Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

walterw

What Really is Momentum ?

Recommended Posts

So the big question would be, what inputs could be interesting to see in a ES 3 minute charts for momentum filtering... well this weekend I played arround with some ES charts and seem like +1 -1 threshold inputs with very same 0.02 alpha input looks quite decent...

 

In some very sporadic events, it may signal momentum but not the correct direction of trend as I show on attachments here...

 

I attach the TOS code, with the default parameters for EUR/USD... ( to be applied on a 3 minute chart ) cheers Walter.

5aa71020021bf_es1.thumb.png.ce3b2c0d7d35be12f883db03d6a73122.png

5aa710200e43d_es2.thumb.png.80f6d9a203bf5a8ac6681f42189e8ebd.png

5aa7102016dc1_es3.thumb.png.a0dd656c0bed69bd4d2dd8dfc631344d.png

5aa71020242a0_es4.thumb.png.dddceadb76a60b3887421dfa2febda34.png

TCC for TOS.txt

Share this post


Link to post
Share on other sites
So the big question would be, what inputs could be interesting to see in a ES 3 minute charts for momentum filtering... well this weekend I played arround with some ES charts and seem like +1 -1 threshold inputs with very same 0.02 alpha input looks quite decent...

 

In some very sporadic events, it may signal momentum but not the correct direction of trend as I show on attachments here...

 

I attach the TOS code, with the default parameters for EUR/USD... ( to be applied on a 3 minute chart ) cheers Walter.

 

Ha ha ha …Strange must be some telepathy involve, in May I had similar thinking about momentum, it was a kind of day where you threw a lot of indicators on the chart to realise you’re going nowhere, looking at a 2 tick range bar chart intending to scalp the ES, trying to avoid the small pullbacks which often are part of little consolidations, by drawing rectangles to encapsulate those areas where no clear advance or decline moves were occurring and noticed that I could delimitate those areas on an AO the oscillator by using 2 tuned lines close to the 0 line as described in this thread.

Entries could be:

Go long at the cross up to the upper line and short at the cross down to the lower line, outcome:

1- Benefit from a nice move.

2- Not enough momentum to be profitable.

3- After a cross the move reverse against you and it is a stop out.

 

This method triggers a lot of losing signals; I believe some filters need to be implemented.

Cheers,

Always please to read your posts.

Share this post


Link to post
Share on other sites
Ha ha ha …Strange must be some telepathy involve, in May I had similar thinking about momentum, it was a kind of day where you threw a lot of indicators on the chart to realise you’re going nowhere, looking at a 2 tick range bar chart intending to scalp the ES, trying to avoid the small pullbacks which often are part of little consolidations, by drawing rectangles to encapsulate those areas where no clear advance or decline moves were occurring and noticed that I could delimitate those areas on an AO the oscillator by using 2 tuned lines close to the 0 line as described in this thread.

Entries could be:

Go long at the cross up to the upper line and short at the cross down to the lower line, outcome:

1- Benefit from a nice move.

2- Not enough momentum to be profitable.

3- After a cross the move reverse against you and it is a stop out.

 

This method triggers a lot of losing signals; I believe some filters need to be implemented.

Cheers,

Always please to read your posts.

 

Hi Trendup, yeah that could be a very oversimplified way of using just one indicator to create a complete method... I think this particular indicator would not merit so many functions... so I personally would not advice to try to do that... even the indicator has proved wrong on some ocations in terms of trend...

 

Now what I see interesting is the use of this indicator as a plain filter of momentum to other more elaborated ( higher edge ) methods... just as a green / red light to your normal trading...

 

Let me post how we did today on next post, cheers Walter.

Share this post


Link to post
Share on other sites

So EUR/USD momentum filter conditions... there where very clear conditions on the pre-US Session and so far on the US session was very nice momentum as well... on the Euro Session there wher a couple of important down momentum scenarios, nice cool scalping there...

martes27euro3min.thumb.png.226021f6ff36e49a5883229d7a3beeb5.png

Share this post


Link to post
Share on other sites

So lets take a peak on ES today... the pre market was very chopy... the indicator was well inside the threesholds... then during the US session we had a nice 10 point move in momentum...

 

So you see its nice to have some sort of filtering... it may give you some aditional edge eventually... let me look at some other instruments...

martes27ES3min.thumb.png.60e95ec72d2d26fb438217d98d6418ae.png

Share this post


Link to post
Share on other sites

For example, lets take a look on the USD/JPY ... it was a very nice momemtum filtering condition...

 

So far inputs are like this :

 

for all alpha its being 0.02

 

and for

 

EUR/USD +- 0.0005 ( once typed will appear as 5.OE-4, just hit enter )

USD/JPY +-0.02

ES +- 1

 

Will soon share TS code.. trying to fix a bug on it, cheers Walter...

