The digital theory

Hello.

Time for another of my out of the box perspectives.

First thing: Stop thinking in terms of candlesticks. We are going to convert the analog signal (candlestick charts) into a digital display.

The idea is to picture the chart as a grid of squares. If the price passes certain thresholds over time intervals, it will get filled in blue.

The way I look at it, GBPJPY's volatilty is the same as GBPUSD, only the forex Gods chose to make the pip at the 1/100 yen instead of the 1/10 of a yen. What if the GBPUSD's pip value were 1/1,000 of a cent instead of 1/100? People would flock to GBPUSD because the volatility is high and pips would compare to Guppy.

What if I can look at GBPJPY as 50 pips = 1 pip? That's what a blue block on the graph is.... it is 1 pip in my mind. With this rational, GBPJPY moving 300 pips is the same as 6 pips to me.

So if I have a nice scalping program, I can trade 50 pip moves as if they were 1 pip without the broker getting angry.

Remember: It's all about volatility. The only reason I can consider this mentality is that GBPJPY moves a lot.

Its look interesting, can you explain how exactly we use this system

Okay, here's how it works....

Let's say you have a great scalping EA or method, but your broker won't let you use it.....

You can use the digital method to scalp.....

Instead of looking at GBPJPY as a 50 pip move up or down, you look at it as a single pip up or down.

An MT4 indicator needs to be written to create the grid of squares and fill in the ones that the price touches.


Is this a perfect method? Probably not, but it came to me out of the blue and I felt like sharing.

Let's say your scalping EA works very well, but the broker won't allow it.

Rewrite the code to divide GBP/JPY's candlestick heights by 50 (or 10 or whatever ratio you want to) to reduce the volatility in pips. Now this won't turn the GBPJPY into a digital graph as shown above, but it might work well (if not better than the idea posted above)

Now your EA will be processing GBP/JPY as if it were a much less volatile pair. This will resemble a lower timeframe.

This way, you won't be gobbled up by spreads.


I don't guarantee this way of trading will work. For me, I was thinking about taking the "LuckyEA" at ForexTSD and rewriting it to suite this way of trading.

look interesting...can u explain more

Sorry, fising, that's about all I can say. You have to figure the rest out on your own.

Reread the thread a few times, and then use your bean to apply other things you've learned. There are enough teeth in this method to do further research.

Regards.

Ok bro i read first...thanks bro

Nothing new.

Nothing new "to you" How well does it work? How do you convert to the digital grid? Tell us please....

There's already point and figure charting isnt there ?

Interesting. I didn't consider Point and Figure. However this is a much shorter term strategy... to use a digital matrix or reduced candlestick size to scalp trades....

That a swing trade lasting a day or two can be viewed as a scalp.