I have been trading this method for about a week but it has been in development for several months. It's designed for daytrading (not for scalping or position trading) which is the approach I am most comfortable with.
I have a reputation in certain quarters for being anti-indicator, probably because when I see charts that look like an accident at the fireworks factory, my hair catches fire. I believe that indicators have their place when they are on the chart for a very specific purpose (and the user knows what that purpose is).
Accordingly, this method has only two indicators:
ALF (Adaptive Laguerre Filter) was created by John Ehlers, a true visionary who adapts Digital Signal Processing techniques for use in futures trading. You may want to visit his website at www.mesasoftware.com. In the Technical Papers section of the site are many interesting and free examples of his work. ALF functions as a continuously self-adjusting overbought/oversold line. Buy when price goes above the line, sell when price goes below (similar to a Stochastic except that ALF is both the 20 and the 80).
TVI (Tick Volume Indicator) was introduced by William Blau in his book "Momentum, Direction and Divergence". The book contains many other excellent indicators and delves deeply into smoothing techniques that introduce only minimal lag. TVI measures the relationship between incoming ticks for a given volume. If upticks outnumber downticks the TVI rises, and vice-versa.
A screenshot and the necessary indicators (plus a template) are attached below.
If you have an hour or so with nothing more pressing to do, set this up on a M15, M30, or H1 EURUSD chart and take a look at the last few weeks of trading. It sounds presumptuous of me to say this, but I sincerely believe that this approach needs very little explanation. Entry and exit points and times when you should not be trading are quite clear.
Download the indicators and template at the bottom of this post. Copy all 4 indicators to the yourmt4/experts/indicators folder and the template to the yourmt4/templates folder - then close and restart MT4.
I'll drop back in tomorrow and, if there appears to be some interest in this method, I will deal with a few of the fine points (and the not-so-fine points).
Update 3/19/10 - A few words about the TVI indicators.
You may use any of the three TVI indicators (but make sure all are in your mt4/experts/indicators folder). Both TVI_2color and TVI_Histogram show the data using 2 colors as a visual aid - the actual data value shown is identical to that of TVI.mq4. Both will repaint the current bar as the data changes (which they should). TVI_2color will also repaint the preceding bar when the direction of the trend changes. This is deliberate and unavoidable - because of the way MT4 paints the chart this is necessary in order to keep the line unbroken. As you learn the method you will see that this is not a problem because TVI nearly always changes direction well before ALF creates a trade signal but if it bothers you, use TVI_Histogram or just TVI by itself.
Update 3/27/10 - A mathematically correct ALF
I mentioned at one point in the thread that I had been lazy when translating the ALF code from EasyLanguage to MQL4 and did not provide the correct calculation when the Median parameter is an even number. This update corrects that lapse.
Update 3/29/10 - and yet another mistake. ALF is now (I hope) mathematically sound.
Update 4/4/10 - After several weeks of live forward testing (the best kind) I have determined the following:
1. The slope of ALF is not as important as I originally thought - the relationship between ALF and PA is critical.
2. I have changed the settings for TVI for my own trading. Rather than the default (12, 12, 5) I now use 8, 8, 5. Check this out and see if it appears right for you.
__________________
Old Benjamin was right
Last edited by Lou G, Apr 4, 2010 10:01am
Reason: Settings update
Forgive me if I do not answer each post individually. I will try to answer every question.
TVI repaint? - No, only the current bar can change.
ALF horizontal? - This is a somewhat gray area and requires a little "feel" which you will acquire with enough screen time. If there is a clear open away from ALF and TVI is on a steep angle, go ahead and take the trade if you like. I try to wait for ALF to move a bit even if it's only a pip or two.
TVI zero line? - This has no trading significance - get rid of it if you wish. It's only there because it was there in Blau's book.
ALF/TVI on D1 chart? - If you can make this work, more power to you. I would not trade this method on anything longer than H1 (or H4 at a stretch). My objective is to get 1-3 trades per day with a high success rate and I am overjoyed to get 20-30 pips on a winning trade. Most of my trading is on M15.
Living as I do near Chicago, I trade the NY Open from 7am - 11am my time. I waited 3 hours today for a good signal and wound up with one trade, net +14 pips for the day. Better than a loss...
can use this methode at smaller TF, like TF1 or 5?...what is best setting ALF and TVi for those smaller TF?..thx
I wouldn't because that would be scalping and I hate scalping (though I envy those who can do it profitably).
I don't know what to do with the setting for shorter TF's - try it and let us all know if it works.
As far as settings go, the defaults are what the creators of these indicators recommend and I have not tinkered with them. It may be that there are slightly better settings for the recommended TF's. Feel free to try other settings and share them if you find something really good. The only caveat would be re: the Median parameter in ALF - be sure you use an odd number if you change it. I was lazy when I translated the TradeStation code to MQL4 and did not code the median calculation "by the book". An even number will not crash the code - it just won't calculate an arithmetically correct mean
Thanks to all who are posting. I hope the simplicity of this method works for all of you.
I'll add the currency symbol to the alert in TVI later today and post it in post #1. An oversight on my part - I have all I can do to watch one currency pair
For those who know how, feel free to add it yourself per the code generously provided by Walb99...
Interesting system and would appreciate some finer points explained - from a very brief observation TVI only repaints during current bar - not sure I understand the difference between ALF and MA -10 ema gives similar profile (less smooth). What is benefit of ALF - apart from smoothness
ALF provides more subtlety in the way in tracks price. Because of the adaptive nature of the algorithms, ALF changes very little when PA is static or ranging. Conversely, when PA pulls away ALF tracks it at a distance and allows for retracements without overreacting.
Check out Ehlers technical paper "Time Warp Without Space Travel" at www.mesasoftware.com - the benefits of Laguerre Filters are covered thoroughly there.
There is some problem with the TVI indiator you posted in first post and also Various versions in susequent posts.can u please update it when saved the indicator is saved as .php attachment and changing it to .mq4 also does not solve the problem.can u please change the indicator to original.mq4.Thanks.
Download by left-clicking the link. It should never save as .php - must be something you are doing but I don't know what it is.
EDIT - okay, I was just able to duplicate your error by right-clicking the link instead of left-clicking.
__________________
Old Benjamin was right
Last edited by Lou G, Mar 16, 2010 1:10pm
Reason: more info
There you are right that the TVI does not repaint but TVI_2color repaints (meaning when the candle is closed the line can change the color after candle close) that is for sure. I have no intres what so ever to say here thing that are not true. When I spot it again I will post the screenshot about it, till then be aware of it.
Friendly regards
Kristjan
Yes, as I look at the code I see that can sometimes happen - I did not intend to question your honesty.
However. due to the way MT4 paints charts, there is no other way to change color and keep the line smooth. The other alternative would be to use the single color TVI and open the Data Window to be sure direction has changed. If you prefer that approach, I'm sure the method will work just as well.
Attached is the TVI shown in histogram form - this should (hopefully) take us away from repainting discussions and back to trading (which is the topic of the thread).
Don't have time to say much but many thanks Lou for sharing this with us....it is already proving invaluable and I have a feeling I will come to lean on this template more and more.
Got more to say but have to run.....
You're very welcome.
Here's the same trade from my previous post on the H1 chart. Illustrates the value of looking at more than one timeframe.
Default settings? - are not cast in concrete. The defaults are the settings suggested by the creators of the indicators (neither of whom are Forex traders) so there may be better settings. I'm making steady pips so I haven't played with them, but I might...
Other currency pairs? - I really have not looked at any but can't think of a reason why this method would not work with them.
Tinkering? - feel free to add to the stock method if you can improve on it. Or even if you can't but just like the way your additions work
Thanks for the interest and thoughtful contibutions. My hope was that this simple approach would help new traders who were struggling - maybe it will if the thread stays alive. Looking good so far...
__________________
Old Benjamin was right
Last edited by Lou G, Mar 17, 2010 8:50pm
Reason: typos
If you have time to take a look at this, there still seems to be a small problem with the coloring of TVI. The histogram bars that I highlighted were increasing and should thus have changed color, but didn't.
Reloading the indicator (actually, reapplying the template) fixed this, as shown in the second attached chart.
This is the first and only time I've noticed this; other charts with the indicator on the same instance of MT4 behave just fine.
Not really a major issue, but if it is easy to fix it would be nice in order to avoid...
Hmmm - I have not seen this (and I keep MT4 running for hours each day). Thanks for the heads up - I'll go over the code and keep a close eye on my charts. In the meantime, you can always reference TVI,mq4 - I didn't write it but it appears pretty bulletproof.
I intended to post all my own trades in this thread but today I broke one of my own rules (traded against TVI) and lost. Still 4 for 5 this week, though.
May I recommend "Trading In The Zone" by Mark Douglas? Most have probably read it but if you have not, give it a try - great book, not selling anything (except the book itself) and the best trading advice I've ever seen.
__________________
Old Benjamin was right
Last edited by Lou G, Mar 18, 2010 11:08am
Reason: typo
It's a bug in Internet Explorer. Simply go to the office clip next to the page count in the top-right corner of the window to show all attachments and download from there. That takes care of the php issue.
Thanks, Jesper. I've been a Linux user for so long that I'd forgotten about IE and its problems.
