HAC & RAC - A Simple-Minded Approach

After awhile it setup again for another short. This one took place in the middle of the day.

And finally...the last setup on EURUSD thus far, a big long.

If anyone has some ideas as to how this might be made most efficient, I'd love to hear them. For instance, if the pairs could be sorted by their proximity of their HAC lines to the Synergy close, etc... or maybe there's something else better. Anyway, if you think this notion of mine has merit, give it some thought and maybe we can create a sort of "trade finder" or something. Get the best ideas together and I'll ask FerruFX what he'll charge to program it.

Hi Almuten, nice to hear from you again!

Would you explain more about what synergy is? Is it an indicator? Or is it a trading system someone has made up? Thanks.

Hey Timo,

What it is, is a version of the Heiken-Ashi candle. The main difference, as far as I can tell, is that when calculating the closing price for the candle, the actual market close is given an additional weight. For instance, the calculation is as follows:

(((Open+High+Low+Close)/4)+Close))/2

The formula was devised by Dean Malone. He also came up with the TDI indicator.

Thanks Almuten, I have done some quick back testing with your latest idea, and it looks like it sure has merit! Some kind of table or dashboard indicator to monitor all pairs for that particular setup would be really good, for sure.

Something helpful to play with...

I've worked to improve my timing as far as trades go and the more I work with this, the more I like it. I first learned of it over on Forexalien's thread. It's called the 'Drake Delayed Stochastic.'

Originally the idea for this indicator came from the need to filter out false alarms for the spread of infectious diseases (believe it or not). It's used in the evaluation of trends in statistics, but it works very nicely for a cyclical indicator as well, as significant tops and bottoms will be made along with the Drake.

What I have attached here is both a non-repainting and repainting version of it. I like the non-repainting one. Generally these are the same, but I like the idea of when an indicator 'prints,' what it prints stays printed the way it originally was. That's just me though.

I've just noticed that there are many times, especially during a complex correction, a prolonged topping/bottoming situation or even an ABC pattern, a lot of false signals can be given. This filters out at least half of them. In most cases, for instance, the market won't turn until the Drake reaches at least couple of periods into the Overbought/Oversold zones. Once it crosses and heads the other way, you can be confident that price won't turn again until it reaches the other side of the indicator window. It's not foolproof of course, but it comes reasonably close, provided the rest of the criteria for a good setup are present.

Settings:



I know I'm starting to proliferate indicators, which I really wanted to avoid altogether, but as I've worked with this system for two years, I've discovered that even though there are only a couple of indicators, they produce a lot of information to process. Actual trade entry takes a different kind of focus and concentration. Having an indicator that's telling me "Hey!....Get ready now!..." is rather helpful. It helps me to be less reactive and to take my time and watch it set up.

This isn't what I want to watch for finding trade setups. It's one of the last things to be used prior to pulling the trigger. As you've probably noticed, there are times when the RAC indy crosses 80 or 20 and the HAC is penetrated, etc... and everything looks perfect, but alas! The market was not quite ready. Situations like that are greatly helped by the Drake, especially if carefully observing multiple TF's for 'cleanness' is difficult.

One of the more powerful setups using this indicator is when the lines cross each other and the other H&R criteria occur within a few periods.

Example 1: When it's "perfect"



Example 2: When it's "not-so-perfect"

In this example, the Drake and RAC were a bit out of sync. The Drake was ready to head North and the RAC was preparing to go South. The H&R signal itself was fine, but the market wasn't ready. It went sideways at the point of entry until it was.

Hi, Almuten!
You always blow up some fucking bomb when you show up in your thread. That' s cool!

A great indicator! Especially the version of DDS_GPRT.
If possible, put the version in mq4 or output the buffers 0,1,2.
It would be great to add more different notifications and alerts, when crossing levels and / or crossing lines.

(Google translate)

Hi fastinv,

I don't know the coding for the non-repainting version. The guy who originally coded is 'Permalex.' You might try to PM him and see if he will give the code. He's done a couple of other Drake indys with different configurations and some of them have the code available.

Thanks Rammstein!

I managed to hack someone else's code and calculate the Synergy close for D1, W1 & MN and plot them. Anyway, they work perfectly as far as I can tell.

Blue = D1
Red = W1
Green = MN

Hey Almuten, any progress, or success with your trading? Any updates?

I my self have been trying out your methods, but mainly on back test and mainly on daily timeframe. I would love to have a daily method that wold succeed so I can have time to "live" and have a trading income also.

