Trading Focal Points -- "A Leap Of Faith"...

Look at the Top of Centered Moving Average 16

Look where is Price Action

Look the CMA 16 (Half Period) (red) and 36 ((Full Period) blue) when they intersects
Count the bars

Count the Bars for the new Focal Point 1632

Check the confirmation of Focal Point 163264 when CMA 64 (lila) confirms this Focal Point

EURUSD 1 mn

@parisboy, i think cadjpy will sell from the chart, pls am i correct

Your chart includes High 2 -- but there is no way you could know that. The High / Low must be bounded on their left and right by FPs. There is no FP to the right of High 2.

Focal Point = 95.400
Low = 94.380

Target = 95.400 + 620 = 96.020 +/- 0.124

I would wait confirmation of the downtrend before selling

This post includes an updated version of the R4M-FocalPoints-OnCharts indicator. Using the default settings it does a good job of detecting Focal Points -- though I won't claim it is perfect. As I've touched on above, not all Focal Points are created equal -- at least not visually. The SMA intersections rarely occur at exactly one point -- there is always a bit of a horizontal or vertical offset. Your brain can easily spot the colorful pattern and ignore its imperfections, but that's not so easily done in code without very specific, predefined rules -- that currently don't exist. So, I came up with my own and it seems to work. I am happy to continue refining the detection algorithm. However, if you come across a discrepancy where the detection is wrong or misses an obvious FP then it's okay to complain -- as long as you include a chart that points to the discrepancy and provides enough information that would allow me to reproduce it. If I can't reproduce a problem then I can't fix. Also, I'm not a mind-reader.

Let me explain a few of the indicator's features. In the image below the bullish and bearish FPs that the indicator detected are marked by blue and purple circles, respectively. I think of Focal Points in terms of pairs (i.e. couples) of a bullish one coupled with a bearish one. I'll call these FP1 and FP2. In between FP1 and FP2 there will be either a High or a Low. When FP1 is bullish and FP2 is bearish there will be a High, and when FP1 is bearish and FP2 is bullish then there will be a low. Once FP2 is formed the indi has enough information to compute the TargetPrice (yellow line). If current price has not yet reached the guesstimate TargetPrice then the yellow line is solid and may still be valid. However, once the current price has exceeded the guesstimate TargetPrice then it should no longer be considered and it is drawn as a dashed line.


The updated version of the indicator includes two settings: 'Crossing Type' and 'Tolerance'. These come about because, as mentioned above, not all Focal Points are created equal and are described below:

Crossing Type: There are 11 crossing types -- 16x32, 16x64, 16x128, 16x32x64, 16x32x128, 16x64x128, 16x32x64x128, 32x64, 32x128, 32x64x128, 64x128. The default is 64x128, since I think that works best. But feel free to experiment with the others.

Tolerance: This is the "breathing room" required by the detection algorithm. Intersecting SMAs occur in close proximity to one another, but not at an exact point. This setting is the number of bars that intersecting SMAs are considered to belong to the same FP. The smaller the number the more strict. In the case of 64x128 the Tolerance can be set to '1' since there is only one crossing. In the case of 16x32x64x128 if you use a setting of '1' then you will probably not see any FPs.


Below is an example of a bearish FP where the guesstimated Target Price may still be trade-able because it hasn't yet been exceeded by the current price.


And some tips:

1. Pay attention to the Fractal Channels you see in the background.
2. Pay attention to SMA(128).
3. Trade in the direction of SMA(128).

Don't force it -- if a candidate setup isn't obvious and you feel like you have to ask @parisboy whether or not to enter a trade, then that is your clue not to trade it. When you get your head around this algorithm you won't need to ask questions. If you feel a need to ask questions then that probably means you don't yet have your head around it. I would consider this a highly discretionary strategy. The indicator I've provided is just a tool -- it can not guide your hand to the BUY / SELL button. A tool is only as good as the craftsman who holds it.



PS: My bark is much louder than my bite. Please feel free to ask questions or post comments -- especially charts that include successful or failed trades. Failed trades are particularly interesting because when I study them I might be able to fiddle with the indi to improve its detection.

PSS: With regards to fiddling with the settings -- I won't be participating in that exercise. 64x128 works best, but I understand others feel compelled to prove that to themselves.

EURUSD 1 mn

Opened a Long position

EURCHF / H1 -- looks like a SELL to me. Let's see how it plays out...

Closed Long position at Stop Loss while reading the post of Robots4me !

@parisboy -- don't READ and TRADE at the same time!!!

Target 1,01700 +/- 230

Another tip -- maybe it's best to attach the indi twice to a chart -- one using 64x128 and the other 16x128, each using a 'Tolerance' of 1.

Okay, cool -- then I'm okay. My TP is closer to 1.0209 but that's probably because the indi is using the earlier High. But all is good -- you've simply demonstrated that when the rubber hits the road @parisboy's brain is still smarter than my indi...

we will follow this thing to check

PS To follow 28 pairs your indi is necessary to sort things out

Do you mean following 28 pairs at the same time on a single chart or dashboard? Probably won't happen -- there is still too much discretion going on and the rules are not well defined. The best I can suggest is to use a symbol changer to quickly traverse all the pairs. Are there symbol changers available in TradingView?

A minor tweak to the indicator to support attaching it multiple times (with different settings) to the same chart:

Target could be reached between March 26 th 21H and March 27 th 03 H

Right now is probably not the best time to open a trade -- immediately after the Asian open. I'm looking forward to giving this spin as the London Open approaches.