[Ingot54]

OT -

You may have already considered this, but it occurred to me that Williams %R may be an indicator that fits the criteria.

It should also be universally available.

Ingot

[optiontimer]

Originally Posted by Ingot54 »

I have been searching for similar indicators that match all (or most) brokers platforms, and I have come across these developed by Johne Ehlers:

I do not have Ehrlers Indicators and I do not know how they are calculated. What you have posted looks like it could work for you if applied it the same way I am using momentum, and if it works for you, I'd encourage you to use it. I will be choosing between stochastics and momentum/rate of change. Everyone should have access to these, and the calculations should not be as open to developer's interpretation as stochasticRSI apparently is.

Originally Posted by Ingot54 »

You may have already considered this, but it occurred to me that Williams %R may be an indicator that fits the criteria. It should also be universally available.

I like Larry Williams (at least the old time Larry Williams) and his book How I Made a Million.... But Williams%R is a bit counter-intuitive with its inverted scale (even Williams turns it over to illustrate its use in his book). And %R is actually %K turned on its head, so for this project, if I choose to use the stochastics formula, I will stick with the George Lane version rather than the Larry Williams version.

Thank you,

optiontimer

[optiontimer]

Here are some charts using an 8 period momentum indicator. If you do not have an indicator named "momentum," you should be able to substitute an 8 period Rate of Change. If we use this indicator, then our system would find oversold readings of <0 relevant only when the 21ema>65ema, and overbought readings>0 relevant only when the 21ema<65ema.

I have placed a red line on the "0" line.

Here is the perpetual chart of cotton which I had posted earlier in the thread, but this time 8Momentum replaces the 7stochRSI:



Here is the GBPCHF which also was posted earlier, again this time the 8 momentum replaces the 7 stochRSI:



And here is the EURUSD Futures, aka 6E, aka E6, with both the 8Momentum and the 7stochRSI. Blue circles are profitable entries, red circles are whipsaws, i.e. quick losses.

Momentum is somewhat more difficult to read quickly, but it does seem, at lest in this case, to smooth through minor momentum volatility and thus it has only two small quick losses to stochRSI's four quick whipsaws. I'm not at all sure that would always be the case. And we cannot let small losses bother us as there will be numerous small losses to be endured



I encourage everyone following along to check to see if they have access to the 8 momentum. Any comments would be appreciated, either here in the thread or through a PM. I am not 100% decided on this indicator as a replacement. For any interested in exploring the use of the stochastic formula, I am also considering an 8 period %K, with a 1 period smoothing and 1 %D

stochastic has the virtue of having a fixed 100 point scale. Momentum has the virtue of being a bit smoother through subtle shifts in the volatility of momentum

Of main importance is that both fit my criteria for visual clarity and ease of understanding. So, now I want to know if you all can get your charts to look like mine (and we can accept, of course, small variations depending upon session open/close/settlement times).

We'll talk more later,

-optiontimer

[rebyte2]

Hi OT and all......

This is proving to be an interesting and informative thread. Hope it continues for some time yet.

Looking at the GU daily with the required emas and the RS indy that Ingot has kindly supplied, i see that the PA under the emas and the RS turning south from its current position. Im also trialling a 150ema as an extra filter.

The price is currently retesting resistance at this level, suggesting a possible downside movement.

If this is a valid setup to the short side, where is the entry, or what do we wait for as a trigger?

cheers for the thread.

[rebyte2]

Hi OT......

Hold that reply(if you want) as i've re-read your earlier posts and it all comes home now.

cheers

[Avarice]

If I may be so bold I'd like to summarize what we got so far (this presupposes ofc that MOM8 is indeed the new star in the bar ):

IF :
(1) the 21 EMA is above the 65 EMA and
(2) the low of the current bar is below the 21 EMA and
(3) the high of the current bar is above the 65 EMA and
(4) the previous bar's MOM8 is lower than the current bar's MOM8 and
(5) the current bar's MOM8 is below 0
then and only then do we place a stop limit buy order at the current bar's high and let tomorrow's action take us into a long trade.

