(binned per thread starter’s request) Custom Indicators for TMA-A

Over at the thread "MM (Market Maker) Detective Indicator" (https://www.forexfactory.com/showthread.php?t=911239) the collection of custom indicators has grown in number and become too numerous to manage in Post #1 . So I've decided to park them here. This is intended as a read-only thread where I can announce new releases, updates and upload the latest versions. Please do not post in this thread.

Here are links to the latest (and greatest) versions of all the indicators.

BDX Strategy -- Latest version:


BDX Strategy -- Previous versions:








The *.zip file includes the following software:
R4M-BDX-ADR.ex4
R4M-BDX-DashboardEA.ex4
R4M-BDX-AllPairs.ex4
R4M-BDX-EA.ex4
R4M-ATRDashboard-Alerts.ex4
R4M-HeikenAshi.ex4
R4M-HeikenAshiTransitions.ex4
Heiken_Ashi_Smoothed.ex4
R4M-ConsecutiveCandles.ex4



================================================================

BD Strategy -- Latest version: (EOL -- "End Of Life")


The *.zip file includes the following software:
R4M-Detective.ex4
R4M-Detective-MTF-HLF.ex4
R4M-LiquidityGaps.ex4
R4M-Zone2Filter.ex4
R4M-Zone2Indi.ex4
R4M-AverageBarSize.ex4
R4M-ADRIndi.ex4
R4M-SessionsIndi.ex4
R4M-ADRHistIndi.ex4
R4M-TmaTrue-M1.ex4
R4M-TmaTrue-HTF.ex4
R4M-ADR-MultiPairs.ex4
R4M-SpikeHunterIndi.ex4
R4M-FXRSI-MomentumIndi.ex4
R4M-Nigpig-TmaSlopeIndi.ex4
R4M-TMA-Calibrator.ex4
R4M-M1-TMA.ex4
R4M-MomentumFilter.ex4
R4M-RsxExit.ex4
R4M-BD-ADR.ex4
R4M-BD-ADR-DashboardEA.ex4
R4M-BD-ADR-AllPairs.ex4
R4M-BD-ADR-EA.ex4
R4M-BD-ADR-AllPairsEA.ex4
R4M-TTFractals.ex4
R4M-ConsecutiveCandles.ex4
R4M-TTFractals-Plus-ConsecutiveCandles.ex4

MM (Market-Maker) Detective Indicator

MM Detective shows the "lifetimes" of TOPS and BOTTOMS on a price chart.



Looking at the price chart from left-to-right, the purple lines begin at a TOP and extend to the right until they are "taken-out" or removed by the price moving upward. Similarly, the blue lines begin at a BOTTOM and extend to the right until they are "taken-out" by the price moving downward. Using this indicator you can clearly see the "lifetimes" of TOPS and BOTTOMS.

A TOP occurs when the price moves downward. A BOTTOM occurs when the price moves upward. Stop Losses accumulate above and below the price line. In the case of Short trades (selling), Stop Losses accumulate above the price line, and in the case of Long trades (buying), Stop Losses accumulate below the price line. When the MM initiates a spike upward, Stop Losses from Short trades are taken-out. When the MM initiates a spike downward, Stop Losses from Long trades are taken out.

The pattern of ranging or trending prices followed by a spike occur over and over again -- every symbol and time frame. Furthermore the length of the spike is very exact -- just long enough to take-out the targeted Stop Losses -- no more and no less.

MM Detective MTF-HLF Indicator ('MTF' refers to multi-time frame, 'HLF' refers to higer-level fractals).

This version includes support for both MTF (multiple time frames) and HLF (higher-level fractals). MTF had always been in the works, but HLF was not. It was recently introduced to me by @SwingMan -- so he deserves all the credit. My sense is higher-level fractals do a better job detecting TOPS and BOTTOMS -- we'll see.



The purpose of the MM Detective MTF-HLF indicator is similar to its predecessor -- to detect TOPS and BOTTOMS that serve as potential MM targets. This new version adds support for MTF and HLF.

MTF Support: This means it can use bars from different time frames (M1, M5, M15, M30, H1, H4, D1, W1) to compute TOPS and BOTTOMS and display them all on a single chart. I don't think I need to say more about what the advantage is.