On another note, I just recovered from my earlier loss (and then some) on the EU. Now 5 for 6 profitable trades this week,
__________________
Old Benjamin was right
Last edited by Lou G, Mar 18, 2010 11:52am
Reason: add chart
Hi Lou G, quick question, have you tried this system on renko? Is it better on usual chart? Thanks.
I've looked at it but have not traded it. Probably don't need the TVI if you use Renko - trend changes are already clear enough. Also, be sure to enable wicks...
Just closed the trade I posted earlier for net +38. PA is showing signs of slowing on the M15 and it's Friday, meaning that the position traders will soon be closing out for the week.
Note how ALF is homing in on PA on the H1 chart - a good sign that the trade is running out of gas.
Thanks for the explorer bug tip I forgot about that got it with firefox no problem. So here is a chart from last night just wanting to clarify. The red line shows a candle that from what I gather would have been an ideal entry according to this method. I would put the stop at the top of the candle. Now do you plan on trying to make this an EA?
Good entry, either during the bar you have marked or (if you are more cautious) on the subsequent bar.
No plans for an EA - this method requires a fair amount of human reasoning which can't be programmed.
Anyone who puts in a reasonable amount of screen time with this method will quickly get the feel of it.
why did you wait till the green down arrow before entry why not the red down arrow?
that would have given more pips, any reason?
kos
I was sleeping (literally). I trade from the beginning of the NY open until the end of the London session - then my day ends. I entered at 7am CST.
I should add that it's perfectly fine to ambush trades with this approach - I do it it frequently. Check the M15/H1 TFs - if the trade looks strong, jump in.
__________________
Old Benjamin was right
Last edited by Lou G, Mar 19, 2010 11:01am
Reason: more info
RE: my earlier trade today. As the coffee was brewing I booted up Linux and loaded the M15 chart. Saw the trade in progress but with a green bar on TVI. Changed to H1 and checked ALF - looked good, bending down nicely (not horizontal) and confirmed by TVI there. Hit ALT+s to run my sell script. Went out to do some errands. Came back at 9am and at about 9:30 decided to close out for a pretty effortless +38 pips.
Many thanks for having pushed that nice system, have a great WE.
You're welcome. Put in that screen time I mentioned, wait for clean, by-the-book setups (today's trade was a perfect example) and you will prosper. Probably...
I'm glad to see some experienced traders following this thread - my original idea was to present something very simple for the less experienced but still sophisticated enough for the rest of you (and me).
If this approach is useful to you, throw a vote - that way we will draw in more of the newer traders who are basically floundering...
Returning once again to the trade I posted earlier today - this is an example of using the interaction of ALF/PA to exit. Works best if the trade has given a good move (30+ pips or so). ALF catches up with and intersects PA.
For more ranging-type trades, TVI direction change may be a better exit.
You may note that I could have gotten another 10-20 pips out of this trade. I refuse to feel bad about it - Mark Douglas (in Trading In The Zone) has observed that the second biggest fear of traders (right behind an outright loss) is the fear of leaving pips on the table.
Anybody catch this this morning? I got a few pips on the Euro, didn't do quite as good as Lou.
I told myself to check for 30m, 4hr setups but when I saw the Euro setup this morning, I jumped in, not as quick as Lou, about twenty minutes later, and just watched it.
The cable 30m turned a couple hours after the open right into a nice looking 4hr setup, quick 100 pips if you moved on it.
Cheers+good weekend
Very nice. Good to see this approach working well on GU and H4 just as well as it does on what I trade. Keep it up...
am sorry ... but when i made back test for the TVI _histogram
it seems to me that the indicator repaints
so please any one can confirm that this indicator doesn't repant
Depends on what you mean by "repaints". If you mean that the current bar changes color, this is normal and is not repainting.
I suggest you re-read post #1 - I recently updated the indicators there and added some information about the TVI and the two TVI color indicators that should put your mind at ease.
I?ve tried to attach the TVI Histogram, but it?s only a blank window for me.
What?s is happening?
Thanks
Go back to post #1 - all three TVI indicators (TVI.mq4, TVI_2color.mq4, TVI_Histogram.mq4) need to be in your yourmt4/experts/indicators folder. Then close and restart MT4.
__________________
Old Benjamin was right
Last edited by Lou G, Mar 19, 2010 7:55pm
Reason: typo
The Forex market is basically divided into three sessions, the hours of which are as follows (all times are GMT):
Asian 00:00 - 08:00
London 08:00 - 16:00
New York 13:00 - 21:00
Note that there is a dead spot between 21:00 - 00:00 where (generally) little trading takes place. In addition, after the close in London, volume drops off dramatically leaving the period 16:00 - 00:00 with much less activity. Therefore, you need to pick a 3-4 hour slot between 00:00 and 16:00 for your trading window. The beginning of the London session is best, the New York (which overlaps the London) is second best and, if you have no other choice, the Asian is doable but less active (though there are some days with big moves).
I've posted a simple indicator called WorkTime.mq4 which will draw a green vertical line when your work time begins and a red one when it ends. I've found this helpful for visual backtesting purposes - it will help you to see what you can expect from ALF/TVI on a day-to-day basis.
MT4 does not make it easy for us to set this up. We have no control over the times shown at the bottom of the chart - these are established by your broker's server time and those servers may be anywhere in the world. The easy way to set up the start/end parameters in WorkTime.mq4 is as follows:
Be at your computer at the time you plan to begin trading
Pull up an H1 chart, mouse over to the current candle and note the hour from the bar at the bottom of the chart
Enter the hour as the StartTime parameter
Add 4 to StartTime and enter as EndTime (don't go over 23).
Hi Marine,
I've been looking at this too. After using the system for the entire week I have yet to see a past bar on the TVI set one color and then change color latter several bars after. Once that bar closes on any given Time Frame it has not changed.
IMHO this is not an issue to be concerned with using Lou's system.
Hope this helps you with your research.
Cliff
Another way to look at this (and a more practical one) is that one should be primarily concerned with the current bar since that's where we're trading. This is not to say that I think repainting would be okay
Cliff, thanks for posting - I wouldn't want anyone to get discouraged about the method as a whole over this repainting thing. Take a look at post #1 again if you would - I've added an explanation about TVI that I hope will mitigate the continuing distractions.
Yeah, Lou, mine has the glitch but it doesnt bother me.
If you mean the glitch in TVI_2color - yeah, you're absolutely right. It's basically meaningless as far as the trading value of the indicator.
Just for fun, overlay the TVI_Histogram and TVI_2color in the same window - you can see what the repainting of the line is actually doing. I'd rather that MT4 would allow me to draw a smooth line without tinkering but it won't. Maybe in MT5...
I want to thanks everyone with introducing their strategies and such. I am curious as to how you place your stops I know it depends on your account balance risk tolerant percentage account. You place stops right below/above blue ALF line as Lou stated and Lou or anyone do you place behind the last bar close below/above blue line thanks.
I would use mini lots of 2 and after 10 pips let the other pip run move my stops to break even. However, I am studying other strategies demo.
Actually, I have not been following my own advice - I've been using a flat 20 pip stop on my trades.
Just above/below the ALF is a good general rule but use common sense - if price is 50 pips away from ALF, you probably don't need that large a stop. Conversely, 10 pips is probably too little.
this is amazing, how this system is rated so quickly, it started on the 16th march and 4 days later it is a 5-star rating.
Does that attest to the effectiveness and simplicity of the system as day trading strategy?
kos
I don't know how the rating system works. I'd like to think that the method works for many as well as it does for me - I'm not that good as a trader and developed this to keep me from overtrading and only taking trades with a good chance of success.
The screen shot below was taken Sunday night (when I wouldn't be trading anyway) but it's a great example of what "Do Not Trade Now" looks like, no matter what time of day you see it. No correlation between M15/H1, two horizontal ALFs, etc.
Morning all,
Just thought I'd post a little 5 pip sclap to start the week off on the right foot.
[size=4]Although ALF is flat on both the 1h and 15m, this was taken as a scalp....
Nice play, Cliff.
As you can see, I did something very similar a bit later.
The astute will notice that I did not wait for my own exit rules to take effect. My reason? Mondays can sometimes be a bit jumpy with a lower daily range than other days of the week - just a "feel" thing, really.
Going back to an earlier post, this may prove to be a premature bailout but I steadfastly refuse to feel bad about pips left on the table if I have made a decent profit on the trade. This may not be the end - there could still be a retracement.
Took +15 pips net during the 09:15 candle (and after the news activity).
I'm not totally satisfied with the exit strategies for this method (as I've found that I generally don't wait for them) so I'll devote some time to improvement.
On the whole I'm very comfortable with trading this strategy. The results speak for themselves - 7 trading days, 8 wins, 1 loss.
well here is one I took not sure if I followed the rules per se. I use my own exit rules but the entry as far as I know was by the book. Almost 50 pips on the trade
Looks good to me - the rules (such as they are) aren't all that rigid.
Lou, Thanks for sharing your setup.
Can you go over your exact entry rules again? Sorry but I've read the whole thread and still not sure.
Also how do you put 2 indi's in 1 window.
oh?? Sorryyyy is posible that the indicator freedombar needs the indicator Heiken:Ashi_Overlay, I send you now with a picture- If you have a problem... tell me.
You must configure freedombar in timeframe 60. Blue means up trend, red means down trend in 1hr. If freedombar is blue you must take long trades and if freedombar us red.. short trades.
