The Chimp`s "Forex Trades"

[sundowner]

Hi PYenner,

I have spent some time tweaking the use of your indicators this week...no luck with new ones. Please have a look at these charts and this indicator I have attached and see what you think. Here’s the thread for the indicator:

http://www.forex-tsd.com/suggestions...ba-thesis.html

I think the poster is looking for input/guidance.

Here’s my template if you want to spend some time scrolling back and forth to see what I have been looking at recently. I have been impressed with how well your indicators work with Walter’s trading strategy. I have been watching the returns to the blue vma (12) green (6) yellow (4) and the subsequent bounces on the 60 minute chart.

…still trading in the direction indicated by the 60 minute chart, taking trades from the 15 minute chart.

If you are still interested in working with mt4, I would really like to see the adxvma 7.

The other thing I’m wondering about is support and resistance. Hand drawing the lines is a pain but seems particularly good for the longer tfs. I have explored the use of numerous s/r indicators, but none really fit the bill. Any ideas?

No worries if you’re otherwise occupied.

Have a nice weekend.

Regards

[PYenner]

Originally Posted by sundowner The other thing I’m wondering about is support and resistance. Hand drawing the lines is a pain but seems particularly good for the longer tfs. I have explored the use of numerous s/r indicators, but none really fit the bill. Any ideas?

Have not got into s/r yet.
One by Coders Guru http://www.xpworx.com/ZigZag_Channels.htm
Still looking at the rest...
My own approach is that bid and ask volumes can be monitored separately and can be added for average volume or compared for strength comparisons.
Differences in bid and ask volumes come thru as margin spread, something which I see happening most often in EURJPY but also in GBPUSD and in both cases that spread comes thru magnified in GBPJPY. That aspect is one of my current interests as it may signal which way the price will break.

[PYenner]

Sundowner
Thesis is an interesting thread and my impression is that the critical observations have obvious truth to them, macd and rsi do not have a compatible basis in their forex forms for combining as Thesis did. This is likely to be a translation defect not a defect in the original thesis. Also agree that the ranges of the two are incompatible and may only be compatible when used on a pair where they happen to be almost compatible. So the bias favouring long does not surprise me. These problems are probably fixable.
What also worries me is the dogs breakfast in the formula (Stochastic*(MACD+RSI)/Momentum). If this really was an MBA thesis then the maths behind that should be sound... but from memory (only) Macd may be one of those "big swingers" that makes no attempt to calibrate itself to the pair in use, ADX also makes this most basic mistake, no attempt made to ensure they work in one pip units on any pair.
So along the lines that others have said, before macd and rsi can be combined, they must both calibrate themselves to 1 pip steps on any pair (non standard versions of both may be needed), they both have to be in forms that swing about a zero line (non-standard for at least one of them) and they have to have compatible swing ranges.... otherwise it is all total cr*p and a waste of time. The short way of saying the same thing in my own way of saying it... all four variables may need to be normalized to a +1 to -1 range before combining them is mathematically sound, so I expect MBA used them in a normalized form in his original version, mathematical types think in normalized terms, its an essential basic to their thinking, the alternative is just not an option.
The formula looks less suspicious to me if it is rearranged as (MACD+RSI)*(Stochastic/Momentum) but everything then depends on the "periods" that are used particularly in Stochastic/Momentum which is the seriously interesting concept because it may be attempting to get an early warning signal out of an ordinary stochastic signal. Really need to hunt down an online version of the guys thesis which most likely does not exist online. Without that you are shooting in the dark.
The observation that it works on 1hr charts but not on 1min charts bothers me, it may be because of the "big swing" problem that comes from the instruments not being calibrated to work in pip units.
So there is not just one issue here but many, dogs breakfast, not a pretty sight. That Stoch/Momentum step is interesting and I would like to understand that part. But there are so many things that would need to be fixed first, its a big project, unfortunately the lack of a common systematic scientific approach to the design of "standard" instruments like adx macd and rsi turns it into a witches brew not sound chemistry.

Thanks for the interesting thread but the instruments need to be redesigned on a common systematic basis before they have a chance of being used in the Plug'nPlay way being attempted. That is the first step to turning indicators into science but I won't be making that step, I must get on with more pressing things unfortunately.
Regards
Bruce

[sundowner]

Hi PYenner,

Thanks very much for spending the time to look at the indicator and supplying such a detailed explanation of it's inner workings.

Sorry to have wasted your time with it though.

Regards

[PYenner]

Sundowner
Enjoyed the change of pace and subject.
They have some good lively minds at tsd but I have avoided the temptation of working thru the threads, too many distracting thoughts.
See they are looking at fisher transform, don't know if they also play with fft (fast fourier transform) but those transform things are powerful if only indicators had a more scientific basis. In electronics there are books written on the use of a single transform (there are many) and they are fundamentally useful for turning a complicated problem into a simple problem with a simple answer. What Walter is doing, using volume as one axis on a chart in place of the time axis, that is a dimensional transform, it gives a different view of the same setup, a cleaner view is a better view. The fisher transform can do a similar thing, but it needs to be approached in a systematic way and you need first to do transforms of each of the common tools like emas, design the indicator using those transformed versions, then do the reverse transform of the components to get back to the real world indicator design. I no longer have the brains or the time to into it but it tempts me, it nags at me like midas does with the volume transform thing. The more I look at it the less likely it seems that forex volume will properly support the midas thing, but I still feel forex volume has something positive to offer, even if it isn't the thing we most want.
Sorry for rambling on.
Cheers PY

[walterw]

Interesting Posts Sundowner and Bruce...