HLF Support: Turns out there are more to fractals than I initially imagined. The simplest type of fractal typically includes 3- or 5-bars -- and is referred to as a Level-1 fractal. MT4 comes with a Level-1, 5-bar fractal indicator. I happened to use it for this indicator because it seemed to do a nice job of picking-out TOPS and BOTTOMS -- as others have found. From @SwingMan I have since learned about Level-2 and Level-3 fractals, which can also be used to identify TOPS and BOTTOMS -- many of which overlap with the same TOPS and BOTTOMS identified by Level-1 fractals. In our context, a fractal consists of a midpoint plus left and right shoulder. A Level-1 fractal has a middle bar plus one bar as its left shoulder and one bar as its right shoulder. A Level-2 fractal also has a middle bar -- but for its left shoulder there is a Level-1 fractal and for its right shoulder there is a Level-1 fractal. A Level-3 fractal again has a middle bar -- and guess what it uses for left and right shoulders? That's right -- Level-2 fractals.

MM Liquidity Gaps Indicator

Liquidity gaps -- also referred to as "hidden" gaps -- reflect unfilled (untransacted) BUY or SELL orders. My working hypothesis, until someone comes up with something better, is the MM desires to transact these orders. Furthermore, the only way to make money in forex is for prices to move vertically up and down, and in order to move up and down there must be liquidity. Whether the MM manipulates prices to keep liquidity fluid or whether it manipulates prices to prevent world-wide commerce from shutting down, I don't know. Regardless, liquidity is vital.

Since there are a fixed number of units of each currency then every BUY must be matched by a SELL. Suppose a large BUY order comes in at a certain price, but there are no units of that currency available at that price. The MM has to shake the tree a bit to harvest some units to satisfy the BUY order. This is where the manipulation comes into play when you see how target levels are created to lure traders in one direction or the other -- the goal being to close them out, free-up units of currency, and provide liquidity necessary to transact unfulfilled orders. I don't know for sure whether this is how it all works -- but for now it provides a context for me to explain MM psychology.

From @George I've learned about two types of targets:
(a) Target levels (created by TOPS and BOTTOMS lines) that are created by the MM to lure traders into thinking there are support or resistance levels. The intent is to either encourage traders to open a new position or adjust their stop loss (for later harvesting by the MM).
(b) Liquidity gaps -- prices that need to be revisited because unfilled orders remain to be transacted.

The MMDetective indicators were created to help identify the target levels created by TOPS and BOTTOMS lines.
The MMLiquidityGaps indicator was created to detect liquidity gaps which are often hard to detect by eye.

Liquidity gaps can be displayed as lines (which I prefer) or as boxes. Bullish liquidity gaps get filled when the MM pushes the price down, while Bearish liquidity gaps get filled when the MM pushes the price up. The reason I prefer lines is because gaps are not necessarily filled by a single price movement -- that is, the MM may take multiple bites out of the gap and it is easier to see this with lines. The images below provide a flavor of what I mean:



As liquidity gaps get filled you may prefer they no longer be displayed. The indicator provides a setting that allows you to control whether or not filled gaps get removed. When filled gaps are removed then the only gaps that are displayed are those which remain as active targets.

MM Zone2 Indicator

MMZone2Indi is probably quite different than most others you are familiar with. It divides a price chart into two zones -- Zone #1 is where the MM's manipulation and buy / sell / stoploss fest occurs, and Zone #2 is the aftermath of a liquidity gap where the MM has "shown its hand". There is an important underlying assumption -- liquidity gaps get filled a very high percentage of the time (like > 95%). If you disagree with the statement, then this indicator is NOT for you.



We've discussed dividing a price chart into two regions or zones. Zone #1 is where most of the trading occurs and where the MM performs its manipulations. There is no reason not to trade in Zone #1 -- just be aware of the manipulation going on. This is what we learned from @George's thread.
When asked for some guidance on how one should trade in the presence of all this manipulation, @moodybot provided a clue -- wait for the MM to show its hand. And that is what led to the idea of a Zone #2. Zone #2 is the region immediately following a perturbation -- where the MM closed an accumulation of stop losses to generate liquidity. The perturbation comes in the form of a price spike. A side-effect of the price spike is that a liquidity gap is formed. I don't think that is necessarily intentional -- rather, it is the result of an unexpected spike that skips over a range of prices.