Nice and Simple Strategy Lou!
I'll devote some screen-time to it to get a feel for it. Just eye-balling reveals that best to wait for curve on ALF+ slope on TVI. Also, since you're only doing it on EU M15, just a thought you might consider opening up UC alongside as they are negetively co-related most of the time. Just to add up some pips.
Good trading to you!
Cheers
Actually, I switch between TFs frequently to get a sense of the trend (or lack thereof). UC, huh? I'll take a look.
I've been doing quite a bit of visual backtesting and am now not certain that the curve of ALF in the direction of PA should be an entry requirement.
I'm not ready to back off this completely, but I have said consistently that it is "best" if the curve is present rather than "must". Don't mean to waffle here, but this method is a work in progress...
Also experimenting with settings for TVI to improve its usefulness as an exit signal - 8,8,5 looks promising.
If you have interest in trading this method (and I do believe it has great potential - I have 10 wins, 2 losses in the past two weeks) do a little visual backtest of your own and post your opinions.
__________________
Old Benjamin was right
Last edited by Lou G, Mar 26, 2010 11:04am
Reason: more info
From what I have been watching on the charts over the past week, I think more important than slope of ALF is what TVI is doing on higher timeframes. I like the histogram and have it configured with different colors for positive and negative, increasing and decreasing values. A screenshot is attached for reference. In the chart, dark blue above 0.00 is a strong indication to trade long, dark red below 0.00 is a strong indication to trade short. Light blue and light red are weak indications.
I'm an MTF trader, so this leaves me a bit biased, but...
You trade very much the way I do. I agree completely about the slope of ALF - I've missed good entries by waiting too long. I haven't done much with M5 only because I feel it needs a little more close attention than I'm up to early in the morning
By the way, I really like your color mods to TVI_Histogram.
I have noticed the Levels being a factor also, I like to scalp so I have been watching the 5 with just the 15m as confirmation. But just using the TVI 2 color indy, I mark the levels -.15 and +.15. When the TVI passes between(short from above, long from below) with a 15m confirm, well, I'm not missing many of those. Just caught a sweet 15 pipper on the Cable. A RSI of 8 set at 55-45 seems to match this TVI move often.
Cheers
I'm glad to see that someone is able to scalp successfully with this - I found out the hard way that scalping is not the best way for me to trade but I always marvel at the skill of those who can do it well.
Interesting use of levels - I had not thought of using them.
can you please give some more information about the corrected calculation?
EasyLanguage, (the Tradestation equivalent of MQL4) offers a median function which is used in the original Ehlers code - MQL4 does not, meaning it has to be coded the old-fashioned way. When I originally translated the code I was lazy and did not provide for the Median parameter being an even number (in which case it's necessary to calculate the average of the middle two elements rather than simple selecting the middle one). This code corrects that - not a big deal either way but I do like to do stuff correctly.
EDIT:
Whoops, screwed it up again - corrected ALF uploaded to post #1
__________________
Old Benjamin was right
Last edited by Lou G, Mar 29, 2010 10:48am
Reason: mistake
Hope didnt risk too much on this trade as Lou says putting a stop loss above or below few pips the ALF is good.
That stop placement is a good general rule but needs to be adjusted in some cases - I touched on this in an earlier post.
Another good general rule is, "don't set a stop for more than you expect to make on the trade". I've been using a 20 pip stop for the trades I've posted here and, in practice, I usually don't let it go that far against me.
Temper all "rules" with good common sense - if totally mechanical systems really worked, spot Forex could not exist
If you have not read "Trading In The Zone", I highly recommend it. The author emphasizes the fact that, to trade successfully, it's necessary to have an "edge" that you trust. This is how casinos make money.
I use the ALF/TVI because I sincerely believe that it gives me the "edge" I need. I'm not a "natural" trader - in reality I'm risk-aversive and it has taken a lot of effort for me to get to the point where I can pull the trigger and place a trade. I'm sitting at 11 wins, 2 losses with this approach and my confidence in my "edge" is steadily growing.
I trade with real money, no demo-dreaming here, and my risk per trade is at a level which will be moderately painful if I lose (but not so painful that I will not be able to pay the mortgage). This approach works for me - may not work for all but I think it's grounded in reality.
The ALF uploaded to post #1 is now correct (really).
Let me emphasize that if you are using the default value of 5 for the Median parameter (which I do), none of this confusion will have any impact on you...
Only concern though is that ALF is horizontal....not much of activity so could range imho..that can kill my trade...so next time i will try when the ALF too either sloping up or down The trade is done on demo...
Personally, I don't like to trade after the London market closes (16:00 GMT) because of the falloff in activity unless a strong trend is in progress.
Congratulations on this clean and simple strategy. Will check and follow it and try to add some charts (trading only the early European hours) when I am sure enough to do so. Hope your thread will stay alive. Doubt it though, as there is not much to add. Very nice.
PBB
Thanks - it works for me and hopefully for many others.
I deeply envy those who can trade the Frankfurt open on into the London open - best place to gain some significant pips.
I trade from 7-12h Brussels (gmt+2), sometimes a little longer, but I always stop before the US figures start to come out. Those early European hours are great and from where I live I luckily still have a long day for doing things that really matter.
I wish to send you greetings for this so pure and so simple system. For last 3 years I checked so many, many systems based on almost everything. And my eyes are bored as hell with complicated, hard to pure analyse systems with 9-10 and more indicators...
Your English is fine, no problem.
Several people have mentioned the TVI/zero line - I've watched it and will continue to do so but I'm not ready to make it a rule yet. However, if it works for you, do it that way. There are very few firm rules in this approach and I think that's a good thing. Fewer rules and fewer indicators requires paying more attention to PA (which is the only indicator that really counts).
Jarek, Thanks for you kind comments. Also I hope Lou G does not mind us to talk about variations of his system. Telling the truth I had successful experience using 15m approach but also I had bad trades. I trade usually at the beginning of the European session and Price moves from up to down reverse. So I often enter position according to the rules (sometimes with confirmation on 1H) and often price go against me candle closed opposite direction and according to the rules i close my position. But system looks good. I think I just need more skills...
I trade from about 12:00 GMT until 16:00 GMT. This period is the last 4 hours of the London market and the first 4 hours of New York. There is almost always a tradable (and profitable) move each day during this time period. Generally speaking, the first half of any of the three markets is the time most likely to be successful.
Rules (such as they are) are very simple - trade a direction change in the TVI filtered by ALF. If TVI is moving down and PA goes below ALF, sell. Reverse for long trades. TVI nearly always changes direction before PA crosses ALF so that gives time to give PA a long look and decide if the market is actually moving or only ranging. I like to see a clear, definitive break through ALF, even if it means I get to the trade late.
If ALF is horizontal and PA is cycling around ALF, it's not a good time to trade - wait for a real move to start.
The cross of the zero line by TVI may or may not be important - several posters have mentioned this but I think the jury is still out
As with any method, you need to put in some screen time to get the "feel" of what a good trade looks like.
Timeframes are up to you but, as I said in post #1, this approach is set up for M15 to H1, maybe M5 at a stretch. I have seen no convincing evidence that it's good for scalping or interday trading.
Exits are possible when ALF and PA meet after a move, or when TVI changes direction.
The attached chart shows both a good trade and a viable exit. There is room for an aggressive entry or a conservative one - these are pretty obvious. Exits at either the intersection of ALF/PA or the TVI direction change would have been good choices.
As you can see, the "rules" are more like guidelines - this is as it should be. I hope this helps...
__________________
Old Benjamin was right
Last edited by Lou G, Apr 3, 2010 9:19am
Reason: better chart
Im still impressed as Laguere Filter works as support/resistant area for price action. It's very valuable.
Успіх в торгівлі
Jarek
I'm still astounded by it too - perhaps the most useful indicator I've seen.
Most of the indicators we use for Forex were developed for Equity trading and are not suitable for Forex without a great deal of tinkering - John Ehlers is primarily oriented toward Futures trading and his indicators work well without a lot of adjustment.
Actually, it's possible to trade based only on ALF. I came very close to starting this thread with only one indicator but decided to add TVI for a little extra clarification.
__________________
Old Benjamin was right
Last edited by Lou G, Apr 3, 2010 9:37am
Reason: more info
I deeply appreciate Soondoock's offer to create a PDF for the ALF/TVI trading rules. I feel that I have not been responsive enough to his request for rules and I've responded to many specific questions (RE: stoploss and other things) by talking about "feel" for the trade. Many less-experienced are probably saying "but what do I do if I have no feel..."?
The answer is, proceed carefully, don't overtrade, and the feel will come with time.
I seldom place more than one trade during my trading window and sometimes none at all. I use a fixed 20 pip stop. In the three weeks of this thread I've placed 14 trades with 12 wins and 2 losses. Only one of the losses went all the way to my stop - the other lost 14 pips. Average pips for the winning trades is probably around +15 to +20.
Some things about trading just can't be condensed down to fixed rules. I wish it was otherwise...
Thanks for clarification Lou G,
Please check my comments on you pic. It that correct? Attachment 451044
Exactly - don't trade when ALF is flat and bisecting PA. If you entered at the open of the bar following the NFP news release and exited at the intersection of ALF/PA (or at the TVI direction change) you would have profited by 20+ pips - who could ask for more?
Open A M15 bar chart and compress so that you can see several days.
