Higher Edge within a Single Candlestick

EDIT: The subjectivity of how currency strengths develop in symphony to exclude signs of price manipulation across all country pairs cannot be easily coded or reflected in a currency strength mathematical equation that is normally used in basket trading or strength indicators. I need to see the leader take the lead 'during' currency strength building process in order to trade discretionary. Not possible to automate it as it cannot be rule-based or quantified. And, needless to say it, I could do this only in FXCM's TS2 platform which is no longer available to US traders now hence my journey to take on a different statistical approach via my automation... still a work in progress[/quote]

Hey Veefx,
Just thought you might like to know that you can still use TS2. Just download the TS platform from the FXCM UK website down at the bottom of the website page.
https://www.fxcm.com/uk/forex-trading-demo/
Then you can open up a practice account by clicking the button at the top of the page and fill in the blanks. The link I provided goes straight to the demo page. Where it says mobile phone just put some random numbers. It doesn't matter how many and it should work. The demo account won't last forever so you will need to place some trades on it every now and then so it will stay open. But if it did happened to expire you can simply open another one. Let me know if I can help in any way.

Jason

"What is your number [You]?
How much would you like to earn and how many hours are you willing to work for that number?"

-I think everyone has two numbers.
The number we came to trading for (some version of a million).
And the number we would now be willing to accept to keep trying.

No one came to trading to make 50k. Maybe came here for easy money..... just lots more of it.

Everyone came to trading to make their own version of a million. (Live on a beach, trade from home, not go to work, ....)

Some, I believe, are here due to poison environment. That would be something like, no jobs, no future, no opportunity, a perception of 'no other choice'.

I don't think anyone came to trading just to make a standard living.

So you've got your original number (x)..... and your modified number (y).

Where x= a million,....... and y= a standard living.

Thanks for clarification sunnym. I just though that it was a dangerous dotted snake that can bite my child on our next journey plan, but it seems that you have another kind of rattle snake

In my example the exit is not decided by price crossing the blue line, but it's managed by the trader. If price stall for more than X seconds = you exit the trade. Every respectable scalper with some experience will know what I'm talking about, we are in to get about 5-10 pips on average, we don't need to follow a whole trend. Of course, this works because our entries are on high probability pullback areas and we get most of the time at least 5-10 pips runs.

From what we've seen till now, I'd say detecting a buy/sell hemisphere is not the issue; since it's relatively easy to set up an MA in conjuction with a higher TF trend (1 min - 5 min) to set a reference point.

The problem lies in having an indicator that can:

- Filter out low volatility and false breakouts.
- Pinpoint your entries with great accurancy.

Since CP indicator seems to work just fine for that, but we do not know anything about it, let's then take a look at CP indicator on charts...

What do we know:

Main blue line is the main indicator's signal.
Indicator is centered at 0 and higher limit for signal is set to +0.00049 while lower limit is -0.00049.
Trade is opened when price goes outside envelope and the indicator main line crosses +0.00049 or -0.00049. Trade is closed when price crosses opposite limit level.

Observations from the charts:

A) As we can see, indicator blue line (just "line" from now on) lies in the inner range +0.00049/-0.00049 while price deviates only few pips from envelopes.
B) Price tend to enter into a downtrend, making a new low outside envelopes. The line briefly goes outside the lower range -0.00049 indicating a certain #pips movement in negative direction has occurred.
C) During this period price stall outside the envelopes without moving much, and indicator line goes back to 0.
D) Price keep resume going down, and indicator line register the increased downward slope by signaling a negative value.
E) Price stop going downward and slowly resume into an upward move, indicator line pop into positive territory, giving a nice exit signal.

In the second chart:

G) Again price deviates from the mean and indicator line quickly surpass the +0.00049 limit.
H) After price has risen some pips, it stalls and goes down some pips. Indicator line collapse into negative territory.
I) As price explode upward, indicating a resume of the trend, the line goes up over +0.00049 limit again.
J) It seems like indicator line goes into negative territory when price stalls during an uptrend, like in this section.
K) Indicator line collapse into negative values as trend get exausted and loses momentum.

From what I can observe here, the indicator might represent the rate of change (in pips?) of the difference between price and an MA value.

At first I though that the indicator was showing some indication of the latest continuous movement in terms of pips, but I don't think this is the case.

Then I theorized it may represent an MA slope calculation or a pure difference in terms of pips between price and an MA (or something else), but the indicator shows to quicky go into extreme opposite values each time in a trend price quickly stall.

Then again I had the idea that maybe the line indicates some sort of rate of change over time, and looking at the chart the easiest bet would be the rate of change of a price/MA ratio (during the previous X seconds).

If my theory is right, we would observe:

- When price remains into a relatively narrow price range, the indicator line should be around the 0 line. It indicates no notable deviation from MA.

- When and if price breakouts (please consider actual numbers need to be tailored to filter false breakouts), we would expect the indicator line to deviate from the 0 line in a positive value (long) or negative value (short).