I did look the mba thesis thread some time ago, looked very nice, even got contacted by jjk2 to look into aplications, now what I see is that what I looked was the first "crap version"... now he posted a new version wich really follows the swings much smoother and has an interesting leading effect... but dont see any edge other than the 0 line area...

combining momentum oscillators and making a salad of them finally gives a new hybrid momentum oscillator... I agree with Bruce that there is a lot of mathematical incompatible things there... now the interesting thing on this one is his presence on the 0 line previous to a posible long signal, where the author so far finds more clean signals from there to the long than from above to the down side... that 0 line and then take off looks interesting... wonder if it doesnt repaint...

I tested on 1 min and works ok to me... anyway he is not excempt from the same drawdowns any momentum oscillator has... cheers Walter.

[PYenner]

Walter
Someone suggested the path I would take with it..

Drop the macd part, subtract 50 from the RSI signal to make it symmetrical about the zero line...
It depends on how the Stochastic bit was done and I didn't look that closely.

That might get rid of the long bias...

But no-one seemed to act on the fix that had been suggested??

The only thought I had about repainting was when I saw a piece of code with two imaonarray()'s in the same loop, I had the impression each had to be in its own separate loop because thats the way the internal functions seem to use it, but as usual there is no documentation to explain the tricky doubts. I kept my mouth shut because guesses are all I have to go on and those guys know MT4 a lot better than I do.

An alternatve would be to use (Stochastic(RSI-50) + Stochastic(Macd))/mom since the stochastic tends to normalize each signal..??
Cheers B

[walterw]

Originally Posted by PYenner Walter Someone suggested the path I would take with it.. Drop the macd part, subtract 50 from the RSI signal to make it symmetrical about the zero line... It depends on how the Stochastic bit was done and I didn't look that closely. That might get rid of the long bias... But no-one seemed to act on the fix that had been suggested?? The only thought I had about repainting was when I saw a piece of code with two imaonarray()'s in the same loop, I had the impression each had to be in its own separate loop because thats the way the internal functions seem to use it, but as usual there is no documentation to explain the tricky doubts. I kept my mouth shut because guesses are all I have to go on and those guys know MT4 a lot better than I do. An alternatve would be to use (Stochastic(RSI-50) + Stochastic(Macd))/mom since the stochastic tends to normalize each signal..?? Cheers B

NO needs to loose time on this stuff... there is no real super edge there...

what sounded interesting to me is what you mentioned about bid and ask volumes... interesting... could this generate some synthetic delta ?

I know my next thread on forex (my pro-live aproach) will be a little upseting for some people, as I came all the way back to the vma basics and found it much more competitive than any fancy new research we did... still I like the idea of keep researching new things, happens that for live trading I like to be as much conservative and simplified as posible...

No needs to go more bald, we got all we need to succeed in the markets... maybe its time to get consistent on old good clasic vmar setups, so far Bruce thats where I am headed... Thanks for ALL YOUR GREAT CONTRIBUTIONS ¡¡ cheers Walter.

[sundowner]

Hi PYenner and Walter,

If you wouldn't mind, indulge me one more time and have a quick look at these charts... then I'll let things go. The basic concept here is classic support and resistance. My information comes from Martin Pring.

PYenner, what I have tried to do here is to illustrate some pretty classic analysis working with your indicators on the 60 minute chart. My inexperience makes precise definition of s/r, let's say uncomfortable, yet I have seen prices respect these (past) levels time and time again.

My opinion is that fundamentally the market is driven by psychology as even the shakers and movers in this market are human beings and respond to defined markers.

What I am looking for is indicators that will define the turning points, and yours do quite well...the other thing I have difficulty with is the draw down.

Profitable or not, correct direction or not, it's hard to watch the market move against you as far as it can and still hold on if you're using real money.

At any rate, I appreciate you taking the time.

Regards gentlemen

[unicorn]

Originally Posted by walterw this is a way to relax and enjoy the ride... no need to be permanently overthinking the concepts behind the setups, just a simple view of the setups its good enough to be looking for the right trades... Trading MUST be an enjoyable experience.. and simplification is one way to get there... cheers The Chimp.

Hello Walter;

I understand that the vma research has come to a conclusion regarding the trade setups.

A lot of versions have been developed: adxvma_12 bars, adxvma_16_bars, adxvma_6bars, adxvmatest3, you name it... and it is not clear which one is regarded as the best for this task.

I would very much appreciate your clarification regarding which is the final version of the vma indicator used for the setup and the timing,
AND the exact parameters used (because the charts posted do not show any parameters).

Perhaps a chart in Ninja Trader would help to clarify the final settings.

As always, your charts and presentations are appreciated.

Regards;
Unicorn.