Add ALF
Notice the places where PA appears to "peel away" from ALF and ALF begins to follow PA. These are the spots to look for.
This experiment is actually how I first got the idea for ALF/TVI. Obviously, each and every one of these "peel away" spots does not result in large profits but many do.
I've changed the recommendation for TVI settings from the default (12, 12, 5) to 8, 8, 5. Also added an update to post #1.
Slightly faster response with no bad side effects that I can see. Needless to say, if you are content with the default settings (or any other settings) continue to use what works for you.
SOONDOCK I see you took the trade when TLV Histogram BAR going up above the line . Do you consistently trade this way or regardless if the bar is green and below or above the line. I know LOU dont see it as important cause you can still BUY that way .
If you wait for TVI to cross the zero line you will be giving up many pips (on some trades). Do some visual backtesting and you will see this is true.
Lou G,
Can you please explain this statement?
Thanks
Several traders pointed out that the downward (or upward) slope of ALF is a bit too long to wait to enter - a definitive move through ALF by PA (see the trade for today) is more important. Therefore, I'm deprecating the slope of ALF as an entry requirement. We live and learn...
I posted on this subject a while back (for the less-experienced - others already know).
I trade 12:00-16:00 GMT because that's early morning for me (7am CST) and covers the overlap of London/NewYork). I would prefer to trade London alone but it does not fit with the rest of my life
I do look at the Asian open each day (6pm for me) and will trade then if there is activity.
I had a lot of losers with flat one. The only way for me then to look at M5 for earlier confirmation
When PA moves definitively through ALF the slope will not begin immediately - I jump into these and don't wait for slope. If the move is more gradual it's better to wait for slope change.
I hate to keep using the phrase "develop a feel" but if you put in the screen time (either live or careful visual backtest) you will get it. Basic pattern recognition is the key.
I've had 13 wins, 2 losses since the inception of this thread (all charts posted here) and others have also posted successful trades.
I don't expect to continue at an 87% hit rate forever (but it's been fun). Take the time to look at the posted charts and see what they have in common.
But I agree with Lou G, by the way I read the book by William Blau and about TVI. In his book he uses 32, 32, 5 settings and zero cross as a basic signal.
I think Mr. Blau is primarily an equities trader (or a position trader) but I like his indicators - they need to be fiddled with for use in shorter TFs.
Here is what I see. The TVI was red, so no buy.
Also I tried GU but it seems that this strategy works best with EU.
Lou G, sorry If I bothering in your thread. Attachment 452175
You're not bothering anyone. I believe there are some here who trade GU successfully so that's not the problem - I don't see a "definitive move" of PA through ALF in your chart so probably not a good time to trade in either direction...
i enter the one candle before that and TVI was showing green and hence i thought can be a good buy...
so all of you used it on EU only?
Look back about 20 bars - there was a "definitive move" down through ALF that looks like it was good for a decent profit. That's the pattern to look for.
I did some visual backtesting on GU and EY over last weekend - looks good on those as well. WAIT for a good signal...
Still could be a retracement on a longer TF but a flat ALF is bisecting PA so no trade.
Also, coming to London close soon - I personally won't trade after that unless a good trend is in progress. That is not the case at this time but I will watch for another hour (screen time!).
Some may fear entering after that "definitive move" - see the example below. This is not a trade I took but a good example. Had you sold at the point indicated, PA never went more than 10 pips against you and resulted in a very good profit.
__________________
Old Benjamin was right
Last edited by Lou G, Apr 6, 2010 11:01am
Reason: post chart
If it's any help, the subsequent bar (which would be an even better entry point) does show a 1 pip increase in ALF - may need to use Data Window to see it though. Or, the bar after that shows a clearly rising ALF and an entry there (at 1.5206) made a good trade.
I don't mean to waffle on the rules (or guidelines, if you will). I watched this thing like a hawk for many weeks during its development but evidently not enough to see every nuance. Bear with me - modifications to the original guidelines as outlined in post #1 have been very few and not drastic in nature...
I also tried to address this very early in the thread:
Hi Lou,Based on PA, i took short position for EU @ 1.3364 20:32GMT. Is it ok or did i do the mistake?Let me know.Regards,Anjani
I think your broker's server is not on GMT - it's 18:05 GMT now so the server is probably GMT+2.
That said, I would not trade between 16:00 and midnight GMT unless a very clear trend is in place (which it is not). I don't see a definitive move through ALF either so your trade may not do what you want.
The time you choose to trade is as important as any other factor. The first 4 hours of any of the three trading sessions is almost always the best time for that session.
Up to now I have not been posting my losing trades but here's one from this morning. Short EU at 1.3339 12:15 GMT. An unsuccessful attempt to ambush a downtrend... -12 pips.
Exited due to TVI reversal and upward break of ALF.
__________________
Old Benjamin was right
Last edited by Lou G, Apr 7, 2010 9:14am
Reason: more info
Hi Lou
Thanks for your valuable contribution, generousity, and help. I consider this system a great addition for newbies like me.. I hve just notied a perfect setup on AUD-USD on 15M. What do you think Lou.
Kind Regards ForexZak
You're welcome. I don't follow AU so I don't have a chart handy but good luck...
Post a chart so we can see your trade.
__________________
Old Benjamin was right
Last edited by Lou G, Apr 7, 2010 10:19am
Reason: more info
Hello Lou G,
I would like to find out is it possible to add signal (alert) to TVI to have alert on zero cross and to ALF for Price cross?
Best Regards
There is already an alert on TVI when color changes - I'm still not quite ready to give the zero cross the emphasis some feel it deserves, only because I have seen so many setups where that would have been a "way too late" place to trade.
Also not sure about an alert for ALF due to the potential for a signal almost every bar when PA is in a tight range.
I was asking because I am not a full time trader and work in office and have to do other stuff also. So this is just for the "pay attention" purposes.
Any way I hope you would not mind if I ask coders to do it ?
Hi Lou,
Thanks for sharing this simple system but great, Iam a new membre but i follow this system for a while. About TVI we have to wait for the changing in color for validation or also above/below 0 level ?
best regards
There seems to be some disagreement about that - I usually trade at color change if PA moves well through ALF. Others seem to want to wait for break of zero line.
The chart below shows why I am hesitant to base trades on the TVI zero line. Entry at the arrow was good for +20-25 pips before the zero line cross. This happens often.
I am with you Lou! I got my 20 on the EU, and 2 trades for 20 each on the GU. Very happy with 60 for the day!
Excellent - just goes to show that what I said in a post a while back is true. A lot of you people are much better traders than I. But, I'm getting there...
Those with successful trades - please take a minute to post your charts. I get the feeling that some of the less-experienced are thinking that this approach is too simple to work effectively - they need to be disabused of that notion...
Lou, been wanting to thank you again, since I'm getting more and more proficient with your method....
Not sure what you mean by an order book - TVI is simply a triple-smoothed ema (like TRIX) of the relationship between upticks/downticks over a period of time - can get you in fairly early in a trade. Can also whipsaw you very easily which is why there is ALF - to filter the TVI signals and (hopefully) tell when it's a good time to trade.
I like seeing all of you trying to find ways to improve on this - my feeling is, anything within reason if it helps you pull the trigger and does not over-complicate the simplicity of the basic approach.
A move through resistance (1.3515 or so) and upward moves by ALF/TVI needed before I would consider re-entry.
Soondoock is correct - it's not something that can be traded mechanically. I actually wonder if there is anything that can be.
RR is always on my mind - I use a 20 pip stop and am looking for +15 to 20 (or more) with a good win percentage. I was successful on 16 of last 20 trades, which is just fine...
__________________
Old Benjamin was right
Last edited by Lou G, Apr 12, 2010 10:37am
Reason: typo
A method with mechanical rules that can be traded profitably would be, in effect, an EA or trading robot.
I won't go so far as to say that this is not possible - only that I have not yet seen one. I've been here on FF for quite a while and seen EAs come and go without ever reaching long-term consistency. The computer between your ears is still the best one.
The blue line is the entry point of my last trade (posted earlier). Red line is the stop - let's see what happens to those who stayed in the trade rather than exit at +20...
__________________
Old Benjamin was right
Last edited by Lou G, Apr 12, 2010 11:01am
Reason: add chart
Do you use trailing stop loss? If yes can you point me to some script that does just trailing stop loss. When profit has jumped to 15pips then trailing to begin at 9 pips and every 5pip change upwards, the trailing stop change by 2 pips.
The intial SL = 20 pips.
Regards,
Anjani Singh
No, I don't - just keep a close eye on my trades. I've seen trailing stop EAs here on FF - look around a little bit, maybe in the Programming Discussion Forum?
Here's my previous trade with some imaginary trend lines. Note the higher lows (green TL) preceding upward break through ALF supporting entry at the up arrow. Worst case should be close the trade at the X (+10 pips) after seeing the lower high (red TL).
Good eye Goldsufer...
What I'm looking at is the relation of widening gap in TVI lines, their relation to zero line and the PA setup with ALF entry rules...
Also, added TVI 3,3,5 to the mix...
So far looks very good...
Cliff
That's really interesting, Cliff - keep us posted.
A few posts ago I mentioned my results from the first 20 trades placed using this method. Why 20 trades?
