SDTR Strategy Part II

TIP: When looking at price bars on a single timeframe, price has a tendency to run a Fibonacci number of bars between swing bars. Mostly, 3, 5, or 8 bars, 5 most common. So if you have 6 bars in an up leg, highly probable that it will go 2 more bars and swing down. If you have more than 8 bars, it is extremely over due to swing on that timeframe.

I will test your strategy and i have a request please
Can anyone add alert to ZigZag Arrow indicator when new arrow added?
Thank you @mrdfx for you strategy

Thanks DrDave for explaining.
Is there an IMT indicator?

Turns out that every indicator that has some kind of crossing can be used. Also, indicators that mark swings, like the ZigZag, can be used. Below is combining the SDTR with IMT using the ZigZag so that you can have high probability of winning trades with little or no drawdown and avoid a lot of the SDTR entries that tend to be losers when a strong trend is running. IMT is a type of trend continuation strategy. (Advanced users can even trade the retracements!)

This will NOT get you in at the start of a trend reversal on the H4. Instead, it gives you HIGH PROBABILITY of making a WINNING trade on the start of a trend reversal on m15. If it develops into a real trend reversal on H4, then you will also typically make an entry on the H1 very close to its reversal point.

ZigZag Example: H4 just painted an up arrow. (Doesn't matter if the SDTR gives a buy entry or not at this moment). Immediately look at m15. It is highly likely that it is on an up leg, and the up leg should begin from an up arrow. Likewise for H1, except H1 will probably only have 1 or 2 bars in the up leg.

With SDTR alone, you now are waiting for H4 to get the other indicators in order to make a buy signal. With IMT, you wait for m15 to do the normal cycling and continue up until it paints a DOWN arrow. This "downtrend" on m15 will show on H4 either as a small red bar (if the down move is weak), or an obvious down bar. On H1, it will show about 5 bars that either tend to go sideways, or that make an obvious pullback in the up move of the H1. (During this pullback, did H1 also paint a down arrow? If yes, then stop watching m15 and apply what follows to the H1). You will know that the m15 down trend is finished when an up arrow is painted.

(Assume the case here that H1 did not paint a down arrow during the m15 down trend). Now that m15 painted an up arrow, simply wait for it to give an SDTR buy signal and enter. (Here, you thought we were watching H4 to go from making an up arrow to continuing on to give a buy signal, right? That is not not why we looked at H4. The new arrow on H4 SHOWED THE DIRECTION that we want to trade on the m15!).

Exit: The simplest exit is to just wait for m15 to paint a down arrow and immediately exit.

So now you can see how the market itself, by using the ZigZag arrows, SHOWS us the correct TIME to take action; Intrinsic Market Timing.

Add-on entries: After your buy on m15, it is highly likely that you will soon get an SDTR buy signal on H1, and probably later see the SDTR buy signal on H4. If H1 buy signal appears, add on a contract. Simplest exit is still when m15 paints the down arrow.
If H4 shows an SDTR buy AND m15 has gone less than 9 bars from its last up arrow, add another contract. Simplest exit is still when m15 paints a down arrow. (However, if the up move gave buy signals on all three of our charts, there are more advanced exit strategies that can be used to stay in longer.)

In many cases, after the m15 exit, you will see a rather weak downtrend on m15 that hardly makes a dent in the H4, then m15 goes back up again, and think, "Whaaa??? Look at this crap system! I exited based on m15 painting a down arrow, but H4 kept going up! Look at all the pips I missed as H4 continues!" As I said above, m15 was the simplest exit. There are more advanced things to look at to be able to keep some contracts open to catch H4 if it continues up.

The full IMT system would be using m15, m30, H1, H2, H4, H8, etc. But the chart time frames of MetaTrader do not enable the full chart range. I mostly use NinjaTrader so I can plot nearly any timeframe that I want to see.

You can also check if there is a difference if you do not include the S/R signal rules:

 

1. A green ZigZag Arrow will appear and be within the pivot level zone (0-25 pips) levels, S61, S78, S100 only!
2. A red ZigZag Arrow will appear and be within the pivot level zone (0-25 pips) levels, R61, R78, R100 only!

Try IMT along with the complete SDTR rules. Then later, go back to your charts and look at each case where the H4 painted a new arrow.\Now followthe IMT/SDTR system with the S/R rules and see if you would have entered a trade that was not taken when S/R rules followed. When S/R are omitted, does this result in more winning trades, fewer winning trades, or the same number? Does the number of pips gained increase, decrease, or stay the same? Does the drawdown during the time the trade is open increase, decrease, or stay the same? Answer these question for a minimum of 30 arrows painted on H4, and then use the data to decide if the S/R rules help you, hurt you, or make no difference. Do NOT base your decision ONLY on the total pips or on the number of winning and losing trades; base your decision on ALL of the factors for YOUR specific goals. Maybe YOU have drawdown as your major concern, whereas someone else does not even include drawdown in the decision.

Hey FxBigshot, you cannot receive PMs yet, so see the attached PDF.

Thank you for that. I've got a lot to do and learn.

The latest version of this EA brother is that, how can I not find the stop profit stop loss setting in the ea parameter setting. Simple Daily Trend Reversal Pivots

I was doing some testing of the ZigZag Arrow indicator. I see that it repaints. That is, an arrow can be painted, then several bars later it disappears and is painted on a later bar. I will need to find time to either sit in front of the screen for several hours or else get out my screen recorder. I'll have to see if the disappearing act will have a negative impact on my planned trade strategy.

Because of the repainting, it is not possible to scroll back on charts and evaluate what the arrows.

Also, this means post #884 and #886 are not accurate, but they do explain the gist of the system.

DrDave if you use indicator semaphortrue2 set at eindepth1=0, eindepth2=0, eindepth3=40 it will show past arrow signals. Handy for backtesting

hi I'm wondering if anyone still uses this strategy? just found this gem and think its quite amazing especially when paired with technical analysis, been seeing this thread be kind of dead

I do have a question, looking at the chart we can see that on Friday i saw a valid entry off the r78, got an arrow and turbo was red, and friday at cole it crossed the MA, entered today after the open. Would the trade still be valid considering that this week open the pivots were changed? or would it still be valid from last week?

Potential short forming on USD/CAD at R61 we got arrow overbought, waiting for the cross

AMAZING STRATEGY

How did you set your take profit?

@mrdfx

I dowloaded the SDTR Strategy zip file but I dont know how to add the indicators on my charts. can you send directions or a video?

RR 1:1

Hey everyone its been a long time.

As successful as this strategy is and was proven to be traded manually, I'll be closing this thread.

I have so many things going on and with my own personal trading, I don't spend much time anymore on FF, and can't dedicate enough time to manage this thread.

You guys are more than welcome to continue to participate trading this strategy however it will remain in the recycle bin.

Cheers guys and green pips to you all.

EDIT: So Twee emailed me asking if I can keep the thread open as it adds value to the forum, so I will not be closing, but I won't be monitoring and managing the thread as before so if you do ask any questions please first check if its been answered already before expecting a reply. Thanks.

Pls don't do that now. You don't have to manage it either. I found a way to be profitable with it on a long time basis, lately and I think I still need to learn some things on the thread

Is there any reason to put it in recycle bin?Why just don;t you leave it here for future generations?