Good day to you,
This is a continuation journal of the previous one started, where I investigated and attempted to trade cycles. The main reason for the new journal, is to get things organised and concise.
Moving Averages are still used as the "heart" of the "system". I have however decided to apply Volume to Weighted MA as the driver. Applied with a simple trend indicator, it is very possible to scalp successfully as well as get into longer term trades.
Now - we know that MT4 volume indication is far from ideal - some may say it is total rubbish - but it may be good enough to provide an edge. It remains important to me to apply stuff with as little lag as possible. I do not want to enter trades when a possible move is 80% done. I wanna get in as early as possible, but with a positive expectancy.
Here is some of the reasoning as to why Volume of MA will be applied:
A Simple Moving Average ( say 200) - computes the average price over the set amount of bars - giving equal importance to all, even the Price of 200 periods ago. Weighted MA will give more importance to the latter price, as opposed to the earlier price - in theory giving " faster" change, or then a movement closer to the current PA.
Adding volume to this, the MA will rather attempt to follow average volume coupled with PA. Nutshell. Within this, I can then apply Triangular Moving Average crosses to find possible legs / waves or cycles. One can also scalp excessive moves away from the Volume WMA as a risky setup ( within the bigger framework) to benefit in both directions.
It all sounds "wow" - but it is actually a very basic strategy.
I will post the indicators and template soon, as well as some charts.
Regards
This is a continuation journal of the previous one started, where I investigated and attempted to trade cycles. The main reason for the new journal, is to get things organised and concise.
Moving Averages are still used as the "heart" of the "system". I have however decided to apply Volume to Weighted MA as the driver. Applied with a simple trend indicator, it is very possible to scalp successfully as well as get into longer term trades.
Now - we know that MT4 volume indication is far from ideal - some may say it is total rubbish - but it may be good enough to provide an edge. It remains important to me to apply stuff with as little lag as possible. I do not want to enter trades when a possible move is 80% done. I wanna get in as early as possible, but with a positive expectancy.
Here is some of the reasoning as to why Volume of MA will be applied:
A Simple Moving Average ( say 200) - computes the average price over the set amount of bars - giving equal importance to all, even the Price of 200 periods ago. Weighted MA will give more importance to the latter price, as opposed to the earlier price - in theory giving " faster" change, or then a movement closer to the current PA.
Adding volume to this, the MA will rather attempt to follow average volume coupled with PA. Nutshell. Within this, I can then apply Triangular Moving Average crosses to find possible legs / waves or cycles. One can also scalp excessive moves away from the Volume WMA as a risky setup ( within the bigger framework) to benefit in both directions.
It all sounds "wow" - but it is actually a very basic strategy.
I will post the indicators and template soon, as well as some charts.
Regards