Slingshot 30M & 1H - The 2nd Coming......

Okay...I will be in and out, but I will get what I have been using for rules for this system in great detail.....

1st of all I want to thank billbss for bring this method on a different thread. Although we determined that the original method was curve fit, I really liked the concept and tried using my own versions of momentum to make trades with. Another words, I only made trades in the direction as I define momentum. Whether this is any better than the original method cannot be back tested, but on forward testing it has be very good. And, even on recent days when the original method was terrible, this filtered version performed extrememly well.

I am now testing 4 different strategies for entering the market. Some of these strategies give us overlapping trades, but many times they are completely different. My thoughts at the moment are to actually trade all 4 strategies simultaneous becuase as i have seen, some work well at times and others work better at times and yet others sometimes don't work at times. The idea is that if 1 entry isn't working, the others will pick up the slack. I am still testing this and will continue to record the trades nightly.

Basics of the System-

1. Trade from 06:00 GMT to 19:59:59 GMT except on Fridays when you should end trading at 17:59:59 GMT
2. I am testing both the H1 and M30 TF's for all 5 pairs listed.
3. Do not trade the London session during a London Bank Holiday and do not trade the US session during a US bank holiday.
4. Use these initial Stop Loss settings
   1. EurUsd - 35 pips
   2. EurJpy - 45 pips
   3. GbpJpy - 55 pips
   4. GbpUsd - 45 pips
   5. UsdJpy - 25 pips

5. Keep the trade open until any bar closes at break even or you are in profit or your stop loss has been hit
6. After the close of the bar when you opened your position, if you are not in profit and in a long trade, move the s/l to 1 pip below the low of the bar you opened your position on and vice versa for a short trade
7. Here is an indicator that you can put on your chart. When the bar goes to blue you enter long and when it goes to orange-red you enter short, but only in the direction of your filter. As long as you leave your chart open, the bars will not re-paint. When you close your chart however and re-open it, they will revert to knowledge that is known, so backtesting this system using this indicator is futile.
   Attached File(s)

   slingshot_bars.mq4   29 KB | 1,589 downloads | Uploaded Jan 28, 2009 12:36am

Long entry-

1. Current Bar goes below the Low of previous bar. Then, comes back above the Close of the previous bar.
2. Enter 1pip + spread above the Close of previous bar.

Short entry-

1. Bar goes above the High of previous bar. Then, falls back below the Close of the previous bar.
2. Enter 1pip below the Close of previous bar.

Okay....now we need to filter our trades so we are only taking trades in direction of momentum. There are 4 different filters that I am testing, each one independent of the other. the first filter is described on this 1st post below. The additional 3 filters i will post a link to when I get them on a spereate post. Once again, I think it would be best to use all 4 systems to make trades, but only testing will tell.

Filtering the Trade:

1. MACD Filter - Listed below in this post
   1. Here is the indicator for this filter only. When a blue line is on your chart, look for long trades only, and when a red line is on your charts, look for short trades only. You can change the MACD settings and also the number of back lines to be left on your screen. As of right now, default settings are what I am using.
   2. Attached File(s)

      MaxMacdTrendSetter_v3.mq4   7 KB | 1,495 downloads | Uploaded Jan 27, 2009 11:54pm
   3. How this filter is applied is listed below in this post

2. Advanced MACD Filter
3. ZZI Filter - See post #115 Here
4. Stochastic Filter - See post #114 Here

This filter uses MACD in a momentum type of way to determine trade direction and it has been working pretty good. Is there a better way? Maybe, but for now this is what I have been using. MACD settings should be set to 12,26,9

You will see that the filter is colored. MACD is blue when it is above 0 and red when it is below 0. Very simple right? Okay...here is where it gets tricky.....Each time the MACD goes red and then goes to blue, I call this a Closed Red Segment. Every time the MACD goes blue and then goes red I call this a Closed Blue Segment. Hopefully this is all clear.

Okay, so now you are seeing Closed Red Segments and Closed Blue Segments on the MACD. Now it is time to use those close segments to determine the direction of the trade. Each Closed segment is it's own entity and to determine trade direction you will be comparing a current Open Red Segment (one that is still red) to the last Closed Red Segment or the current Open Blue Segment to the last Closed Blue Segment.....here is a picture that explains the segments. The MACD indicator is the 2nd indicator down and is explained by text on the chart.

Okay, you are always comparing any open red segment to the previous closed red segment and any open blue segment to the previous closed blue segment.....now comes the next part....using these segments to determine trade direction.....

First thing you will do when you open a chart and put the MACD on is is to determine current trade direction. You do that by determining the last known breakout point using the macd by comparing blue segments to blue segments and red segments to red segments. Determination of your 1st trade direction after opening your chart you will use both closed segments and the open segment. Once trade direction is determined you will then only compare open red vs closed red and open blue vs closed blue....let me explain in a picture....



so...when you put on the MACD on your chart for the 1st time, you would conclude that at the moment we are only looking for short trades.