In the immediate aftermath of the perturbation the system is in an unstable state and the price is out of whack. So, the MM probably desires for the system to return to a "fair value" state -- i.e. re-establish an equilibrium between buyers and sellers. This small window -- where the MM probably limits its manipulation -- I'm calling Zone #2.

There is no "official" definition of where Zone #2 begins and ends. This is strictly empirical. But it's interesting and introduces yet another approach to trading. The MMZone2Indi indicator uses the immediate aftermath of a liquidity gap to define the start of a new Zone #2. That is, Zone #2 begins at a newly formed liquidity gap. But where does it end? I can not say for sure. However, what I've done here is to use the first 7-bar fractal to define the end of a Zone #2. There is nothing magical about using a 7-bar fractal -- I just needed something to act as a fence post between Zone #2 and the next Zone #1 because the MM certainly does not leave anything behind that could serve as a boundary.

Here are some general trading rules -- they are not carved in stone and may change as we learn more:
1. Define Zone #2 -- where the LHS (left-hand side) is a newly-formed liquidity gap and the RHS (right-hand side) is a 7-bar fractal pointing in the same direction as the liquidity gap.
2. Within Zone #2 we are looking to trade in the opposite direction of the LG (liquidity gap). That is, after a bullish LG we are looking to go SHORT, and after a bearish LG we are looking to go LONG.
3. Within Zone #2, we need a filter / indicator / magic wizard to help us decide the timing of a trade. Currently I've chosen to use the default Stochastic oscillator since provides both direction and timing components. When the Stoch crosses '80' downward then you SELL, and when the Stoch crosses '20' upward then you BUY. The colored dots align with the Stoch crossing '20' upwards or the Stoch crossing '80' downwards.

This new idea of trading from Zone #2 looks promising, but it is not perfect. Additional rules / filters can be added to improve accuracy.

One important question still remains -- when to Exit. If you are greedy and wait too long, then your winning trade turns into a loser. It looks like if you are willing to accept small wins then positions that were opened within Zone #2 have a high win rate. Perhaps judicious use of SL and TP will be good enough.

Another point -- I really like using @Nih98's TMA indicator and I've included it in the example above. Though not required, it does provide visual context so you can better determine whether the current perturbation is strong or weak, which might influence your decision to make a trade within the current Zone #2 or pass.

MM Zone2 Filter



The MMZone2Filter indicator differs from MMZone2Indi in that it can be attached to either the main window or a subwindow of a chart. The setting 'Which Subwindow' specifies which subwindow will be overlayed with the Zone2 shadows. In addition, Zone2 rectangles are still drawn in the main chart.

If you are interested in trading the "MM Show Hand" region (immediately following a spike), then this is the best I can offer. From the screen shots above you can see how the "filter" overlays your favorite indicator. In this way you can continue using your indicator and, at the same time, know whether you are in Zone #2 or Zone #1.

MM Average Bar Size



MMAverageBarSize is a simple indicator that displays the average body and HiLo size (in Pips) for each of the symbols in your Market Watch windows. The setting 'WhichTimeFrame' can be used to specify a Time Frame other than the current one.

Turns out that candle sizes are not created equal -- they can differ quite significantly from one pair to another. When trading M1 this probably becomes more of an issue because the spread takes a bigger bite out of each trade. I think this is why @George (and others) like trading GBPJPY -- its bar size is nearly 3x larger than EURUSD.

MM Sessions Indi



MM-SessionsIndi can be used to highlight the different Forex sessions -- Tokyo, London, New York and Sydney. Using the buttons along the left-hand side you can toggle which sessions are highlighted and mix and match as you wish. If you look closely, it is apparent that price action is not created equal for each session -- especially when you experiment with different pairs. This indicator can be used standalone or overlayed on top of other indicators.

MM ADR Indi



MM-ADRIndi is used to display the Average Daily Range (ADR) over the past N days (where the default for 'N' is 20). This ADR indicator is more graphical than most because I chose to show how well (or poorly) the ADR overlays the past N days. The ADR is an average -- so for some days it brackets the High and Low prices well and on others days not so well. This indicator can be used standalone or overlayed on top of other indicators. In one of the screen shots above you can see that I've combined it with the MM-SessionsIndi.