I'm using a technique suggested by Michael Douglas - keeping track of my results by trading in 20 trade sample cycles. Mr. Douglas explains in detail why this an important thing to practice. I won't bore everyone by repeating it all here - suffice it to say that I think it helps a great deal.
1st cycle - 16 wins, 4 losses.
2nd cycle - 2 wins, 0 losses (so far).
Not boasting, trying to be encouraging. If an admitted poor trader (as I've confessed to repeatedly) can do this, anyone can
__________________
Old Benjamin was right
Last edited by Lou G, Apr 13, 2010 10:33am
Reason: more info
I'm not satisfied with my trading today - the chart below shows what was possible. I talked myself out of the first long (+20) and bailed out on the second (+20) when I could have gained twice that by simple following my own guidelines.
LouG thanks for the system and all your trade examples thus far, hope you keep the good work up on this thread.. As for this trade, It has been said on this forum many time b4, better to be out of a trade wishing you were in, than been in a trade and wishing you were out...
Rebel
Thanks for the encouragement - I will persevere and, hopefully, encourage others. I feel strongly that ALF/TVI (the method) is much better than my ability to trade it - and that's a good thing
Hi, please see attached... i draw a white line.. this is where i enter trade..
Sorry I did not reply sooner - busy morning. Looks like you entered a bit late - watch for TVI to change color and then as soon as PA crosses ALF, that's when you should look to enter.
No need to hang on until your stop is hit - as soon as trade turns against you (often TVI changes) bail out and live to fight another day.
I guess I was a bit premature in my entry. Saw it poking below the ALF on the 15min and the 1hr TVI was switching back and forth so I jumped in. I set a 20 tp so I ended up capturing almost the entire initial move.
This is my first session trading this system. Not sure if having 5min chart open is more of a distraction than a help right now.
The best setups I like is when ALF is flat and TVI gives great slope..there was no doubt in my mind about this one. As usual entry at pullback to 6 EMA and exit at 20 pips.
Also I think TP@2*ATR(20) is a good one to take since ALF also uses 20 periods in its calculation. Again each one at its own discretion.
Lets c what US session has on offer.
Cheers
Punter
hi,
i clicked on the template link on post 1, i save it in the template folder, however when i restart metatrader the template is not in the list. can anyone help.
Did you also download all indicators? If you're using IE, try downloading from the paperclip icon in the upper right corner of each page...
On Sunday evening I usually look ahead on FF to see the news for the coming week and make some notes on the calendar - I had today marked as a questionable day for trading (at least for what I do).
I'm hanging it up for the day - a small loss earlier and so it goes...
No worries, Mate...just part of the learning process, eh?
This really is quite a good system. I look at the ALF like a line drawn in the sand at the beach...you know it is not permanent, that it will disappear at some point...that change is the PA.
The TVI just gives one a bias as to market direction and can also be helpful in defining divergence.
See ya in the trenches.
Cliff
Thanks for defusing the repainting issue in my absence - hopefully everyone who is new here will read the posts on the first page of the thread. I've tried to keep post #1 updated with current indicators and guidelines (including a few words on the repainting question).
__________________
Old Benjamin was right
Last edited by Lou G, Apr 18, 2010 8:16pm
Reason: typo
I took my first live trade using Lou's system and took 15 pips (I won't bother posting a chart as it matched the same entry Lou made on his trade). I had been sim-trading this method for a few weeks now and finally decided to go live. Just wanted to thank Lou (and all the others who've contributed) for presenting their methodology in such an easy to use format.
Over the next few weeks, I'll try posting results on markets other than EURUSD as it seems to have general applicability to many markets.
Thanks and Good luck trading All!
That was a nice little move, wasn't it?
Several members are trading Cable with success and I seem to remember someone posting a chart on AU - I can't see why this approach should not work for any pair.
i found out that it can only be used during US Session as what Lou G suggested... cos i hit my stop loss during e asian session.. is that true?
Nevertheless, i uses 15 Mins as my main and 30 Mins as confirmation..
The first half of any of the three major sessions (Asia, London, New York) is generally the best time to trade with London being best followed by NY and Asia. Depends on when you are able to trade based on where you live and on your schedule. I like the overlap of London/NY - there is almost always a profitable trade between 12:00 - 16:00 GMT.
I seldom let a trade go against me all the way to a 20 pip stop, especially if TVI turns the wrong way.
__________________
Old Benjamin was right
Last edited by Lou G, Apr 19, 2010 11:48am
Reason: typos
If you have no other viable trading time available, the Asian open is still a possibility - revise your expectations downward a bit and you can still make some pips. See the chart for last evening's opportunity. This does not happen every day but it does happen...
__________________
Old Benjamin was right
Last edited by Lou G, Apr 19, 2010 12:08pm
Reason: typo
I'm planning a research project to answer the question "should only short trades be taken when TVI is below the zero line - and vice versa".
It will take me a while to get this done - I plan on dumping the necessary data to a csv file and writing a quick and dirty Python program to do the analysis but it may be worth the effort.
Several members have raised this question and I hate not knowing the answer....
went short just now and hit my SL.. any body know hw to prevent?..
There is no way to prevent trades from turning against you, but...
IMO, stops are not made to be hit - they are there to protect against disaster (your DSL goes down, computer crashes, etc.). If trade turns against you, get out - there will be another signal coming up.
Study charts of successful trades - they seldom reverse by much.
__________________
Old Benjamin was right
Last edited by Lou G, Apr 21, 2010 9:25am
Reason: typo
me too I got out around 1.3405 around support on 15minute chart. I left one pip to play looking at 30 minute TVI turn green and price action moving steadily up but TVI and price below ALF down on the 1hr. I have to see if I should be patient with the 1hr for "better" confirmation....
You're welcome (and EllisEdi is too)
Good analysis and I'm glad you guys made a few pips - I'm feeling cautious today...
I wanted to take a bit of time to thank Lou for sharing this method with us. It is a clean and simple method with room for personal analysis to help filter trades. Thank you Lou for sharing this method and continuing to post your trades and thoughts.
Mark
You're welcome, Mark - haven't seen you since the Renko days, glad you're here.
Just tried a short - EU at 1.3375 - but no selling enthusiasm. Lost 5 pips.
Guess I'll hang it up for today - what a blah market...
__________________
Old Benjamin was right
Last edited by Lou G, Apr 21, 2010 11:48am
Reason: typo
Hi Lou G
I have some difficuities about retracement in this Strategy (ALT/TVI in 15M)
My question is, how do you treat the retracement please.
Kind regards
gopsat.
When PA passes the point at which the reversal occurred, enter in the direction of the original trend (if ALF/TVI are in agreement). If that point is not reached it isn't a retracement, it's a reversal.
Hi Lou G
Now, no problem with retracement, it's ok, I want to know what is your percentage of winning with this strategy, because I want to compare if I am right or not.
Thanks in advance.
Best regards
gopsat
First 20 trade cycle - 16 wins, 4 losses = 80%
Second cycle (in progress) - 5 wins, 3 losses = 63%
also does not the orginal strategy work i mean everyone is trying to change it with different things
Yes, the original strategy does work. However, it is the nature of some to add their own favorite indicators. I don't mind this as long as the basic method is not violated. IMHO, more is not necessarily better.
I tried to add a few different TVI Indicators to various charts and nothing draws. I tried the templates - same problem. I love tje ALF indicator but can't get the TVI to show.
Any suggestions???
You need to download TVI.mq4 as well - the other two use that as the source of their data.
Hi Lou G
This weekend I was thinking something not foolish, if you or somebody else could have an indicator that make an alert (message and sound) when PA touch ALF in both direction.(buy or sell) It will be very nice for stop or re-entry. What do you think of it ?
I think there would be too many alerts during ranging markets. I gave this a lot of thought before deciding that the TVI was a better place for alerts.
In the,"Month of trades," example above two trades were taken without TVI 12 12 5 confirmation,the Buy at 125.01, and the sell at 124.56 for losses of 95 pips, and 35 pips respectively. I will be keeping TVI on my charts!
What would keep you out of taking a long at the red line. TVI has turned green. The previous bar closed above ALF. Only thing I can think of is that the PA was not moving 'away' from ALF.
Input appreciated.
Today I took two trades on EURUSD. The first trade was long and BE, could have been 20 pips if I had placed a limit. The second trade a short for a quick 20 pips.
Eddie
Overall market trend would lead me to suspect the possibility of a retracement - time to wait and see. This is the part of all methods that cannot be accounted for with indicators and is the most challenging part to learn - what I have referred to several times in this thread as "feel" which can only be learned by putting in lots of screen time.
Sounds like your trading is going okay - today was a difficult one.
In trading we are confronted with three questions:
Direction - Which way will PA go?
Distance - How far?
Momentum - How long will it take to get there?
TVI provides direction. It's not always right but it's right a lot. ALF acts as a continuously variable RSI - above ALF is long, below is short, providing entry points.
The time of day you choose to trade provides momentum. This is not guaranteed either but, if you trade during the first 4 hours of one of the three major trading sessions, momentum will usually be there.
Distance is the mystery and cannot be predicted. Trade management is the only way I know to cope with this. Watch open trades like a hawk and, if you are in profit, get out at a sign of weakness - you can always re-enter later.
Here is an example. If the current candle closes above ALF, will it then be a valif long as TVI turned upwards already? Should we be weary of that red trandline?
Eddie
Trading countertrend is always risky.
