Slope LEVEL -- or DIRECTION?

[hilavoku]

Hi NeoTrader,

thx for the info. I just edited my last post cause i mixed up Slope with TMA calculations. My first thought was that TMAtrue and LWMA are the same... So i understand that i look at the cross of the Slope value with the LWMA value and not the cross of the TMAtrue value with the LWMA cause TMAtrue is just a part of the Slope calculation...

dir auch ein schönes Wochenende (also a nice weekend to you)
Guido

[hilavoku]

Okay. Now i know what my problem is.

How can a LWMA of a currency which values will naturally be in the range of the last x values and always be greater then 0, cross an oscillating indicator like the Slope? Or do we take the LWMA of the last Slope values?

I have here a huge problem in understanding and read the last posts more than once. Can somebody help me here?

thx in advance
Guido

[garyfritz]

The Slope we all talk about is the current slope of the LWMA. Normally when you want the slope of a line between x1,y1 and x2,y2, you calculate it as (y2-y1)/(x2-x1). For our purposes we only look at the slope between the current and most recent bar, so (x2-x1) is always 1. Then, to scale it to a consistent range, we divide it by the ATR. (That's what puts it into the nice -1.5 - +1.5 range. Otherwise the range would differ for each pair, and for different volatilities.)

So basically the Slope is (ThisBarLWMA - PrevBarLWMA) / ATR.

[hilavoku]

WOW. Many thanks for your explanation!! Now i understand. Puuuhhh

[spotdespot]

WOW. Many thanks for your explanation!! Now i understand. Puuuhhh

Yes - I second that - thanks Gary.

[spotdespot]

Just thought I'd give an update after I posted the method I am using last week. Still looking very promising.

Cheers,
Dave.

[garyfritz]

That is a mighty impressive basket, Dave! Bet you wish you were trading live.

I'll have to take a closer look at this...

[spotdespot]

Yes! I am actually copying these trades to a very small live account now - I couldn't resist!

I think the market timing for this was perfect - significant reversals taking place over quite a few pairs when I first looked at the method. As you well know that doesn't happen very often so it may be that long term the baskets don't look quite that impressive. Having said that it certainly seems to be doing well!

[TallCoolOne]

Yes! I am actually copying these trades to a very small live account now - I couldn't resist!

I think the market timing for this was perfect - significant reversals taking place over quite a few pairs when I first looked at the method. As you well know that doesn't happen very often so it may be that long term the baskets don't look quite that impressive. Having said that it certainly seems to be doing well!

Hi Dave,

I have been using this method since 8/21. My basket is currently 716 pips. I'm going to open/close trades on the crosses.

[spotdespot]

Yes! I am actually copying these trades to a very small live account now - I couldn't resist!

I think the market timing for this was perfect - significant reversals taking place over quite a few pairs when I first looked at the method. As you well know that doesn't happen very often so it may be that long term the baskets don't look quite that impressive. Having said that it certainly seems to be doing well!

Hi Dave,

I have been using this method since 8/21. My basket is currently 716 pips. I'm going to open/close trades on the crosses.

I'm glad it's started well for you. I must admit I am still not sure about the closing of trades and I think there will be quite a bit of judgement calls based on other experience and looking back at how the pair has moved in the past. Take AUDNZD for instance. The last few swing high/lows have coincided with the peaks and troughs of the D1 TMA and not the cross. With the trades I have if I wait for the cross back over and it occurs on the current rally then all profits will be gone on those trades. However this may just be a retracement and the down trend may continue.

I think this is something that will come with experience and I will leave these trades to see what happens and learn from them. I am resigned to the fact that if I wait for the crosses or not some of the accumulated floating profit will be lost before the trades are closed - I can't see any way around that at the moment. However as the moves are generally pretty significant in size it shouldn't matter as long as I accept it psychologically!

GL.