Hi Timo,

Over the last few months I've been readjusting my life to accomodate trading. I live in the United States and the best hours are of course during the London session. Problem was, my life was mostly conducted during the daytime. Fortunately I began a job that has the hours that begin at 3pm and end at 1:30am. Trading gets more active around 2-2:30 am. I really wanted to get accustomed to a more nocturnal schedule before I begin this.

All that aside, I'm going to try something that might help you simplify your own trading. I don't know if it will be optimal, but it looks promising. I'm trying to stick to longer time frames now because I am working full time and really love what I'm doing (meaning I don't feel like I have to 'escape' from working). Also, my account size doesn't justify spending all day squeezing pips out of smaller moves that last an hour or two. It just doesn't fit me anymore and I didn't feel any joy from doing it. Moreover, I found that it tired me rather quickly and I lost the alertness I needed to take the appropriate actions consistently.

For me, I think H4 is the right time frame to focus on. It doesn't take very long to check 12-18 markets either. This is only a screening method though, nothing more. Once a trade opportunity is seen, it can be managed according to all the other rules previously discussed. Below is a screenshot of what I'm using. Notice there's no RAC on there. I wanted this to be as simple as possible and with little ambiguity.

I employed the help of another student of Forexalien's. His name is Nihilist. Like me, he took Alien's ideas and integrated them into indicators that worked well for him. One of his indy's called (playfully) "Holy Grail" happens to coincide nicely with clean RAC crossings so I decided for simplicity's sake to use it as a screening criteria.

The other screening criteria, and the first one I look at, is the one that Rammenstein made for me. It's an oscillator based on the distance between the close and the HAC line. The ATR both above and below are on there too. Once the indy pops above the ATR I look then to the Holy Grail to see if it has turned either blue or green. If so, the market is in a good long position. When the indy turns negative and is below the ATR line, I look to the Holy Grail to see if it is either orange or red. If so, the market is in a good short position.



I have to dash off to work now, but maybe once I get going I can start posting the setups when they occur.

New Adjustments in Life and Other Cool Stuff

Well life has changed once again. Just as I was getting used to being up at night, etc... I lost my job...AGAIN! Now I've just $65 in my trading account. Other 'fun' things have been happening too!

Get this. I ran into a deer a month ago. My hood was crushed so I couldn't open it. Three weeks ago I lost my job. Two weeks ago my car battery died in the middle of a busy intersection and because I can't get the hood open, well...no car now.

Anyway, I'm walking a LOT these days - about 6-10 miles a day. The wonderful thing is, I am finally at a place where all of this is 100% ok with me. I think I just completed my life's work: complete acceptance of whatever occurs. There seems to be a kind of divine grace operating through all this. It's been quite extraordinary.

Anyway... because I have so little money to work with right now, my main focus has been on continuing to develop methods, understand my tools better, etc... I do have some exciting developments (at least I think so). I have a way of using the RAC indy that's rather unique and I think it might be a way of finding very good monthly-level trades; meaning trades that run for days or weeks.

RAC as a predictive tool for price:

The logic behind this is that the smaller time frames will lead the larger; that patterns made in them will repeat in the larger structure. To obtain some idea of this I've been using the RAC indy to establish a key oscillator level for one month at a time.

But first, seeing what this indy is really like will lend some credibility to it. For example, take the 50% level. Mark on the chart every time the RAC crossed 50%. Watch how many times price will cross those levels when the RAC crosses 50% is rather astonishing. It's like it keeps track of the 'balance' of the market somehow. This kind of thing will occur over even months at times.

Now the next thing I want to show you is that the indicator can potentially be used to map out a month's worth of price movement using the first five minutes of the month. The RAC on the lower time frame will translate into significance on the larger time frame.

First I'll put on what's done on M5. The RAC level is marked in the oscillator window and the opening price is also marked.

Now I change the chart to an H1. Just notice what happens with the RAC on that time frame crosses the level marked out by M5.



Also look at H4. Same kind of thing, only it happens later.

Now this part is really cool. It will confirm whether or not the trade is perfect; at least as perfect as could be expected.

Now that we have the levels set up, I'm going to use H1 to find the setups. This time frame will make enough swings on a monthly basis that really great setups can be located.

1. The trend line begins on the monthly open.
2. point #2 is drawn on the close whenever the RAC crosses the key level.

In the pic below, the RAC made 2 crosses on H1, but one of them is more important because, as marked by the pink arrow, it crossed again and intersected the trendline. This is what makes that line all-important.

Hit #4

In this example, the TL was hit yet again, just as the RAC was crossing the key level. This is an extremely UNLIKELY event.



Now we can measure how far it ought to go. On a fresh run, the typical target is 3x. This one went much, much further on H1.