's not 24 vs 28 pairs that would not change much the comparisons. It's how they are being compared by the formulas in the indi and the ability to read those differences. Think of driving a car and coming to a stop sign. That stop sign is the zero line on the CSS indicator. When you take off from the stop sign or zero line, you begin to accelerate. On the CSS indicator when you pass the 20 line either north or south you are entering a trend. If you're inside either 20 line you are in range mode. Once you pass the 20 line you are accelerating fast enough to be trending. Once you understand this you realize that even though the line changes direction. You were not changing direction on the price chart. You are just slowing down in the trend. Once you realize this that the trend is slowing down you are still going trending in price action. Price action is still going but at a slower speed. When you get back to the 20 line you will then enter the range period. When you hit the stop sign again and the trend is over. If the 0 line is crossed trend direction is changing for that currency.
Other indicators that you look at you don't know this speeding up and slowing down action is happening. This is what makes the CSS indicator superior to the other indicators that do this. So understanding this concept helps you to understand what future price action is going to do. We know that sometimes fundamentals change quickly and of course this changes how we read the indicator. The indicator does not predict sudden fundamental changes. No indicator can do that. So we can be pretty sure what price is going to do in the future unless a big fundamental suddenly changes price action.
So once again I emphasize the zero line is the stop line. Price action accelerates past the 20 line. And then begins slowing down until it crosses back over the 20 line. Then it comes back to the zero line. Once it passes the zero line the strength of the currency is changing from positive to negative or from negative to positive. This is the overall view of a specific Currency as compared to the entire market or the other currencies you were comparing it to.
Then you have the second comparison of each line to each other. So now you compare the price action of one Currency to the price action to another Currency and you can read what the market is doing comparing those two currencies. Is one Currency accelerating/decelerating faster than the other Currency? Is one currency accelerating while the other currency is decelersting? Are they parallel to each other and which one is higher or lower than the other? All these things you can study and come to understand price action between the Currencies.
This helps you understand which currency pairs will go in which direction up or down and then you can decide when to enter and went to exit the trade. Once you learn how to read the CSS indicator your chances of becoming a very good trader go very high. No matter what system you use you have a leg up on all the traders in the market. I would study the CSS indicator for months and months and months until you understand all the intricacies Inside and out. If I were new trader I wouldn't trade again until I completely understood how the CSS works. It will help you to become a very successful trader. So why waste your money until you understand how this indicator works. I will use it with HGI but you can use it with any trading system and be successful. Good luck