MM-ADRHistIndi



MM-ADRHistIndi is another ADR-based indicator but probably quite different than any other you may have used in the past. Average Daily Range (ADR) is
typically reported for only the current bar. The MM-ADRHistIndi goes a step further and provides a visual context for monitoring the ADR. The ADR
histogram in the subwindow computes and displays the ADR value for each bar. The values range from [0,1], depending on how much of the ADR remains
at any point during the day. The ADR is an average, so occasionally the value will exceed '1' if a spike occurs during the day. The ADR begins at the Asian open session. This indicator can be used standalone or overlayed on top of other indicators.

One interesting observation, you can see that on most days the ADR reaches '1' just as the London session ends. That may not be a surprise, but at least now you have visual confirmation. You wouldn't have observed this using a standard ADR indicator. As far as how to take advantage of this observation, I'm not sure yet. But it's interesting to take note.

For those who are unsure who / what is the MM we're referring to -- here is a snippet from post #1405. It is worth repeating here:

https://youtu.be/lu_VqX6J93k

Jekyll Island is a resort off the coast of the state of Georgia in the US. It used to be a resort for the ultra, ultra wealthy. Back in the 1920's there was a world-wide economic depression with no hope in sight. There was rioting in the streets. A small group of very powerful men -- bankers from around the world -- secretly met at Jekyll Island. The outcome was the US Federal Reserve Bank. It has a nice name -- you'd think it was overseen by the US government -- but it is not. It is a non-elected, private institution. The US government is allowed to appoint one member to the board, but neither Congress or the President can tell the Federal Reserve Bank what to do. Furthermore, it is not required to act with transparency -- since it is a private institution. The story of Jekyll Island is not a conspiracy theory. In fact, one of the men who participated in the initial meeting even wrote about it in his autobiography.

MM TmaTrue M1



MM-TmaTrue-M1 is a TMA indicator based on the non-repainting TmaTrue indicator. It displays 4 "Pressure Zones". This particular version is intended for use on M1 charts since its ATR settings do not fit well with higher time frames.


Credit goes to @SirOrigami and @Nih98 who posted the M1 settings in the "MM (Market Maker) Detective Indicator" thread.

MM ADR Multipairs Indicator



MM-ADR-Multipair is an ADR-based indicator. On the surface it may not look fancy -- however, because it supports multipairs and alerts, then it may well become one of the more useful indicators in your toolbox. Also, going forward, I envision this will be an important "building block" for future indicators I've been thinking of.

The indicator computes the ADR for all the symbols in your Market Window. If you wish to include / exclude symbols then you'll need to do that from the Market Watch window.

When alerts are enabled, then both an Alert Box will pop-up and a notification will be sent to your mobile device (if your MT4 session has been configured to push notifications).

To make it easy to experiment with the ADR fraction that triggers alerts, I've added buttons to the lower-right corner that increment / decrement the ADR fraction.

Also in the lower-right corner is a button for toggling alerts ON/ OFF. I found it useful to initially disable alerts until I settled on a particular ADR fraction, and then enable alerts. Otherwise, you'll receive a bunch of alerts while you are fiddling with the ADR fraction setting, since each time the ADR fraction is changed then it's like starting over.

MM-TmaTrue-M1 Indicator (updated)
MM-TmaTrue-HTF Indicator



MM-TmaTrue-M1 and MM-TmaTrue-HTF are TMA indicators based on the non-repainting TmaTrue indicator. They display 4 "Pressure Zones". MM-TmaTrue-M1 is intended for use on M1 charts since its default ATR settings do not fit well with higher time frames. MM-TmaTrue-HTF is intended for higher time frame charts. Credit goes to @Nih98 who posted the M1 and HTF settings -- thanks friend!!

These indicators differ from other TMA indicators in that addition to displaying TMA bands they also highlight extreme points that poke out above or below a TMA level. There are 5 TMA levels and using the buttons in the lower-right corner you can select a "breakout level". If a Bullish bar pokes above a breakout level the indicator will show a magenta dot, indicating a potential downward reversal. And if a Bearish bar pokes below a breakout level the indicator will show a blue dot, indicating a potential upward reversal.