Likewise, IF:
(1) the 21 EMA is below the 65 EMA and
(2) the high of the current bar is above the 21 EMA and
(3) the low of the current bar is below the 65 EMA and
(4) the previous bar's MOM8 is higher than the current bar's MOM8 and
(5) the current bar's MOM8 is above 0
then and only then do we place a stop limit sell short order at the current bar's low and let tomorrow's action take us into a short trade.

Conditions (2) and (3) could use a bit of tweaking in order to take into account the notion of "slightly above / below" (see OT's post above) albeit I have to say that I like the "hard coded" version where you compare 2 numbers: one is either higher than the other or it is not. The notions of slightly, almost or near give room to human interpretation and we all know where that ends

Anyhow. What the above conditions do is to ensure that a trade is always taken in the direction of the longer-term trend and they time the entry in such a way that a position is only taken after a retracement or pullback has taken place. In essence, OT is betting on the continuation of an established trend and tries to get on board at a slightly better price than the sucker that jumped on the train when the retracement started. IMHO this is a very sound strategy and it should work out fine IF we (as in the participants in his next poll ) pick a decent tactic for placing the stops (and, eventually, a profit target).

I know that this post is mostly a waste of bandwith since everything I've said can be found in OT's posts. Still I wanted to sum things up so that (a) I'd be sure that I understood correctly what we're all talking about here and (b) to emphasize the importance of understanding thoroughly what OT is trying to do here. The basic concept is what is important and not what type of oscillator we'll use to time our entries (and I think OT demonstrated this fact by showing how interchangeable stochRSI, Momentum and Williams %R all are.)

Alright enough babbling from me, laters all.

[optiontimer]

The symbols below are the symbols used by my database. You can find the key in post #6 of this thread: Optiontimer's Trading Portfolio

According to our system, the status of our markets is as follows:

Up Trending: (21 EMA> 65 EMA)

AD, CU, FC, GC, JY, OJ, SB, SF, TY, & US

Down Trending: BO/ZL, BP, C/ZC, CD, CL, CT, DX, ES, HG, HO, KC, LC, LH, NQ, O, RB, S/ZS, SI, SM/Z,, W/ZW, YM

Using our original 7stochasticRSI, we have to sell short signals - August Crude (sell stop 93.16) and September Coffee ( sell stop 257.50). Using an 8 period momentum, crude would be a short sale, but coffee would not.

Sell stops based on an entry threshold of .1ATR10: In other words, take the current trailing 10 day Average True Range, then take 10% of that, and subtract it from the prior day's low to determine youe sell stop. It is arbitrary, but it is as good as any other, and probably better than entering on a one tick basis.

In each case, the required risk exceeds what we have determined to be acceptable given starting equity. The opportunities will present themselves, we just need to be patient.

I am looking at several alternatives to the stochRSI still. We will continue to build our base through the coming days, and soon we shall have our updated system finalized.

Thank you,

-optiontimer

[optiontimer]

Originally Posted by rebyte2 »

Looking at the GU daily with the required emas and the RS indy that Ingot has kindly supplied, i see that the PA under the emas and the RS turning south from its current position. Im also trialling a 150ema as an extra filter. The price is currently retesting resistance at this level, suggesting a possible downside movement. If this is a valid setup to the short side, where is the entry, or what do we wait for as a trigger?

BP, aka GBPUSD, aka GU, is downtrending according to our system, but it is not signaling any action as yet.

You are free to use whatever indicators or system you wish in your own trading, but for the purpose of this thread, we will keep it to the indicators we have selected, without need for any additional "filtering."

For our purposes her, up-trending/down-trending is determined simply by the relation of the 21 EMA to the 65 EMA.

Entries are signaled only by the overbough/oversold readings of our momentum oscillator turning back in favor of the up/down trend. We are currently using the stochasticRSI, but given the difficulties many have had in replicating the settings from my database, we will be selecting another momentum oscillator to replace the stochRSI. But that will be it - 2 MA's and one oscillator. Those are all the "filters" we shall need. One of the goals of this project is to help us overcome the desire to add filters ad infinitum to our trading.

I hope you continue to participate in our project, but please check any extraneous indicators and system elements at the door. You can always pick them up on your way out

Thank you,

-optiontimer