10.2 Definitions - Foundation for the Future

[Bunker]

Trend Reversal = pivots flipping order. ie dwm to mwd.
Trend Reversal = tma going from above .4 to below -.4 on daily and vice versa

Until those are confirmed then anything else is a retracement IMO. If you want to try and predict a trend reversal sooner than the above confirmations then use a lower TF tma to get in counter trend and hope it turns into a trend reversal on the upper TF tma.

Thanks Jemook,

I updated post one with this definition.

Cheers!

Bunker

[Bunker]

Hi Bunker,

First of all congratulation for your posts. I will keep on following it.
I really love that indicator in the right up corner of your main screen, where it shows the
H1 H4 D1 solpe values. I tried to find on this forum but somehow I was not succesfull.
Could you please share it or let me know where can I find it ?

Thanks,

Keep it up
Szabolcs

Voila

Just make sure that "ShowCurrentPairOnly" is set to True.

Bunker

[Jemook]

Please note: that indicator doesn't have the AddSundayToMonday fix included. If your broker messes with Sunday candles then it may not show the correct results. You should refer to Baluda's indicator if you want the corrected values.

[Jonathan2FI]

Bunker,
as per last post - had a Brain Wave of a slope direction EA following your reply that follows the trend and enters and exist on H1 slope extensions.
Strategy Defined
Definitions: Chart Tf H1 Indicator NT TMA True SlopeHisto MTF; Htf D1, Ltf H1,
Use Slope X Trigger Level SXTL +-0.8.
Htf slope direction defined by last change if Increase then take LONG trades
if Decrease then take SHORT Trades (NOT level dependent)

IF H1 STXL reached
THEN check Direction of Htf slope e.g. D1 to define if trade is Long or Short
Take Trade
Exit Trade when next H1 SXTL reached
Repeat

Visual back testing of USDCHF 20/4/2012 to 20/7/2012 3 months
+1450 pips 30 Trades 8 lose 395 pips 22 win 1845 pips
Note no allowance for spreads or slippage !! So optimistic
(Steve tried to attach pic demonstrating strat but got "bmp not allowed")

What I like about this is obviously profitability, good no. of trades, keeps you in the trend, smooth equity curve, customizable to handle diff characteristics of other currency pairs (X levels), market changes and potentially time frames - a few more details to add to make this a complete trading system... could be on the way though
Jonathan2Fi

[Bunker]

Bunker,
as per last post - had a Brain Wave of a slope direction EA following your reply that follows the trend and enters and exist on H1 slope extensions.
Strategy Defined
Definitions: Chart Tf H1 Indicator NT TMA True SlopeHisto MTF; Htf D1, Ltf H1,
Use Slope X Trigger Level SXTL +-0.8.
Htf slope direction defined by last change if Increase then take LONG trades
if Decrease then take SHORT Trades (NOT level dependent)

IF H1 STXL reached
THEN check Direction of Htf slope e.g. D1 to define if trade is Long or Short
Take Trade
Exit Trade when next H1 SXTL reached
Repeat

Visual back testing of USDCHF 20/4/2012 to 20/7/2012 3 months
+1450 pips 30 Trades 8 lose 395 pips 22 win 1845 pips
Note no allowance for spreads or slippage !! So optimistic
(Steve tried to attach pic demonstrating strat but got "bmp not allowed")

What I like about this is obviously profitability, good no. of trades, keeps you in the trend, smooth equity curve, customizable to handle diff characteristics of other currency pairs (X levels), market changes and potentially time frames - a few more details to add to make this a complete trading system... could be on the way though
Jonathan2Fi

Hi Jonathan2FI,

Thank you for your post.

I really think the future of this thread (and many others) will focus on Slope direction instead of Slope value and that’s why I really like your idea. Too bad you couldn’t attach the file (I’m a visual). But I think I got the gist of it (try to save it as a GIF, PNG or JPG).

What I like about it is how you use D1 as a filter to prevent trading in the wrong direction. I will also be testing a similar strategy this week and come back with my findings.

So if I understand, if (let’s say for a LONG scenario) D1 increase compared to last value (last value ? or value from previous day ?) you are using H1 > 0.8 to trigger and your exit strategy is when PA goes back to 0.8 ? Is that correct ?

[Jonathan2FI]

Bunker,
That is exactly right. - I know what you mean about seeing this visually! see attached
The D1 filter acts as filter to get you trading in direction of trend (risk adverse!)
The H1 slope cross of either +0.8 or -0.8 triggers buy or sell OR if you are already in trade it triggers the exit see pic.
Trade 2 the red arrow was the only loss on the screen see that the D1 slope moved up on 27th June therefore it was signalling UT it only moved down at 2300 on the 27th and therefore trades shortly after that was triggered as a short.

see it visually (using maximum creativity) - test it visually - fully list rules.. if then..., code it, back test, opti and go live.