In the image above the charts display breakout levels '2', '3', '4', '5' -- where '2' is the most relaxed and '5' is the most strict. You can see as the breakout level increases then fewer extreme points are displayed.

MM IRUTM Trading Indicator (MM-IRUTM-TradingIndi.ex4)

This indicator goes further than any of the previous ones I've shared. It is based on both TMA and ADR -- but it goes a step further in that it generates candidate signals for reversal Entries. You are still on your own for Exits, but it looks good for Entries.

The indicator does not use any secret sauce -- it's just a bunch of source code from various sources or that I've written. The only "secret" portion is the M1 TMA settings that it uses, which I've posted below:

A TMA band is defined by 3 parameters -- ATR Multiplier, ATR Period and HalfLength. Below are the settings I'm using in the new indicator:

double AtrMultiplier1 = 10.0;
double AtrMultiplier2 = 14.0;
double AtrMultiplier3 = 20.0;
double AtrMultiplier4 = 26.0;
double AtrMultiplier5 = 32.0;
double AtrMultiplier6 = 38.0;
double AtrMultiplier7 = 44.0;
double AtrMultiplier8 = 50.0;

int HalfLength1 = 480;
int HalfLength2 = 480;
int HalfLength3 = 480;
int HalfLength4 = 480;
int HalfLength5 = 480;
int HalfLength6 = 480;
int HalfLength7 = 480;
int HalfLength8 = 480;

int AtrPeriod1 = 1440;
int AtrPeriod2 = 1440;
int AtrPeriod3 = 1440;
int AtrPeriod4 = 1440;
int AtrPeriod5 = 1440;
int AtrPeriod6 = 1440;
int AtrPeriod7 = 1440;
int AtrPeriod8 = 1440;



The above screen shot shows the most important elements of the indicator:
1. In the background you see @Nih98's TMA. I like including this because it provides a "context" for the PA -- i.e. can quickly visualize whether the price is trending, consolidating, ranging, etc.
2. The shaded areas represent 0.75 ADR. If you recall @rosalieone's observation, reversals frequently occur within the first 0.75 ADR.
3. M1 TMA bands (ATRMultiplier 10 and 14) are overlayed on top of @Nih98's TMA bands. This is the glue. These M1 TMA Zones serve a similar role as @George's target levels. You do NOT trade toward the M1 TMA Zones but, rather away from them. When the price enters an M1 TMA Zone then it becomes a candidate signal. 'Candidate' does not mean that you necessarily open a BUY or SELL -- rather, you now take into consideration other clues or filters.
4. The purple (SELL) and blue (BUY) dots mark the candidate signals.

Even though the chart above is M30, my preference these days is M15.

So, in terms of what the indicator looks like that's basically it. Not too cluttered, I don't think. It's the overlayed M1 TMA Bands and ADR shadows that I think make it rather unique.

MM FX RSI Momentum Indicator

This indicator is based on @Nih98's FX RSI indicator (https://www.forexfactory.com/showthread.php?t=915096).



The FXRSI Momentum indicator is intended to be used as a filter -- that is, to distinguish between true and false reversal signals, and is used within the IRUTM indicator. I thought it could be useful for other purposes and, so, decided to create a standalone version that you could overlay on a chart.

I'll explain how it works. In the screen shot above the IRUTM indicator is attached to the main window, @Nih98's FX RSI indicator to the first subwindow, and MM-FXRSI-MomentumIndi.ex4 to the second subwindow.

On the left-hand side I've marked a Bullish reversal -- in the main window you see the signal (blue dot), in the first subwindow you see the slope of the aqua-colored line is upwards AND below the pink MA, and in the second subwindow the MM-FXRSI-MomentumIndi shows a blue dot -- indicating upward momentum. So -- all three indicators are consistent with one another.

On the right-hand side I've marked a Bearish reversal -- in the main window you see the signal (purple dot), in the first subwindow you see the slow of the aqua-colored line is downwards AND above the pink MA, and in the second subwindow the MM-FXRSI-MomentumIndi shows a purple dot -- indicating downward momentum. Again, all three indicators are consistent with one another.