You can either skip the trade or revise your profit expectations downward and take the chance anyway. Your choice...
hey LOU during the summer eur/usd gets cool down a bit do you still trade eur/usd and look for opportunities or look for other pairs or simply take a break>?
I've honestly never noticed such a predictable slowdown but perhaps I have not been paying attention.
I entered short right into a support area of 1.3305. It was also a major round number area of 1.3300. Before the trade I reasoned that price usually likes to break through major round number areas by a bit before retracing to previous levels or retesting the major round number area and continuing in the direction of the break.
This is where my screen time with this pair has paid off.
Mark
Ditto to your last few posts (especially your reply to gopsat77). I was about to post similar suggestions but you beat me to it...
I took the trade as indicated for a really fast +20 pips.
I've been using a new version of TVI for the last couple of days and find it helps me stay more focused on PA. It very definitely does not repaint (it waits for the previous bar to close before the signal line appears). Use it if you like it
nope their are the same look at screen
i did 4printscreens and copied it to one because mt canot open propertis for more than 1 indi at the same time...
check it if u can or mayby atach one more time versions of txi that you actuali use - mayby i downloaded some strange old version?
btw thanx for your system i didnt belive in it till today - i drope off idea to connect it to tebs 5/12 emas...
Nope, I posted the version I use - don't what the problem can be. Compare to the histogram version below - all is ok. Use something else if it doesn't work for you...
I'm amazed that this thread has more than 600 posts. I do read them all but only have time to respond to selected ones - I answer all with problems and some from members who really "get it" in order to call attention to their experiences as inspiration for those who are struggling.
Most who fall into the "struggling" category simply lack trading experience and, as we all know, the only way to get that experience is by trading and learning from mistakes (and from successes).
Question for you or anyone else that could imput, What if the TVI does not turn down (red) or up before the PA moves below/above the ALF, would you enter when the TVI changed or only take trades when the TVI turns before or at same time PA moves past ALF? I notice most of your pic post of trades you took seems they they happen about same time.
Also could you direct me to the post where you explain your target/risk setup?
and do you trade this on more pairs than the EU and on different TF than 15?
Thanks so much
Usually, TVI changes slightly before PA passes through ALF. That's the time to trade.
I use 20 pip stop so I try to get at least that much in profit but it's important to be flexible - if PA moves reverses to ALF or TVI changes directions it's time to exit.
There are lots of examples of good trades from myself and others - check them out.
Hi Lou G
Excuse me for this question, What is the exact condition to take a trade with TVI signal, ALF and TVI Histogram.
Thanks in advance
Kind regards
Gopsat
TVI_Signal and Histogram tell the exact same story - just a simpler way to clean up the chart.
PA below ALF plus red vertical line equals short and vice-versa BUT...use common sense and wait for a definitive move. What is "definitive"? Study charts of successful trades posted here until pattern recognition sinks into your brain.
I totally missed this trade (shame on me) but it's an excellent example. Anywhere below support (red horizontal line) would be considered a "definitive" move.
Does anyone have any doubt about trend direction when looking at this chart? Not a good idea to trade against this...
A very successful trader (Jacko) who has a long-running trade journal here on FF said: "show this chart to a six-year-old and ask which way it's going".
My point in this post was to explain why the up signal (second green line back) should not have been taken - sorry, forgot to put the up arrow on the chart.
Hi pipzap I have not been able to get the template or the two gif indicators from post #1 onto my MetaTrader 4 spent hours on it but no success with the bugger. so just wondering if you could post a link to your template ,
not being lazy but working with old eyes
I have the TVI indicator
thank you and all who have posted
JayalFX
Not sure what you mean by gif indicators - can you explain?
Lou great system easy to use for most part. Rules are fairly simple. What I struggle with is when not to use it. I understand not to go against the trend ect, even not to take it if there was already a huge move awayfrom AFL. What about the other short signals before the one you pulled the trigger on, like the red line right before the one you shorted, and there was one before that, why not those?
I was sleeping then (literally). I trade from 12:00GMT (or so) until London close. Those would have been good entry points as well.
Hi I would like to try your system. I use firefox to download but TVI candles won't show on charts. only get black and white. Please let me know how to fix.
Regards
Be sure you have followed the instructions in post #701 - check that indicators and template are where they should be:
Look in Navigator and verify that AdaptiveLaguerreFilter, TVI, and TVI_Candles are shown there.
Click the Templates icon (far right on toolbar) - is ALF there?
if no joy, post a chart so we can see what you are seeing...
mayby becaise i dont upload it as Attached but to imageshack.us and then paste link using
Code:
[ IMG]http://....[ /IMG]
without space
ps Lou do you play now only eur/usd ? why?
Please do it as I suggested - easier for you and for me and for FF.
EU has lower spread - not a great reason but it's how I think. That's not necessarily a good reason for others. Many trade GU, EY, etc. with no problem.
"By the book" exit of previous trade. Some will say, "but you left pips on the table". This is true but I'm trying to show that you can trade this method with fairly rigid adherence to rules and still make a pip or two.
Rule says "exit at change of TVI direction or cross of ALF".
Entered Long on the close of the candle(that closed up) immediately after the candle that crossed the ALF signifcantly. This means there was some momentum. TVI was moving upwards (green) but under zero line. My exit plan was +20 pips which coinsides with previous support. So I was watching very carefully on a lower time frame (1 min) for price movement exhaustion. I almost exited at +15 pips, but decided to move stop to break even and wait for one more wave (on 1 minute).
... based on Williams Fractals. I'll post this indicator below for the benefit of the less-experienced but I'm not making it a permanent part of ALF/TVI.
After using this for a while, you can see the SR levels in your mind's eye and do it without the indicator...
Whoops, forgot to post the chart:
__________________
Old Benjamin was right
Last edited by Lou G, May 6, 2010 11:14am
Reason: add chart
I hate to make this the first post here Lou as your method seems very interesting. New (and old) traders are quite likely to learn even more from posting (some at least) losing trades.
Anyway I trade lower highs and higher lows with what I see as the right candles. I use an 8 lwma but the adaptive laguerre seems very interesting.
Once again pls do not take offence there's none intended.
None taken - I think I have posted one or two losers but generally believe that those who are struggling need to see "do this" rather than "don't do this".
I like it. Please excuse me. I'm off to buy an ALF T-shirt...EDIT: If I may, IMHO, if I interpret the chart correctly, this bodes well for the contuing success of ALF/TVI trading. Please correct me if I am wrong.
Now, as to the indicator. The TVI is an average of trading volume (ticks). Because the total of ticks is not permanent until the close of the bar, this TVI is calaculated at every tick during that bar and can and will change during the life of that bar. The TVI2 indicator actually calls the TVI indicator to get the value and then maps either a red color or a green color in the proper point. Now based on the way MT4 refreshes automatically, most code does not force a screen update when a new value is produced, therefore the value will get updated...
I wonder, could the refresh problem have something to do with what release of MT4 is being used (and who it was downloaded from)?
I spent many days with the indys running on demo for hours at a time during the development phase and never saw problems like this, in fact I just put TVI_2color back on my chart after reading your post and watched it go through a direction change just fine.
I'm trying to encourage members to move to the new candle-oriented version - haven't seen any refresh problems it that so far either.
I know you to be a more accomplished C coder than I, so any suggestions you may have are appreciated.
Sorry, my response to your post was non-responsive - I just woke up, booted my machine and was not quite awake yet.
As I said in my reply to EllisEdi, I have not seen refresh problems such as you described. Try reloading the indicators in question from post #773 and let me know if your problem gets solved...
Better yet, here are the actual executables - download and copy to yourmt4/experts/indicators along with the source code from post #773.
Lou,
Your MT4 code is clean and well written and is written as it should be. The bug I think is in MT4. BTW, On my platform the bug does fix itself after a bit.
I am using version 4 build 255 from FXDD. Only rarely have I seen any hickups in displaying the color. (Attached is an example of a drawing issue for the histogram indicator.) By adding a WindowRedraw(); command it forces MT4 to redraw the objects. I have not tried this for long (just put in the line this morning) so i am not sure if this will fix it.
i.e.
WindowRedraw();
DoAlerts(i);...
Aha, I've seen that before! The drawing error you show is caused by the way MT4 calculates the max/min of the indicator window - if you check the actual values of the histo and the 2color in data window, you will see they are both the same. If you change the TF of the chart it will correct itself. WindowRedraw may not remedy this.
You are correct - it is an MT4 oddity (hate to say error - Slawa gets testy)
let me show you the picture in question. i am attaching it right now. hope it works.
as you can see between the 2 red lines. tvi_2 produces a green line. however in this case the buy would have been a lost.
again just curious why it happen. because the indicator is pretty good overall in the M15 timeframe.
also a small idea of mine would be, if there is a timeframe say between 2 or 4 hours where the currency value aint changing much. would it not be a a good idea to give an orange line? to show your entering a dangerzone?...
There is no signal to buy in the area you indicate - a buy signal would only exist if PA rose clearly above ALF.
Also, in an overall downtrend such as the one shown, it would be VERY risky to trade counter-trend.
See post #564 for an explanation of ALF, TVI and PA.
ps im still looking for some filter
i checkd f/e moving avagree in color best for me was 6-8 period at h1 and take shots on 15min only in direction/color of that ma in colour..
but now i see that this sma on 1h give me same results as the ema 66 on 15min ;p
did somebody found something interesting about filter?
regards and have nice weekend!