Another example of this with explanation can be found Here on post 231

Okay...now that we have determined our initial trade direction, all we need to do is maintain this direction. Please remember that now that we have determined initial trade direction we will always be only comparing an open red segment with the previous closed red segment and an open blue segment with the previous closed blue segment.

So I will now post another chart with our current situation..... we are currently short and so until we get a new high, the thought is to stay short. I have marked the high bar of the last closed blue segment. If the next open blue segment gives us a bar that closes with a higher value than this bar, then we will start looking for long trades, and we stay long until a red bar closes lower than that lowest bar on the last closed red segment.... as yo ucan see I am using a red horizontal line to help me easily recognize trade direction.



Okay, so now I hope I have adequately explained how I am determining trade direction.

Looking forward to your postings.

thx,
todd

thx damonl, my problem is which is 1st bar and what's B/E ?

1st bar - bar on which you entered into the trade (aka entry bar)
B/E - break even
Correct me if I am wrong

Hello,

Thank you for all the improvements and input.

I am looking for an indicator which has an alarm in the completion of the 30 min candle.

Someone have this indi ?

Here is my backtest with the EA v5


Thank you in advance.

B

I think the first order of business is to establish what market this type of system best works.

When I ran the EA through the backtester, I turned on visual mode, and I noticed something. Most of the trades in the system were against the prevailing trend. If a candle ultimately closed long, I would see this trade initiated when the lower wick is created, and that is what I believe this system is best equipped for catching: the "retracement wick". Instead of using some sort of lagging indicator to try and determine the trend, I propose we use a different type of filter.


If the previous bar broke the 20 period high/low, then use this entry strategy.

RR: Sounds reasonalbe

Thank you damonl for starting this thread.

And thanks to you RR for assisting in developing an EA.

I've been fooling around with the SlingShot EA and trading the original method from the Slingshot-30 Min. PA System on the thread by billbss.
I'm still learning it, but I would like to see how this version works too. It looks like it has a lot of potential.

I'll do what I can to help you test it out.

Dave

Guys....I needed sleep..I first need to give you the filter before you should try trading this.

Here are the results so far today with the filter.....

EurUsd 1 for 1 +13

GbpUsd 5 for 5 +29,+26,+21,+5,+15

UsdJpy 2 for 2 +2, +5 with 1 open trade in profit....

That gives us 8 for 8 for 116 pips

I will go and give you the filter now ...in the 1st post.

Hey RR....yes, I have been using MACD Momentum as the filter and it has worked good. I just have not put it in post #1 yet.....I will go and do that now. Whichever way momentum says, we trade.

We close the trade at the 1st bar that either puts us at B/E break even or in profit...this bar could be 5 bars into the trade...hope this helps.

You have tested an EA that does not even come close to rules for this thread. Please do not test any EA from the other thread in this thread again...thank you.

Okay...I think I have written all the rules that I have used in trading this an dgetting the results that I have. I have no method of backtesting, but forward testing so far has been really good.

I need to go now and won't be back until later...I will get back to respond to my messages later....

Have a great day trading.....

ok damonl don't blast me for asking another question


On your segments, let's say you have a blue segment that has a higher value than the prior, so you are looking for longs.. then the next red segment breaks the low of the prior red segment, so you are now looking for shorts.

Then the next blue segment does not make a higher high than the last blue segment, so you ignore it.. then you have another red, so you stay short.. then the very next blue segment breaks the high of this last blue segment but does not break the high of the one prior to it (if you understand this )... does this make you look for longs now?

GU just had this happen (I think).. actually one macd bar was blue and closed higher than the prior segment, just not the one prior to it. The trade failed, so I was wondering if it mattered to you.

http://i42.tinypic.com/2v28eas.jpg

Hi damonl,
Could you post a couple screen shots from this weeks trades so that I fully understand your system?

Thanks,

AZ

llambert3 -
In your example, the trend direction would be up. The single blue bar "group" was higher than the prior closed blue group, therefore the trend = up. In this case the single blue bar is a "higher high". The currently open red group on your chart has not gone lower than the last closed red group (= higher low), therefore the trend remains up. Hope this helps.

Gary

Damonl, so are you taking trades on the 30 in the direction of the H1 per your segments? Or are these TF charts being traded independently?

Opppsss..I think I forgot one thing...MACD settings should be 12,26,9....but yes you have it right, I just forgot to give the MACD settings correctly.

As of right now, they are traded seperately, but it is something that I have kind of kept an eye out for and I have concluded at least for the moment they don't need to be in the same direction. Maybe in the long run it will be better, but without programming it into an EA, it is hard to back test...

Definietly something to keep an eye on though.....

MACD settings should be set to 12,26,9 and not used as the default settings.

This is just what I have been testing, maybe there area better settings that we should use.