Some of you will have come to this thread as a link I have posted from my very first thread FREE EA - Piggy n The Middle and some will not.
Here is a link to my first thread: http://www.forexfactory.com/showthread.php?t=587001&goto=lastpost in case you have not visited. It is a thread of a grid EA that I have created based inspiration from Remon Reffat's strategy however it does not resemble it in many way. You can read more about it if you wish to visit.
During a period of saturation from my first EA, I started playing around with the 3 Level ZZ Semafor Indicator which I believe is a very useful indicator in many applications. This particular EA I am developing and is in an advance stage enough for me to be posting here, I wanted it to replicate what a trader should be doing when trading as close as possible WITH use of indicators.
For anybody that knows me, I am not a big fan of indicators AT ALL. I come from a background that I studied Elliott Wave Theory and Gann Trading Methods amongst a few other strategies that involve very few indicators at all unless you consider a trend line drawing an indicator.
Out of this EA I first started with the 3 Level Semafor and tried to replicate an action of identifying the following.
- Identify the highest high
- Wait for a swing low and then last swing high
- Re-enter on break of swing low
- AS WELL AS THE REVERSE IN A BUY SITUATION
Unfortunately, the 3 Level Semafor repaints badly but I did manage to get around this. I also managed to make it trade reasonably well but not to any satisfaction that would have been worth posting in FF or trading in a live scenario.
SOooo... What did I do? I went on my MT4 and looked at codebase to see if there was ANY indicators worth using at all. I like playing with the raw essence of indicators to see what they can do on their own. I am still of the opinion that most of them are rubbish! HOWEVER, I filtered the indicators on MT4 by their rating of 5 Star and going down. I never made it to 4 Star, maybe 4 1/2. Downloading and downloading more, I don't know how many. Maybe about 50 or so to start of with and made notes on where to pick up from as if I didn't find anything else, I was going to continue to see if I had anything of worth for my quest of good indicators.
I'm not going to say that what I found is some sort of golden indicator. It isn't. Most indicators need to be evaluated properly to which pair to use it with as well as not just the timeframe. From OOTB (Out Of The Box) settings, what I found is something that works YET AGAIN best to my view with the GBPJPY pair on a 5 min TF.
THE SYSTEM (with the default settings)
- 3 Level Semafor Identifies the HH or LL with No. (3)
- The other indicator is another Zig Zag indicator called StreamAmp ZZ. This is the indicator for entry signal.
- ENTRY BUY: A Semafor (3) High and a crossover from BLUE through ORANGE must take place from bottom crossing up within a range predetermined. 1-10 candles looking back from the current bar is the default setting.
- ENTRY SELL: A Semafor (3) Low and a crossover from BLUE through ORANGE must take place from top crossing down. withing a range predetermined. 1-10 candles looking back from the current bar is the default setting
Since the version 1 of this EA, I have decided to edit this POST 1 with version 2 as the original EA had the same close conditions and the open conditions. Although it was working ok, v2 is far by any shadow of a doubt a better system.
The default settings are what works best in my opinion on the 5 min TF with the GBPJPY.
*** Please note that I have left an option for breakeven point on this EA but did not find it profitable at all in testing.
*** This setting should be set to the same as your take profit if you wish not to use it.
I have attached all that you need to setup. Please be aware that you do not need the indicators on your chart for this. It will only slow down backtesting although you should run it through a few times with the indicators on so you know what is going on and how the EA trades.
I personally have focused a lot more on the GBPJPY than any other pair. I noticed that the settings of the GBPJPY do not perform as well on other pairs. Also, I do think that the 5 min TF is the best TF to use although you have the capability to alter nearly everything that can be altered for experimenting.
For added information, I think it is useful that you know some of my trials and errors on this.
- Too many lookback candles will trigger bad trades
- Not enough lookback candles will trigger less trades and MAY trigger better trades on different TFs.
- I believe that the optimum settings is to backtest your pair and TF for the optimal trailing stop and only use this!
- For the GBPJPY on a 5 min chart I believe this to be 60 pips
I think that's about it!
What I would like to do with this moving on is to find another indicator or possibly two, that will filter the bad trades out. I am willing to try any of anybody's ideas on condition that you can prove to me that the idea works. Otherwise, I am going to be spending too much time on any idea that comes to post.
Please if you are going to participate in development with a filtering indicator, I will need screenshots of your choice indicator in action and I will want to see where it would have avoided fully stopped out trades on both buy and sell side without having taken out good trades out.
I don't expect 100 screenshots of every situation but at least show me a screenshot of the BUY and SELL condition that would have not trades with your choice indicator and let me know that you have checked it quite a few backtest conditions to say you think that it is not interfering much with the profitable trades.
Hopefully this thread will be as good if not better than my first!
Let's Make This Work!