IMHO there is no better filter than ALF - there are a few that are almost as good but you're certainly welcome to keep searching...
+30 and +50 on two different trades
I could post my charts, but there is nothing much to see....price goes through ALF with some conviction......TVI is in agreement.....simple ....simple.
I am done for the day.....I figure 80 pips is a pretty good day, and although I am sure there will be lots of other opportunites today.....there will also be lots tomorrow....and the next day.
Lou....thanks!! Although this is not the only system I use.....I sure like this one.
PGPB
That's the spirit - take what the market gives you, don't be greedy
Lou, tanks for sharing your sistem, it looks to be very simple. I?m tradin oil with your tools.
I notice that your sistem can be refine with momo scalpin (15m, H1), (Boris schlossberg book, google it...) TVI cross can be confirmed with Macd cross after retraces. it looks to be promissing... lets see. what pairs you trade?
tanks again
bruunoalves
Not surprising that ALF works well with oil - John Ehlers, the developer of ALF, is primarily a futures trader.
If I had stayed with the basic rules (10 pip stop, 20 pip tp), my trade would have been back in profit now. And would have closed when price hit my target of 1.2741.
LESSON : Stick to the rules ...
Mark
Well done - you picked the right place to enter. I'm not going to trade today - didn't sleep well and just not sharp enough for all this volatility.
What are your thoughts on the various time frames?
I will often use moving average or two to help me decide which way the market is moving.......I look as high as the 4 hour and I decide on which way the market is moving and then only take trades in that direction
Then I switch to the ALF/TVI method on the one hour and then down to the 15 minute chart to take trades.
Today I moved down to the 5 minute today.....but I am starting to think the 5 minute candles might be a bit too jumpy for my liking
How low do you go for entries?
PGPB...
I started out on M15 confirmed by H1 but, as I gained experience trading the method live (since the inception of this thread), I've moved to using only the M15. I find the M5 jumpy as well but I am not a scalper - perhaps someone else could make the M5 work just fine.
What's causing this sudden posting of indicators that have nothing to do with the simple method I created? Anyone who thinks that adding more indicators will make their losing trades disappear is on the wrong thread...
When you see a large candle like this forming, trade as soon as it goes red - can't wait when market is this active. You can make your entire daily profit in one fast trade.
To take this to the extreme, say you went long at each of the red arrows - the first two went south and caused a loss of 12-15 pips as PA returned to ALF so you are -30 or so. The third trade returns +50, leaving you at +20.
ALF, TVI candles and the all-important PA. I'd like to see more traders using the TVI candles, not to gratify my ego but to help everyone stay more focused on PA.
You may use whatever version of TVI you wish, of course, but I find the TVI candles a big help.
but why I like to keep Price Channel on my chart(as an indicator of PA), even though one can trade quite successfully without it. At times the entries can come a bit late. Only two trades during same time interval, both winners.
I am not trading this system and not intending to trade it. Just stopped by to say that TVI Histogram is one of the best indicators that I have lately found in FF where I am permanently looking for new ideas.
I use the indicator instead of MACD. My settings for current timeframe are 8, 8, 5 and I always have a higher timeframe version on my charts with settings 64, 64, 40.
Wish you all the best!
I'm glad you're finding it useful. Check out ALF while you're at it; like you, I'm always open to new ideas and it's the best thing I've found in a long time.
The reason the cross changes when scrolling is due to Different max and min settings of the two indicators.
If you select a zero level for each of the indicators you will see that there are two zero levels on your sub chart.
Pat
Thanks Pat - one can only depend on the crossing of two or more lines in the indicator window under certain circumstances and this ain't them. It's a minor bug in MT4...
Lou or anybody else
can you check the tvi candles for diffrent settings?
for me they are always showing 8 8 5 settings
try to change it to anythung lets say 24 24 5
and on my chart there is no change? still showing 8 8 5 ?
can somebody check?
regards
edit
yes there was a litle bug it was set up HARD to 8 8 5 and dont use "r s u" value drawing candles
Lou i hope you don't mind nothing against - here its a last (with emails) fixed version for any settings
I don't get it - the indicator you posted is exactly the same as the one I originally posted. Parameters for call to TVI are NOT hard coded - they may be changed by the user.
I sense a certain reluctance among members new to this thread to go back to old posts (much less the beginning of the thread). Can't say I blame them - therefore, I have posted the indicators and template in their current state in post #905.
Copy the three indicators to yourmt4/experts/indicators.
Copy the template to yourmt4/templates.
Go back a few pages and review posted trades - method is fairly self-explanatory after you put in some screen time.
Go long when candle is green and above ALF, short when red and below ALF, be very careful if you choose to trade counter-trend.
If you are unsure of the trend, compare the position of ALF at the left edge of your chart to the current position - that's the trend. It can be higher, lower or about the same. If about the same and PA is cycling back and forth through ALF, the market is ranging (rather than trending) and will require caution.
Exit trades when candles change color, or when current candle recrosses ALF.
I use 20 pip stop on M15 - longer TF requires larger stop - use good judgement.
New on this forum, very first post,
I want to use it to thank Lou for this brilliant system.
It's simple and effective, I tested it demo this morning on the 5M and then I have done a real trade on the EU +9 pip in about 2 minutes. Could have done more than 30 pips easily, just pointing to the 38% fib.
I'll post the chart asap.
Have a good day
Lorenzo
Start slow, be content with small profits (and small losses) at first until you acquire the "feel" of the method.
ALF/TVI is NOT 100% mechanical - requires some trading smarts that can only be gained with time and experience.
yes Lou we known this is great;]
i ask myself why other pepoul including me adding more indi etc
it is just very hard to belive for new treaders like me that it can be that easy! and they dont like hold trades this long (on 15min tf it is almoust always >1.5 / 2h)
they wanna find a way to make some money in just couple of min..
i need to be more patient ! mayby i should start some yoga or something;]
New traders (and not-so-new traders) are often insecure and experience anxiety and fear when opening a trade - this is normal (see Trading In The Zone by Mark Douglas, often recommended here).
Many attempt to dispel this natural anxiety by adding more indicators in the belief that, if enough indicators point up or down, their trade will be more certain of success. IMHO, this isn't true.
Here's a good setup. Trend is up (current ALF higher than at left side of chart) - go long at the arrow, already good for 20-25 pips (more if you were paying attention).
I took this first trade on EURUSD. I lost it. I entred on TVI candle red closing below ALF. When I entred TVI candle and TVI histogram were red. Now u can notice that TVI histogram was green when I entred short.
Is TVI histgram re-painting. Settings on both are 8,8,5
Thanks
No, there is no repainting. The current bar can change color as PA moves - this is normal and not "repainting".
You chose to enter counter-trend (current trend is up - notice the profusion of green candles and ALF position) and took a loss. Always best to trade WITH the trend.
There is no need for multiple TVI's - the setup in post #905 is all that's necessary.
Something is wrong with your TVI settings - see the attached chart
If you have a profit, consider closing half your trade (yes, mt4 will allow you to do this) and letting the other half continue.
Just don't let the live half eat your profit if PA continues moving against you...
Here's an example - short at the arrow, PA begins to move up at the check sign, close half the trade for some positive pips, let the other half go, voila - it works...
Do you wait for a full candle to both open and close the opposite side of the ALF, or do you just want a candle of the right (TVI) color to close on the other side of the ALF?
Invisible
Either way can be right - the correct color candle needs to close above or below ALF.
have marked 2 trades with arrows would this trade be entered acording to the system they look like loosers just trying to see if i get it.
best regards
Well, you have marked two losers on the chart but you have not marked the winners, of which there are at least two and probably more. In addition, the wins appear to have gained quite a few pips which would more than offset the losses (which is how trading works).
Try marking all possible trades, wins and losses, the add up the pips.
i have marked the pic with thumbs up or down acording to if it?s long or short what i thougt would be winners ?? and one cross that is still in trade i dont know how this turns out please correct me if im whrong.
best regards
I don't think you're messing with me - I'm trying to help you.
First question for you to answer (for yourself) - what is the trend?
Up, I think. Note that ALF is higher now than at the left edge of the chart so eliminate all short trades.
That leaves 2 wins with good profits, 1 loss and one trade still unclear.
Recall that I have suggested trading only when London session is in progress (if possible where you live). That will weed out another loss and leave you with a profitable scenario.
thanks lou im sorry but can u point out the london trades again london si from ?? im from europe so london and usa session are best london starts at 8 gmt i think that is 09 for me but i cant find so many winners in this persiod that are london one is to late 19.00 and the other is before london open if u mean the green trend trades do u understand wich i mean ??
best regards
London market opens at 08:00 GMT, closes at 16:00 GMT.
12:00 - 16:00 GMT - NY is open, overlapping the afternoon of the London session. This is when I trade.
There was a nice up move during London today (but before I was awake). I'm sure you can spot it on the chart.
Euro appears to be stalled right now, crossing back and forth through ALF with resistance a little above 1.2400. Although the overall trend seems to be up (after a trip down to a 4-year low) I am reluctant to trade unless I see a strong push above resistance or a convincing counter-trend move.
i missunderstand me and my intensions it seems i just try to learn and therefore i wanna know kow many trades and if i am right in what i thought are trades and are winners and loosers.
your stop is 20 pips and your target is when price touth the line ?
you dont have other targets and u dont move it to break even after some pips ?
best regards
There are no targets - I watch the trade and, if in profit, I exit when and if PA turns against me - don't know any other way to explain it.
