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Joined Nov 2007
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Status: Live long and prosper
|359 Posts
Dear PTournis,
May I ask a couple of questions? As echoed already, how are you determining on a look-forward basis the parameter settings for the slope indicator? And, secondly, how are you using the ATR that I noticed on your chart?
I am not looking forward. I am looking to the past to see what setting mirrors the movement of the instrument. I use the ATR as a guide for setting SL. More times than not I set it at 100. I posted an entry by Alan Hull himself expalining how he uses his MA on the other thread. Here it is again.
Posts: 1
Registered: 7-9-2004
Location: Melbourne, Australia
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posted on 7-9-2004 at 03:30 AM http://www.stockmeetingplace.com/for...ilver/edit.gifhttp://www.stockmeetingplace.com/for...lver/quote.gif HMA Construction...
The HMA is not that closely related to linear regression - the square root of the sum of the squares, etc. It is designed along geometric lines to remove lag without having to shorten the period and compromise smoothing. Hence, when compared to a line of linear regression of the same period, the HMA has superior smoothing.
HMA Application...
Because the HMA was designed to remove lag, don't use it to generate crossover trading signals. Instead you trade the turning points of the HMA...as it turns up - buy and as it turns down - sell. I actually prefer to use 2 separate HMAs with different periods - one for entry and one for exit. Tune the periods by backtesting on each financial instrument you wish to trade, ie. curve fit it in each case. Apply it to daily or weekly charts...it really doesn't matter which timeframe you use it over.
The WEEKLY CHART 61.8 did not hold (at this point). Good trade setup for a sell on the USD/JPY. Although this is a bit of a risk trade, you could set your SL just above the WEEKLY 61.8 Fibo line.