 

PD If trading is stressing you out, rethink you RRR and just eat a good banana as the chimp does.

 

attachment.php?attachmentid=21822&stc=1&d=1280253846

martes27usdjpy3min.thumb.png.04a1bfd11d15c9f3ee343d38d66b4e1f.png

chimpbanana.jpg.258bd70e6f631cefd00edf49c76bcb96.jpg

Share this post


Link to post
Share on other sites

Usefull method..indicator to determine correct momentum condition to trade the

 

chimp method or another, when we realy need in strong inertia of the market, I begin better

 

descerning when trade or not by the chimp. Thank you Walter. :) Let me share indicator,

 

which I find on net, make little bit changes in code and now it looks same as on

 

thinkoswim.

 

p.s for NT.

NTCC.zip

Share this post


Link to post
Share on other sites
Usefull method..indicator to determine correct momentum condition to trade the

 

chimp method or another, when we realy need in strong inertia of the market, I begin better

 

descerning when trade or not by the chimp. Thank you Walter. :) Let me share indicator,

 

which I find on net, make little bit changes in code and now it looks same as on

 

thinkoswim.

 

p.s for NT.

 

I'm interested in having the easy language version of the indicators supplied in this thread.

Kit could u post a screenshot.

Thanks

Share this post


Link to post
Share on other sites
Usefull method..indicator to determine correct momentum condition to trade the

 

chimp method or another, when we realy need in strong inertia of the market, I begin better

 

descerning when trade or not by the chimp. Thank you Walter. :) Let me share indicator,

 

which I find on net, make little bit changes in code and now it looks same as on

 

thinkoswim.

 

p.s for NT.

 

Glad Kit you like it, thanks for contribution to NT users, I will soon take a look into it... cheers Walter.

Share this post


Link to post
Share on other sites

Here goes the TS code... so far on the EUR/USD works exactly the same as on TOS, but strange thing its not similar on ES... I am working on that issue, any further help on this issue will also be apreciated... cheers Walter.

 

PD the TCC name stands for threshold cyber cycle.

 

Defaults inputs are for a 3 min EUR/USD chart...

TCC.ELD

Share this post


Link to post
Share on other sites
I'm interested in having the easy language version of the indicators supplied in this thread.

Kit could u post a screenshot.

Thanks

 

Here it is. Hope I correct understand you :)

5aa710214811d_EURUSD29_07_2010(3Min).thumb.jpg.f70518b78504279f9837eed06fb1097c.jpg

Share this post


Link to post
Share on other sites

Hi everyone, seems some interaction starts to kik in ¡¡ like to see your inputs guys...

 

So lets see how we did on EUR/USD an ES yesterday and today...

 

In the case of ES, it is very clear how today thursday momentum did show its teeth... diferent to yesterday as it has being more hovering arround the threshold box... cheers Walter.

5aa710217329b_euromiercoles.thumb.png.7238cf95b36b28e1652390e080b8b71d.png

5aa710217bb9c_eurojueves.thumb.png.f45773c5a4d13925dd5a9287652d91e9.png

5aa7102184bbc_esmiercoles.thumb.png.5ea9ba98f7cb9b19c77b334a1ed03019.png

5aa710218d024_esjueves.thumb.png.963d2dfa1ba042faf792ad12b7f74fe6.png

Share this post


Link to post
Share on other sites
I could compile TCC to OEC, if someone wants to play with it :)

My first tune up for ESU0 Alpha 0.01 lines 0.30.

 

Hi Trendup, have you noticed that the TS indicator gets capped at a max of +- 1 when plotting... the TOS version does not do that... still looks nice and the alpha 0.01 and +-0.3 input you suggest looks pretty decent... it clearly called todays nice down move... cheers Walter.

5aa71021921a9_ests.thumb.png.8767b95aaaaf0774e3e9a683494722ba.png

Share this post


Link to post
Share on other sites
Hi Trendup, have you noticed that the TS indicator gets capped at a max of +- 1 when plotting... the TOS version does not do that... still looks nice and the alpha 0.01 and +-0.3 input you suggest looks pretty decent... it clearly called todays nice down move... cheers Walter.

 

It is capped by design, look at the PDF.

The TOS/NT version must be different.

The Inverse Fisher Transform.pdf

Share this post


Link to post
Share on other sites

Momentum is totally real but i just can't trade it...

Its like jumping in with fools, knowing you are a fool to do so yourself..

Just don't see how you get good position on the other fools..

Seems to me to be an easier fade probability wise.

Share this post


Link to post
Share on other sites
Momentum is totally real but i just can't trade it...

Its like jumping in with fools, knowing you are a fool to do so yourself..

Just don't see how you get good position on the other fools..

Seems to me to be an easier fade probability wise.

 

Are you actually making money with all your theories? Are you trading at all? Just curious...