I sense you are looking for 100% mechanical method that will ensure profits - this ain't it. If you find such a method, let me know...
@Lou
hmm can you tell me if i wanna play exacly like you but wathing 5m charts but using m15 mtf alf on 5min chart
how to make that tvi candles show colours like on m15? is it enought to set to 24 24 15?
thanx
I know nothing about mtf alf - not part of the method so you're on your own -
This is my chart on EURUSD 5M, are these things happening to me only ?
It's sort of a repaint-error .... anyone noticing it too ? Any fix ?
Anyway, many thanks again for sharing your system Lou, great job!
If I see the word "repaint" again I'm gonna break something
Please post your charts in the standard way (file/save as picture/active chart "as is"/OK) so we can see them better.
As far as I know, any so-called repainting is caused by non-matching settings between indicators. A couple of very good MQL coders (other than myself) have looked at the code and pronounced it accurate.
Sorry you are having issues but I see no error in the coding - check your settings.
By the way, TVI_Histogram is redundant if you use TVI_Candles...
My TVI line gets broken up and/or has color that doesn't match slope at certain volatile areas. Switching to another time frame and then back to the one that was garbled has been setting things straight. A lot of indicators of this nature do that for me. Not sure if that is what was happening on the histogram.
EllisEdi has suggested that this may be a MT4 problem - I would not be surprised if it is. He is an accomplished MQL coder (much better than I) and has reviewed the code and found no problems.
I've had my chart running for almost 3 hours and have not seen any problem.
Is there some reason for the reluctance to use TVI_Candles? I've not received any complaints about that (yet)...
Well, I posted it as a screenshot, what does it matter ?
Post as you like then, but the standard method allows us to enlarge the .gif for a closer look and also shows the currency symbol and TF.
I notice that you have both TVI_2color and TVI_Histo in one window - this has been proven to cause problems (posted by member Pat a few pages ago) - MT4 may not display properly when multiple indicators are superimposed...
I knew I should have simply used the standard, unadorned TVI from the very beginning - there must be 20 or more posts about "repainting" which only results in taking the thread away from actual trading - my mistake.
__________________
Old Benjamin was right
Last edited by Lou G, May 19, 2010 10:39am
Reason: more data
Thanks for your reply. I am not making Lou responsible for that. I am sure Lou understands what I want to say. So pls.......
EU is very jumpy today - I've been stopped out once already. 20 pips is the most I am comfortable with risking per trade based on a small percentage of my account balance.
Not wanting to fight. This trade was right around the even number in an overall downtrend. So volatility was always going to be an issue. If you gave your exact entry price it might help.
If you're going to trade around an even number especially against the overall trend expect more volatility and increase your stop. Or wait until price completes a small higher low above the even number or wait for price to go above the top of hammer (arrow right).
Vantage is absolutely correct RE: volatility in the area of big round numbers - be careful. These are the areas where the big players (large banks) make their moves and it always spills over into spot Forex...
Et voil?, as the french say, this is on the USDJPY TF15m, I actually used this system and was very profitable today on this pair, +20 pips TP but could have done much more.
Check the TVI_2colors line and you can see that is sort of scattered, but as you just said, probably it's because of the two indicators overlapped ...
Anyway, once again, thank you for your system ...it's very very nice on the M15-H1
Yes, that strange drawing is a glitch in the way MT4 calculates the size of the indicator window - if you add a zero line to both indys you will sometimes see two different zero lines in the window...
Not using the TVI candles: I passed on those because I like using multiple TVIs, and being able to watch the TVIs move or not move on candles that are going against the indications.
Regret: I think it's good you put all the different versions of the indicators out. If you hadn't, the repainting complaints/comments would just be replaced by complaints about the indicators being to basic, and we'd be a programming / indicator-modding thread.
Sometime in the next week I'm planning on winding this thread down. We've exceeded 1000 posts which seems to me to be more than enough for a simple method.
Before I finish I'll post a summary of what I've learned about ALF/TVI and point out what has changed since the beginning of the thread (amazingly, not much) along with a final posting of current versions of indicators, templates, etc.
I'm more than pleased by the number of people who have "gotten it" with few problems and whose trading has been improved by the use of ALF/TVI.
I'm also disheartened by the people who are struggling - what I've noticed is that many of you are a bit light in the area of general Forex knowledge (SR, retracements, major trends, etc.) but this comes with time and experience - to be repetitious, I firmly believe that screen time and some study will inevitably trigger pattern recognition and your indecision will become a thing of the past.
The majority of people who trade Forex lose money. I think that part of the answer to making money is to think out of the box and do the opposite of whatever the majority is doing. Since most popular indicators are based on "moving averages on the close", I deliberately did just the opposite - neither TVI nor ALF is based on closing prices and ALF uses no moving averages at all.
I recommend and use M15 timeframe but there have been many examples posted by members using everything from M1 to H4 and having success, thus showing the flexibility inherent in a simple system.
All indicators I have created for this method are open source. To find the indicators, click the paperclip icon at the top of any page, then click "hide images" to get rid of screenshots. Be sure to download the most recent version.
Copy the source code to the yourmt4/experts/indicators folder, then shutdown and restart mt4. This will cause a re-compile of all indicators that have been changed since the last mt4 session.
Use the same procedure for templates, but copy them to the yourmt4/templates folder and do a shutdown/restart.
I originally thought this method would be pretty self-explanatory (and said so in post #1). It was that way for some but not for all, and I posted some general rules in post #7. The only rule that has changed is the very first one:
"Don't trade when either line is horizontal, particularly when ALF bisects PA".
Revised through experience to:
"Don't trade when ALF is more or less horizontal and bisecting PA".
Bisecting does not necessarily mean "passing through the body of each candle" - it also means "passing through a group of candles which are alternately above/below ALF". I think everyone gets the idea of this rule - when PA is in a tight range, wait for something better to happen...
There are some essentials for success trading this method.
Trading Time - if you trade during the busiest times of the day, you increase your chances of finding good setups. The first half of each of the three major sessions is best - London, New York, Asian, in that order.
Time Frame - this method is being traded successfully on TFs from M1 to H4. Be aware that longer TF will require larger stops.
Stop Loss - the original rule was, "slightly on the other side of ALF from the direction of the trade". This still holds good, but use common sense - if PA is 50 pips below ALF and you are contemplating a short, ask yourself why you did not enter sooner. If you are trading a retracement, just above/below the top/bottom of the retrace is a good spot for a stop. Be flexible and trade on a TF you can afford to trade.
Exits - if PA returns to ALF almost immediately after you trade, close the trade! Every method has losers. If you are fortunate and the trade becomes a swing or trend move, ALF will begin to follow PA. The closer ALF gets to PA, the more likely that a change in direction (either a retrace or a reversal) is coming. It's okay to take profits when this happens - there will be another trade or re-entry coming up. Same thing if TVI changes direction.
I've observed that when the ALF is steep with a trend price will ride it in the same way that occurs in bollinger band and MA trading.
It contains the retraces until a significant retrace/reversal becomes likely as you mention.
Well, still trading ALF/TVI, of course but I am far from happy with the performance of the TVI.
IMHO, TVI suffers from the fact that is limited by the use of fixed periods (8,8,5 or 12,12,5, etc). ALF, on the other hand (though it does have LookBack and Median periods), does not use them in a restricive way and is not as sensitive to small variances.
I'm still pretty well sold on the idea of using up/down ticks rather than bar close but I intend to search for a new way of using them - sort of an Adaptive TVI.
If and when I discover a better companion indicator than TVI, I'll start a new thread and share with all of you. Keep an eye out for "ALF" as a part of a thread title with "Lou G" as the author.
To say that I've learned as much from you as I've imparted sounds trite but it really isn't - thanks to all for their participation in this thread. I'm sure I'll bump into all of you around these forums.
Lou, I "met" Indrek back on another thread that was focused on MTF trading.
I really believe that if you trade in the direction of the higher time frame trend you will have much better success.
I have a lot of respect for Indrek......so I think his post is one to take note of.
There is no doubt that keeping ones chart as indicator free as possible is desirable.....but knowing the trend of the higher time frame is a must...IMHO
PGPB
Sorry I did not reply sooner - I "know" Indrek as well (had a PM on this subject).
There are many ways to skin the Forex cat and the use of MTF indicators is well-known and used by many. At this point, I prefer to switch TF's to see the larger trend. Nothing against those who prefer MTF. I try very hard to be a devout pragmatist
This is probably one of the reasons Lou is looking for a different filter for the Alf entry system.
Yes, exactly. Moving averages can be very helpful - IF you understand how they work and what they are telling you.
I'm close to creating a new entry method for ALF that uses no moving averages at all - beginning today, I'm at the "putting in screen time" phase, watching the new method work and looking for ambiguities, problems and outright errors. Coming soon to a forum near you...
ALF/TVI - Simple, effective daytrading
ALF/TVI - Simple, effective daytrading
Er, you can just post the TVI trades!
. Do not get me wrong, my intention were good
Thanks Lou and all of you guys efforts.