Elsewhere I've discussed how (most) all trading strategies can be broken down into signals and filters -- and here it is again. The main chart shows a signal and the subwindow uses a (momentum) filter to confirm the signal.

A couple additional notes:
1. The vertical lines are drawn by the MM-FXRSI-MomentumIndi and can be toggled ON / OFF.
2. My interpretation of how to use @Nih98's FX RSI indicator may be different than you might expect -- this is because we are trading reversals, rather than trends. Also, note that the MM-FXRSI-MomentumIndi makes use the of slow, pink MA. When the aqua-colored line is above the slow MA then we are only looking for downward momentum, and when the aqua-colored line is below the slow MA then we are only looking for upward momentum. Again, this is because we are trading reversals. This may be obvious, but I think it is important to understand.

MM nigpig TMA Slope Indicator

The MM-Nigpig-TmaSlopeIndi indicator is based on the one shared by @nigpig in the thread "MM (Money Maker) Detective Indicator" -- here's a link:
https://www.forexfactory.com/showthread.php?p=12329137#post12329137

The MM-Nigpig-TmaSlopeIndi indicator measures the slope of a TMA band. I've included it here because I may incorporate it as a filter in the IRUTM indicator to assist in distinguishing true signals from false positives.

MM TMA Calibrator Indicator
MM M1 TMA Indicator

MM-TMA-Calibrator.ex4 is an indicator, but is used as a tool. The TMA is defined by 3 parameters -- an ATR multiplier, half-length and ATR period. These define the width and curvature of the TMA bands. The MM-TMA-Calibrator tool makes it easy to experiment with different parameters and get immediate visual feedback on how the TMA bands look.

The IRUTM indicator uses the M1 TMA for signal generation and I wish to display the M1 TMA on M5, M15, M30 and H1 charts. But displaying an M1 indicator on a higher time frame chart is problematical because the M1 indicator requires a lot more memory. For example, on an H1 chart with 1000 bars, an M1 indicator will require 60000 bars -- which will cause MT4 to crash. So, when displaying an M1 indicator on a higher time frame chart then I can only show a small portion of it.

A solution would be to find corresponding M5, M15, M30 and H1 TMA settings that result in TMA bands that look almost exactly like the M1 TMA. This is what the MM-TMA-Calibrator tool allowed me to do.

Here are the settings I'm currently using:

M1: ATR Multipler = 10.0, HalfLength = 480, ATR Period = 1440
M5: ATR Multipler = 4.2, HalfLength = 96, ATR Period = 480
M15: ATR Multipler = 2.0, HalfLength = 32, ATR Period = 480
M30: ATR Multipler = 1.3, HalfLength = 16, ATR Period = 480
H1: ATR Multipler = 1.00, HalfLength = 8, ATR Period = 1440



The screen shot above shows two charts. In the upper chart I've attached the MM-TMA-Calibrator and MM-M1-TMA indicators. The calibrator tool displays the yellow TMA bands and three sets of buttons in the lower right corner. The buttons are used to change the ATR multiplier, halflength and ATR period parameters of the yellow TMA band. The white and red bands come from the MM-M1-TMA indicator. This is an M5 chart and I want to find the corresponding settings where the yellow M5 bands match with the inner M1 TMA bands.

In the lower chart you can see that using the settings 4.2 / 96 / 480 the yellow M5 bands now match almost exactly with the inner M1 TMA bands.

R4M Momentum Filter (R4M-MomentumFilter.ex4)

The R4M-MomentumFilter.ex4 indicator is a "standalone" version of the filter algorithm used by the RFM-SpikeHunterIndi indicator. Of course, you can attach it to any chart and it may complement other indicators you are using. I emphasize the word "filter" because that is how it is used within Spike Hunter -- to distinguish between true signals and false positives.



The R4M-MomentumFilter.ex4 actually combines two types of momentum indicators -- @Nih98's FX RSI momentum indicator and a Stochastics momentum indicator shared by @Hanover a few years back.

The indicator is easy to use -- a purple dot means bearish momentum and a blue dot means bullish momentum.