- For example in the case of long positions, price makes new highs and we observe the indicator line rise, until the movement (while still going up) start to decrease its rate of change; this is reflected by the line decreasing its value more towards the 0 line (you can see this at G in the second chart) and /or even below 0 (H). If the indicator is showing the change of the difference between price and an MA, a decrease of the indicator line near 0 means that the difference is staying about the same during the recent period. If the indicator line goes below 0, it means that the difference between price and MA is getting smaller.

- If price goes up fast again, the indicator line goes violently again into positive territory, showing a new strong upmove (I). If we have as reference point the different between price and an MA, we would expect this difference to become wider as momentum push price, and since we are in a upmove a strong positive value is correctly shown. This means the difference between price and MA got wider over time.

- When the movement upwards gets weaker and price start to rentrace, the indicator line goes into negative territory (I and J in example), because the momentum faded. This is clear at point J in the second chart, where price at the end of a long move rentrace a bit and the indicator line goes into negative territory. In this case, the difference between an hypotetical MA and price would become smaller than before (for example from +50 to +30); and consequently the difference between the price/MA ratio during the last few seconds is -10. This is shown correctly by the indicator that shows a negative value when price stall or rentrace a bit in an uptrend.

Do you think my theory might be correct? What kind of indicator is already available that can work as the one used by CP?

Well done, R3ta. (But the fat part is imo not exactly correct. You could use two MAs instead of prize and MA.)

The different reactiveness can be simply explained in another way, namely using different reference lines (i.e. MAs with a shorter lookback period).

So you're referrig to a simple MACD right? Anyway, if my theory is correct the indicator line represent the changes over time (or slope perhaps?) in the MACD line (completely different concept).

Yes, two different methods. But in the end you measure nearly the same thing - momentum. Well, MACD is partly right (but imho still not the complete story).

Looking at the indicator behaviour, it can also be some sort of modified awesome oscillator. Just to know, you have your hands on this indicator (or similar) or are we all trying to guess?

Hi R3ta,

Hate to see You going on circles.... The influx indicator IS a MACD!!! But it is with a twist - instead of being applied to 12 candles versus 26 like the conventional ones... it is applied on the second, it is constantly being updated (it is on a second basis!!!!) so that you can figure out where price was x (=amount of seconds, minutes, hours ago) time that you decide (your reference point) ago...

So for example, you have 3600 seconds (60 x 60 minutes) and you apply to it a moving average, you have the middle price of 1 hour candle being updated on the second, and because of that, starting from now until 3600 seconds ago (You have where price was 1800 seconds ago). Let's say this is your slow moving average...and you want to compare it with a faster moving average....

Now you have (the faster moving average) 60 seconds and you apply to it a moving average, you have the middle price of 1 minute candle being updated on the second, starting from now until 60 seconds ago (middle price = thats where price was 30 seconds ago)...

Then You want to measure the distance from the slow and the fast moving averages, what do you get? Kind of like a new candle with the close 30 seconds ago and open 1800 seconds ago = a 1770 candle constantly being updated. So from here, your reference point was the open at 1770 ago...

I'm sorry for my english and I'm trying to be the least cryptic here... hope it helps

Regards

I am noob when it comes to indicators like macd. Could we please have a template along with whatever indicators being referenced to play with and understand this stuff.

CP uses a simple indicator.. What many of you still don't get is his system.. "For every action, there must be an equal and opposite reaction." Anyone who can apply this principle on any chat will throw away all indicators because it is not necessary.

lol

I'm quite sure that it's a MACD but I think it can be done with any other unbound oscillator, too.

Please enlighten us

Beautiful trades you got there i must say. But you can better avoid the whole stress and be selective with your trades. When applying the newton's law of motion on a chart, there are few things you need to know:
-The previous high/low/open/close/midpoint.
-The recticular formation(according to CP). It is all about patterns.
I am not going to drop the whole system because it is impossible to do that. This is just a tip of the iceberg for those who are willing to think deep. People's orders is not the reason price moves. The chart is like a video game which is being played everyday with different constructs everyday. The more you begin to realize that S/R,S/D,trendlines etc. doesn't exist then you are halfway done.

I will advise you to read gann's work + CP's posts then you will be enlightened.

Not sure if you've read my post. Maybe it's in total contrast to what you think/understand. Then I'd like to hear your opinion.

We still dancing

I really do understand your post but you seem to be over-analyzing CP's indicator. A simple macd+stcochastics and even MA's will perform the same function with his indicators. There are some calculation he still does with his head that his indicator will never show you. CP's indicator is nothing complex like you are thinking. Even if he gives you the indicator which is not the ultimate, you still won't be able to trade with it.

Let me illustrate with your palms. Close your palms assuming you want to make a prayer. Open it up with both still together. What you see beneath the palms is the answer to your question.