Share this post


Link to post
Share on other sites

This kind of stuff seems very similar to a concept I played around with using the ADX... except that it was really looking for areas to enter at when there was no momentum (thus trend reversal might be more probable).

 

I'll repost it here and see if you can see some of the parallels. Its using the same kind of momentum principals but I suppose in the opposite way. I guess what I would bring to the table as a question is what is the benefit or advantage of the momentum indicator over a standard 14 period adx?

 

Please bear in mind I made this post years ago and does not currently represent how I trade.... I still find the concept interesting though.

 

Recently i've made somewhat of a paradigm shift in how I trade (and simplified things about 10x's over) but I wanted to share a small observation I have made concerning "trending" markets and ADX readings.

 

First off, let me preface this by saying if you are a pure trend trader looking for MA cross overs or something into a bigger trend then this might not help you. For the rest of us going short and long based off S/R, trendlines, or Fibs then this will be relevant to you!

 

Ok, so we are all told from various software vendors, trading forums, trading websites, educational vendors that the GOOD trades are in trending environments correct? We are told to wait for the ADX to be > 20 to take a trade? Because then we know the market is trending right? I'm here to argue that this SIMPLY IS NOT TRUE. In fact - its the opposite.

 

I argue that the prime time to look for entries is in fact when the ADX < 20 and by definition the market is NOT in a trend. Think about it like this: If you are getting into a move when the ADX > 20 you are by definition jumping into a position after price has ALREADY MOVED A GOOD DISTANCE IN ONE DIRECTION. Thus, its probability of that trend stopping and a reversion to its mathematical mean is much much more likely which means a move against you is much much more likely as well.

 

Now on the other hand, by getting into a trade when the ADX < 20 we are saying that we want to be in the move BEFORE ITS OCCURS and let us make profit while the ADX is increasing and the TREND is increasing.

 

Here are some examples from Friday on the EURUSD 1 minute chart. The indicator on the chart shows nothing other than a GREEN BAR if the ADX < 20 and a RED BAR if the ADX > 20. i.e. we only are looking for positions when there are green bars.

 

First thing to note - IF you trade like this it will be some of the easiest most carefree trading you've ever done. Why? Because ADX filters 70-90% of the price action on most days. And you sit and wait without a care in the world. I have the indicator set up to alert me when the ADX drops below 20 so I get a message saying pay attention and then we look for trades. This will DRASTICALLY reduce trade amounts, increase efficiency, reduce commissions, and eliminate the possibility of overtrading a market. Lets face it folks - most of us aren't good enough to be 100% on every swing 100% of the day. It gets us into trouble and we all know it. So why fight it? Especially if you can filter 70-90% of the day and only focus on tiny points on the chart where the probability for a trend developing is in your favor?

 

I apologize for the size of these charts but nothing peeve's me more than someone posting a chart example thats too small to see. You should have no issues here.

 

These examples will be nothing more than trendline breaks snapped to a Pivot High/Low reading on the charts. Entries on breaks of the trendlines with the ADX < 20. NOTHING ELSE. You decide the management and targets but it would be pretty hard to lose money here.

 

14mxvm8.png

 

You are jumping in at the momentum shift BEFORE THE TREND OCCURS.

 

Now take a look at the entries where the ADX > 20 and the pundits would like to tell us its a GREAT TIME TO LOOK FOR TRADES. Almost everything loses.

 

2qbt3d0.png

 

Coincidence? That's for you to decide. I don't think it is coincidence. In fact this is exactly how I trade from here. ADX and trendlines. Call it a day and make money. Only we can complicate the hell out of it "looking for the trend". The truth is the trend is relative, and thus WE DEFINE IT. And if that's the case, everyone else has a difference definition and no one can be right or wrong. So why bother? Swing your middle finger up at the "trend" and forget about chasing it. Its a fruitless effort and a lie, and one that hasn't made too many of us rich.

 

Think its a fluke? Go look at it yourself. I'm sure someone here can code up a similar indicator in MT4 with alerts in no time.

 

ADX and trendlines. The only tools you need to make yourself rich.

 

Cheers!

Share this post


Link to post
Share on other sites
Momentum is totally real but i just can't trade it...

 

 

Yea... trading its not for everyone... and yes, we are fools with full wallets jajaj... :haha: :haha:

Share this post


Link to post
Share on other sites
This kind of stuff seems very similar to a concept I played around with using the ADX... except that it was really looking for areas to enter at when there was no momentum (thus trend reversal might be more probable).

 

I'll repost it here and see if you can see some of the parallels. Its using the same kind of momentum principals but I suppose in the opposite way. I guess what I would bring to the table as a question is what is the benefit or advantage of the momentum indicator over a standard 14 period adx?

 

Please bear in mind I made this post years ago and does not currently represent how I trade.... I still find the concept interesting though.

