Yoni Yum

Hi all... long time lurker first time poster; I thought it would be good to give a little something back to the community which has helped me so far along on my forex adventure!

So as if there aren't already enough indicators and trading systems out there, here's another. AFAIK I am not ripping anyone off here LOL. The trading system is still fairly loose as I am testing different approaches, however I think the indicator is pretty cool and I wanted to share it.

Stochastic lovers will probably like this one. I was hooked on stochs for a while, but then started on a quest for something with a little less noise. I wanted smooth clean lines with sharp peaks and valleys, and little to no lag. Yes, I know, I want it all. The result is basically a hybrid of Schaff's Trend Cycle and Ehlers' Fisher Transform. In other words, MACD -> Stochastic -> Fisher Transformation.

While there are a number of ways you could use this indicator, I am currently using (i.e. back/forward testing) it in multiple timeframes, along the same lines as Spudfyre's MTF Stochastic system as described in his trade journal. I won't go into all the intricacies here. Basically you start on a lower timeframe---usually I enter a trade when the 15M and 30M charts agree---and move up to higher timeframes when they agree with the lower timeframes; if the lower timeframes give an exit signal before the higher timeframes start moving in the same direction, then get out of the trade. Entering a trade with support from the higher timeframes is preferable but not absolutely mandatory. Can take profit/pyramid trades on lower timeframe crosses. That's the trading system in a nutshell, still getting refined and solidified.

Another approach, a little more conservative, is to only take signals on the lower timeframes when they have support from the higher timeframes. Then it is a more strict trend-following system, more like TEB63's MTF Stochastic method.

The default Yoni Yum settings are 9, 12 (fast and slow EMAs), 6 (stochastic period), 2 (smoothing EMA). With these settings it gives more or less identical signals as a stoch(12,3,3), but with significantly less noise. This actually makes a good side-by-side comparison (attaching a screenshot of this). With larger values you can capture some longer range price movements, but introduce a little lag. All in all I think Yoni Yum can be used any time you would normally use a stochastic oscillator, and I find that overall it gives cleaner, more accurate signals. If nothing else it's nicer to look at :

If you decide to give this indicator a try, I'd love to hear what you find to be the best settings as I'm still experimenting quite a bit with it. I also welcome any comments or suggestions for improvement (I am an MQ4 noob). Enjoy!

Sylvan

P.S. Those are heiken ashi bars laid over OHLC bars in the screenshot, just so you don't get confused


PPS. I have updated the MQ4 file. The smoothing EMA is now hardcoded to use 2 periods, since I never seem to change this value; longer smoothing periods start introducing unnecessary lag. Also this is more in keeping with the Ehlers Fisher Transform which just uses a 2-period smoothing. Also added Creative Commons license agreement (Attribution-ShareAlike), cleaned up the code a bit and added a few more comments. Hope you can put it to good use.

It's a great first post and contribution.

I will have a play with the indi.

Thank you!

Cheers
Antra

Welcome to Forex Factory

Good work on your first post. A lot of obvious work went into it. Checking out your indicator and system out now.

Good Luck

Thanks for your hard work, very yummy

Would you happend to have an alert for this guy?

thanks in advance

No, I have never coded MT4 alerts, and don't have a use for it at this time. If someone else wants to code this, go for it.

Thanks all for your kind comments.

Note I have posted an updated MQ4 file with a couple of minor changes and a copyright/creative commons license.

Sylvan

Here is an example of why I like to keep the Heiken Ashi on screen. In a long down- or up-trend, you will get some false signals from Yoni Yum as it gets very sensitive when inside a trend longer than its slow EMA period (12 in this case). So I use Heiken Ashi bars as a filter; the HA has to agree with the YY in order to create a valid signal. In the attached USD/CAD daily screenshot you can see this clearly. Based on the HA bars, I would have totally ignored the "buy" signal lasting from 4/22 to 5/1.

Of course referring to higher timeframes often serves the same purpose, but I find this offers an immediate visual cue.

Mind you, with some different settings (longer EMAs), the graph looks more like this. Like I said, still working out what the optimal settings are...

Thanks a lot. I like this indicator so much. But need to improve a little bit. Alert, signals and some good settings would be great!

Programming an alert isn't my first priority because I only use YY in MTF. So next I'd like to take a stab at an MTF indicator. But if you want alerts, by all means add them in.

I did a bunch of testing last night and keep gravitating back to the 9,12,6 setting in MTF. With larger values you start introducing lag, which I abhor ! Referring to a higher TF always filters out bad signals, as in the USD/CAD example above; just flipping to the weekly chart shows you what you need to see (or again, the HA bars usually do the trick as well).

In this screenshot you can also see my raw Fisher Transform indicator, which was my stepping stone from the stoch. But YY is both smoother and more responsive as you can see.