I must admit I like the front end and back end of the process but can manage the stuff in between however collaboration wins every time.
Cheers Jonathan 2FI

[Bunker]

Bunker,
That is exactly right. - I know what you mean about seeing this visually! see attached
The D1 filter acts as filter to get you trading in direction of trend (risk adverse!)
The H1 slope cross of either +0.8 or -0.8 triggers buy or sell OR if you are already in trade it triggers the exit see pic....

Hi Jonathan2FI,

So from your picture, it seems like you open trades from the Outside-In of the H1 0.8 ? (I didn’t get that the first time). Also, you drew vertical lines on the H4 Slope (blue line) on the right side when crossing 0.8 and 1.0. Was that on purpose? and your 3rd vertical line (from the left) seems to coincide with the H1 crossing 0.4…

Can you confirm if I got it right ? Would the picture below be 2 BUYS ? (taken when D1 slope was rising). If that’s the case, the trade between the blue lines would probably be a BE whereas the trade between the green line would end up being a loser.

But I didn’t attach this picture to look at these 2 specific trades but more to look at the missing opportunities. These 2 trades were done on a 1 week period. But there seem to be 5 or 6 valid trades in between (based on the D1 direction). This is only my first impression but maybe the trigger can be tweaked so it is quicker and therefore you could have benefited from the last bearish candle (since D1 slope was decreasing).

However, from the picture you attached, it seems like there is a potential for a good ratio win/loss with your strategy so I am looking forward to see the results by the end of the week.

Thanks for sharing your strategy and please, keep us posted!

Cheers!

Bunker

[Jonathan2FI]

Hi Bunker,
the blue vertical lines should line up with h1 crosses at +-0.8 triggering a buy sell dependant on last D1 slope direction if up in last move then buy if down then sell - with exit on next H1 cross at +-0.8 level. Far right blue line should be on H1 price action was missing off chart but it did cross when I went back and checked.
As per your example, it traded at BE and this shows the strats weakness in range- although when it does get caught on the wrong side no big downside. Needs to be checked..
Cheers
Jonathan2FI

[Bunker]

Hello Fellow Traders !

I have been analyzing the H1 Slope for the last couple of days and I realized that in conjunction with LWMA 5.1 on H1 TF, it provides an indicator that is pretty close to MACD (5,16,9).

On a H4 TF, H1 Slope combined with LWMA 21 also provides an indicator that looks a lot like MACD (5,16,9). I actually use this combo to validate the MACD trigger.

If you look at the first picture below, when there is a MACD crossover, the H1 Slope will confirm the trade most of the time by crossing the LWMA 21 in the direction of the MACD crossover at the same time.

Now if you look at the vertical blue line (left one), the H1 slope was NOT crossing the LWMA 21 and in addition, was pointing in the opposite direction. I waited for the Slope to change direction and after it kissed the LWMA, I took the trade (2nd blue line). So far, it has been a good filter when used that way. Also note that PA is also aiming for the DP (if not crossing it) when MACD crosses.

What is not on the first picture below is the D1 Slope (I removed it so you can see the crossover of the H1 slope and the LWMA) . I use D1 slope as a second confirmation for the direction of the trade. So I added a second picture to explain the full strategy. Here it is:

Green vertical line (the good candidates)
- MACD crossover
- H1 Slope crosses LWMA 21
- Last D1 move was in the right direction (see square in blue)

The red vertical line (not a good candidate)
- MACD crossover (OK)
- H1 Slope is NOT crossing LWMA 21
- Last D1 move was NOT in the right direction (see square in blue).

So far, I have been successful with this strategy and I don’t have to wait for D1 to be > or < than 0.8.

Cheers!

Bunker

[mobthehop]

Here is a recent post from zznbrm over at his FF thread:

http://www.forexfactory.com/showthread. ... ost5898701

Q1) Does the TmaSlopeTrue measure the slope of the LWMA or the TMA?

As I have stated previously, the TmaSlopeTrue indicator measures the slope of the TMA.

See the screenshot below. The 1st indicator window shows the slope of the LWMA. Compare that to the slope of the Tma in the 2nd indicator window. The LWMA slope is more "jagged" than the Tma slope. Why? Because the algorithm used in the TMA "smooths" the previous value whereas the LWMA does not use any such smoothing algorithm.

Q2) Why does the MACD look very similar to the TmaSlopeTrue?

It really just boils down to the math involved. All of these indicators are based on moving averages. So they are all going to look similar, depending on the parameters used. This is why there is nothing magical about the Tma Slope - it is just a different way of calculating the difference between two moving averages.

See the screenshot below. The 3rd indicator window shows the MACD with settings that correspond to the Tma slope in the 2nd indicator window. They are very close. Why are they not exact? Because of the differences in the formulas used. Why are they very close to each other? Because they are both based upon the same moving averages.