Weighted Escalator - a weighted stoch system

UPDATED with an actual Indicator

I've come up with a slightly modified interpretation of the 'Escalator to Pips' Strategy.

My Template and first indicator are slightly modified versions of the template / indicators Banzai posted in post 13 on the first page.

The new indicator is a small graph with a the current score.

I call it the 'Weighted Escalator'

In this template, there are a total of 8 bars. The first 4 are the M15, M30, H1 and H4 stoch's with a 5,3,3 setting. The second set of 4 are M15, M30, H1 and H4 stoch's with a 14,3,3 setting.

I read this chart by giving the H4 chart the most weight in my calculations (since it is the trend) than the H1 which is still weighted more than the M30, then the M15. You add and subtract the scores of each chart to get a total for that bar. You buy when the bar total goes above 3. You sell when it goes below -3.

The scoring is done like this:

M15 charts:
SpringGreen = +1
LimeGreen = 0
FireBrick = 0
IndianRed = -1

M30 Charts:
SpringGreen = +2
LimeGreem = 0
FireBrick = 0
IndianRed = -2

H1 Charts:
SpringGreen = +2
LimeGreen = +1
FireBrick = -1
IndianRed = -2

H4 Charts:
SpringGreen = +4
LimeGreen = +2
FireBrick = -2
IndianRed = -4


Total up the score for each bar. The score can be graphed much like a moving average, but I just use my fingers to see what the score is. I do sometimes plot the scores on some graph paper for analysis.

WHEN TO BUY:
Buy when the scoring goes from a negative number, past the zero, then hits the 3 or more. Example, the score goes -8, -5, -9, -1, 0, 1, 2, -1, 0, 2, 3 [BUY]

WHEN TO SHORT:
Buy when the scoring goes from a positive number, past the zero, then hits the -3 or less. Example, the score goes 13, 4, 12, 5, 6, 0, -2, -1, -2, 0, 1, 2, -5 [SHORT]

WHEN TO CLOSE
===============
Upon Buying or Selling, I open 4 positions (lot size of your choice) with a stop loss if you want. I close each at the following:

1st. Take profit at 10 pips
2nd. Trailing Stop of 15 pips
3rd. This is my 'other' lot. Close when you like, I close after the 1st and 2nd have closed and it hit's or crosses the 3 going the 'wrong' way (I recently decided that is is my favorite out)
4th. Close when the score hit's or passes 0
================

So far, I've done this charting by hand on several past months and it's proven profitable for me. Looking at the chart below, you read the symbols like so:
a positive number is the number that's not filled in, a negative number is the one that's filled in. Also, the greens are positive, the reds are negative.


I have now attached my modified template and indicator.

This looks interesting. It definitely needs an indicator to track the scores though, ideally with an alert. Whilst I appreciate it can be done manually, to do so with more than one pair would be a nightmare!

There is also a problem with backtesting I suspect. If the trend changes strongly during the last 15M (say from red to green) this could cause a repainting of the last 3 bars of the 1H bars, and potentially the last 15 of the 4H bars (since there are 4 x 15M bars in a 1H bar and 16 x 15M bars in a 4H bar)

I would still be interested in seeing an indicator with an alert for forward testing though

Andy

I've always liked banzai's stoch indi, but this is a very interesting way to use it.

Agreed. Repainting is a problem with stochs. However, the timescale allows for much 'give' in the system. You are also correct that it's rather tedious to do everything by hand

Frosty,

Nice to see that you are testing the Spudfyre MTF (in your own variation).

You seem to be having good results.

I demo traded Spudfyre MTF for a month or two some time ago and it was working great for a while, but then for some reason I got where I couldn't make profits anymore.

I still think it is a great concept; wait until there is a longer term trend established, then enter when the lower, and next lower timeframe indicators are headed in the the same direction.

Theoretically, you should almost always have the highest probability of a winning trade that way. But for some reason it fizzled out for me.

If you could get an indicator that makes it easier for you to calculate your entries and exits for your method here you might have a very profitable system.

Please keep us posted.

PD

Do you think that it would help the MTF stoch method if you could discern when price is ranging vs. trending? That seems to be the most difficult part for me.

That's kind of what I hope to have accomplished with the weighted system. When the score is in the negative, the trend is down. When the score is in the positive, the trend is up. All of the other hills and valleys are ranging patterns. It may still require some tinkering with the weights, but it seems to work well so far. If you draw a line on the chart from the time the score entered negative territory and kept that line going down until the score hit 0, you would see that it follows the trend. The same goes for positive scores.

The hills and valleys (the range) matter much less for the system as we are primarily concerned with the score (trend) being negative or positive.

EDIT- If you wanted to find the much longer trend (like the daily trend, weekly, monthly, so forth) you would add them into the mix and give them an appropriate weight.

I updated with a modified version of the indicator and a template for ease of use. This makes finding the score a LOT easier for me. I'm still not advanced enough to have it post the score or a chart. That will take more work

I've posted a better view of the chart and how to use it. I've also nailed down my 'other' lot. I've found that for me, closing the lot after the score hits or crosses 3 in the 'wrong' direction (ie, headed toward the 0) works out well. In the chart posted, there is a 97 pip gain. Look at the template and indicator, take your chart offline for a few minutes and randomly scroll to some point in the history (or look at live charts) and see if it doesn't work for you.

I've always liked Spud's work. Nice to see a different version.

Thanks

Interesting work. So in the attached pic, the most recent bar has a score of 13? I think I'm confused on how you're scoring, because the color examples you give in post #1 do not match up with the colors I'm seeing here, so I think I'm doing it wrong.

Actually, a -3.
Here you go, this should clear it up
Sorry I wasn't clear.
EDIT- wow, thanks. I didn't realize that I still had the old color labels (and in the wrong oder twice!). FIXED!

I entered pretty late in this one, but I could tell by the score that it was still going down, so I decided to enter 1 lot aiming at making 10 pips. It happened in a short time, after a small retrace. During the retrace, I trusted the score and I was always safe. I went to close at 10 pips but I'm a bit slow (doing it manually, didn't put in a TP) and I closed at 15pips.

As you can see, it's still going down and the score is still well below 0, but I will stay out since the safe bet is getting in at the beginning as per the rules.

FrostCall

I have downloaded but cannot get the numbers, 4 and 1 to appear as you have on your chart, I only get 0 and 2
Could you please help
Thanks

Try using a different currency pair and a different time frame. Also, check the properties of one of the frames for the indicator, and make sure that it has the numbers listed in the picture below. Other than that, try some different wingdings from the chart below. If none of them show up, then I'm guessing there is something wrong with your MT4 installation or with the wingding font on your copy of Windows. Perhaps check the windows fonts that you have installed if changing the wingding symbol does not show the correct symbol (number) for you.

Thanks I`ll take a look

FrostCall

I have changed as you mentioned, but still no 4`s and now I only have 0`s and 1`s

Thanks again

If you change the symbol to some other wingding, like 74 for a smiley face, do you see that? If not, you may have a font problem.

sorry to be a pain, I have no idea where to look for this

I'll send you a private message to help you out