 

Hi Daedalus, the system looks pretty nice, still sounds contrarian in style... normally that will do very well on expanded cyclical markets aka: wide coils type markets...

 

Some times you have it, sometimes not... I use to scalp for many years cyclical trades on futures just using S&R... but lately markets are more trendy and like to stik with a non- contrarian aproach... thanks for this very nice contribution ¡¡ cheers Walter.

Share this post


Link to post
Share on other sites
It is capped by design, look at the PDF.

The TOS/NT version must be different.

 

 

yea ¡¡ interesting the original one actually its capped between +-1 ... so seems the TOS version may be diferent then... thanks Trendup for clarifying this, cheers Walter.

Share this post


Link to post
Share on other sites

So lets see how the fools made some money this friday on EUR/USD and ES... using some good momentum filters... it was so hard for the chimp, he just had to make a banana split with hot chocolate fudge ¡¡¡ jajja cheers Walter, and have a good weekend all you good people

5aa710223ceaa_euroviernes.thumb.png.1029659bfa4edd2429162e0d8e70a849.png

5aa7102245f6b_esviernes.thumb.png.d2cbcdc184728eb9db5a3467f69c1ff5.png

Share this post


Link to post
Share on other sites
yea ¡¡ interesting the original one actually its capped between +-1 ... so seems the TOS version may be diferent then... thanks Trendup for clarifying this, cheers Walter.

 

After reading the documentation :) I realised the plot command for the uncapped cycle was missing. Also I changed Price(close) to (High+Low)/2), alpha to 0.07 and lines to 0.50 to comply with the original code. All parameters can be adjusted from the properties window.

According to the doc and code design, it is interesting to note that the bottom line is the buy signal and the top the sell trigger as in conventional oscillators.

Have a good weekend.

 

The file TCC.EL (zip) is the compiled version for OEC platform.

attachment.php?attachmentid=21881&stc=1&d=1280534706

TCC.zip

TCC2.txt

TCC2cycle.thumb.PNG.cd2d4ce2dc478da64940863cdf1d7c71.PNG

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date : 21st January 2022. Market Update – January 21 – Stocks Sink – Netflix & Peloton Crash. Stock markets sank again (Nasdaq -1.3%) Tech companies led the slide, (Peloton -24%, Netflix -18% post results. USD firmed as Yields & Oil dipped, Gold held onto to gains. Markets are nervous and risk aversion has picked up as investors eye shaky earnings, and waning confidence, with mounting tensions over Ukraine adding to geopolitical tensions. US Weekly claims hit a 3-mth high, EZ Inflation was an ATH and North Korea said it may resume testing its nuclear arsenal. Asian markets and AUD & NZD lower (AUDJPY -0.62%) ASX 200 (-1.2%), Nikkei 225 (-1.8%).   USD (USDIndex 95.65) ticks higher slips as Yields decline . US Yields 10-yr moved closed at 1.83% & trades at 1.785%. Equities – USA500 -50 (-1.1%) 4482 – USA500 FUTS lower again at 4467. USOil – Fell below $82.00 afrom highs at 87.95 on Wednesday, Inventories increased by 0.5m vs 2.3m drawdown. Gold – held on to gains topped at $1848 and holds $1838 now, holding the key 1830 support. Bitcoin under $40,000 back to test $39,000, FX markets – EURUSD back to test 1.1300 – 1.1322, USDJPY now 113.80 & Cable back to 1.3570, the week’s low. Overnight – UK Retail Sales plunged -3.7%, Consumer confidence slipped 4 whole points to -19 and Japanese core inflation was inline at 0.5%. European Open – The 10 US Treasury yield is up from overnight lows, Bunds are also finding buyers in opening trade, and the 10-year continues to shy away from turning positive, as ECB officials continue to push back against speculation of an early rate hike at the end of the year and market sentiment generally turns cautious. DAX and FTSE 100 future are posting losses of -1.4% and -1.1% respectively. Today – EZ Consumer Confidence, BoE’s Mann; ECB’s Lagarde, BoJ’s Kuroda Biggest FX Mover @ (07:30 GMT) EURNZD (+0.66%) Rallied from 1.6675 yesterday to breach 1.6800 now. MAs aligned higher, MACD signal line & histogram higher. RSI 73 OB but still rising, H1 ATR 0.0026 Daily ATR 0.0100. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HotForex Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Stuart Cowell Head Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Best way to make money is forex trading however it still requires a lot of hard work needed to build necessary skills which are required to earn money from forex.
    • I bet he was referring to acquire all the basic necessary skills needed to start earning money from the forex trading.
    • Yes agreed we can do forex trading as part time in the start and when we learn trading we can switch to full time trading.
    • You will only earn from forex trading if you know how to trade and when to trade otherwise you will only enter this market to lose money.
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.