When trading reversals the trading window is small -- i.e. you don't have the luxury of using several bars to get the direction right. The momentum indicator needs to give you its answer now. So, just as in real life everything is a trade off so, too, with trading. In this case I've designed the indicator to give a quick response, but the cost will be in accuracy. I think it performs well and exhibits a nice compromise between quick response and accuracy. But please keep your expectations in check -- it is not going to be 100% correct.

R4M SpikeHunter Indicator (R4M-SpikeHunterIndi.ex4)

R4M-SpikeHunterIndi.ex4 is a new reversal "trading" indicator and replaces R4M-IRUTM-TradingIndi.ex4. R4M-IRUTM-TradingIndi.ex4 is still bundled in the *.zip file, but I will no longer be working on it. Going forward the emphasis will be on R4M-SpikeHunterIndi.ex4 and, if that goes well, then on to an EA.



I consider SpikeHunter a reversal "trading" indicator -- i.e. it generates candidate signals, filters them, and displays marks on a price chart where it recommends opening BUY and SELL trades. I think the indicator is easy to use, but I'll run through some of its features.

Signal Generation:
When reversal trading we trade away from a target. In this case the target is an extreme price above or below an envelope band. A candidate signal occurs when a spike pokes its head above or below a target band. I'm using the term envelope very loosely -- in fact, Spike Hunter implements 4 different types of envelopes you can experiment with -- M1 TMA, Keltner-ATR, @SwingMan's Lazy TMA bands, and ATR Envelope.

Filter:
As with any signal-generating indicator there will be a mix of true signals and false positives, so we need an algorithm to distinguish between the two possibilities -- this is the role of a filter. Momentum indicators can play an important role here and I've combined two -- @Nih98's FX RSI indicator and a Stochastics momentum indicator. The momentum indicators are used to identify a bullish or bearish move.

If a candidate signal survives both momentum filters -- i.e. a spike above a band displays a bearish move or a spike below a band displays a bullish move, then we consider it a true signal. A purple dot is a signal to SELL and a blue dot is a signal to BUY.

When trading reversals the trading window is small -- i.e. you don't have the luxury of using several bars to get the direction right. The momentum indicator needs to give you its answer now. So, just as in real life everything is a trade off so, too, with trading. In this case I've designed the indicator to give a quick response, but the cost will be in accuracy. I think it performs well and exhibits a nice compromise between quick response and accuracy.

Sweet Spots:
@Nih98 was very generous in allowing me to incorporate his "Sweet Spot" indicator and code into Spike Hunter. The Sweet Spot indicator calculates "round numbers" which often become targets. A picture is worth a thousand words -- I'll let you be the judge. For now I'm using the Sweet Spot indicator as a visual cue -- it is not being used for computational purposes.



Nonlag MA Midline:
Another visual cue that is fairly accurate. It does not repaint, but lags by one or two bars.


Additional Notes:

1. If you experiment with the different envelopes you will probably discover that @Swingman's Lazy TMA bands work the best. However, it repaints and I feel that in its present form can't be reliably used for trading. With the help of @Husky77 and others perhaps we can still figure a way to take advantage of it.

2. There are going to be false positives. These usually take the form of a "spike" that does not retrace but, rather, continues in the same direction. There are 3 ways to deal with this situation:
(a) chalk it up as a loss
(b) figure out yet another way to filter and remove it as a candidate
(c) figure out a way to identify non-reversing spikes and, in those particular cases, trade in the same direction. I like this possibility the best.

3. As you experiment I would appreciate receiving screen shots where the indicator does the wrong thing. This would be really helpful. If people can reproduce it doing the wrong thing then we might be able to find a way to remedy it -- and I would include the remedy in the next version of the indicator.

4. This version does not yet implement it, but I was thinking of a way to quantify the indicator's performance -- i.e. come up with a metric that could be used to compare performance of different envelope types, pairs, time frames, etc. The metric would be simple -- something like this: Let's say a BUY signal has been identified with a blue dot. The indicator would then place small horizontal lines 5 pips above and 5 pips below. If the 5-pip line above gets touched first then it's a win, or if the 5-pip line below gets touched first then its a loss. And then we compute the ratio of wins to losses and have our metric. It's crude, but when comparing the performance of different algorithms then it's useful to have some kind of metric other than "this one looks better".