Trading System Using Relative Strength-Part 2 | Page 13 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Trading system using relative strength 2,816 replies

Updated CCFp and CFP indis for relative strength trading 55 replies

Relative Strength Basket Trading System 3,479 replies

Dyekid217 Trading relative strength and CICR 0 replies

VT Moving Averages of Relative Strength Index Alert Wanted 1 reply

Attachments: Trading System Using Relative Strength-Part 2
Exit Attachments

Trading System Using Relative Strength-Part 2

  • #241
  • Oct 18, 2008 10:24pm Oct 18, 2008 10:24pm
hi paris and ferrufx,

so you think the reverse strategy will be the best system?
in CCfp indicator v1.0.4 (the latest one), in parameter "use Bar instead of MA will be TRUE or FALSE?

i set it TRUE... is that correct?

what is your SL and TP?

thanks
  • #242
  • Oct 18, 2008 10:30pm Oct 18, 2008 10:30pm
Quoting crushbeat
hi paris and ferrufx,

so you think the reverse strategy will be the best system?
in CCfp indicator v1.0.4 (the latest one), in parameter \"use Bar instead of MA will be TRUE or FALSE?

i set it TRUE... is that correct?

what is your SL and TP?

thanks
The "use Bar instead of MA" settings doesn't have nothing to do with the original strategy. It was requested by a member here. Keep the default to false if you want trade with the original CCFp calculation.

FerruFx
MT4/MT5 EAs/Indicators/Alerts coder
  • #243
  • Oct 19, 2008 12:05am Oct 19, 2008 12:05am
thanks ferrufx..
  • #244
  • Oct 19, 2008 12:12am Oct 19, 2008 12:12am
Quoting FerruFx
Here's attached the new release of the CCFp-Diff.

1. Added an option true/false to display histogram and/or suggestions

2. Added an option true/false to reverse the suggestion (see note below)

3. Added an email alert (start new bar)

4. Added an option true/false to use candle instead of MA in the CCFp calculation

5. Added a checking if all pairs involved in the CCFp calculation received their first tick at bar open (to be tested in real time ... can't be done with market close)

About the reverse option: the thinking was that the reverse might be an option in ranging market, so setting the level would determine the borderline. When setting the level to 3 for example, suggestions for pairs below the level will be reversed, suggestions for pairs above the level will be no-reversed. For those who don't need to filter and want ALL suggestions reversed, then just set the level to 11.

IMPORTANT: the suggestions to be reversed are just signaled with a colored sign BUT for not confusing some newbies who don't take the time to read the thread, the direction Buy/Sell are the standard ones.

Hope you will enjoy this new one like the previous!

Thanks again for your support and motivation.

FerruFx
Can some1 could come out with pdf manaul version??

That will be gr8..
Sonic
  • #245
  • Oct 19, 2008 12:20am Oct 19, 2008 12:20am
Quoting harigp
First of all no one will understand the numbers you are talking about in the
last post

I myself and lot of other members has taken lot of hours to go thorugh the RS 1 and RS 2 post and analyis the whole concept of the thread
an believe me no one is going to give you the concept in a platter in a second

Read and understand the post
Thanks harigp and thank you Ferrux Fx, for the swift reply to my post..http://www.forexfactory.com/showpost...&postcount=168

Appreciate, if any members here has indicator showing differences of bar 1 and bar 0, i b very much obliged.
I dont mean the sign "-" or "+" not useful, just want to get some idea how "strong" is the - or + in the indicator window.

Thanks ferrux Fx for the great indicator

umpamapadi
  • #246
  • Oct 19, 2008 1:26am Oct 19, 2008 1:26am
Quoting umpamapadi

Appreciate, if any members here has indicator showing differences of bar 1 and bar 0, i b very much obliged.
I dont mean the sign \"-\" or \"+\" not useful, just want to get some idea how \"strong\" is the - or + in the indicator window.

Thanks ferrux Fx for the great indicator

umpamapadi
Of course umpamapadi it is very easy and explained in the first few post of ES Trader's closed thread. http://www.forexfactory.com/showthread.php?t=113181 top right is a paperclip download one of the CCFp Inidic which works for you and follow the instruction as per KS trader. You can then read at any bar you like in the Data window
  • #247
  • Oct 19, 2008 2:08am Oct 19, 2008 2:08am
Dear Thread,

Sandy's suggestion/plea/advice to think out when do you reverse (convergence toward the 0 line) and when do you trend-follow (divergence away from the 0 line) is exactly correct. What are those parameters?

Lenoxer
  • #248
  • Oct 19, 2008 3:24am Oct 19, 2008 3:24am
Quoting Pipo
Of course umpamapadi it is very easy and explained in the first few post of ES Trader's closed thread. http://www.forexfactory.com/showthread.php?t=113181 top right is a paperclip download one of the CCFp Inidic which works for you and follow the instruction as per KS trader. You can then read at any bar you like in the Data window
Thanks Pipo

Why dont i think of that, hmmmm.

BTW, i still cant the hang of it, i mean, how Paris Hiltondid. Doing the opposite what the ccfp tells,..Of course when i saw the 1st candle up lst candle is down. e.g today, AUDUSD indic said buy..

http://img243.imageshack.us/img243/1...8octno4.th.pnghttp://img243.imageshack.us/images/thpix.gif

Any ideas..?

umpamapadi
  • #249
  • Oct 19, 2008 4:28am Oct 19, 2008 4:28am
Quoting umpamapadi
BTW, i still cant the hang of it, i mean, how Paris Hiltondid. Doing the opposite what the ccfp tells,..Of course when i saw the 1st candle up lst candle is down. e.g today, AUDUSD indic said buy..

Any ideas..?

umpamapadi
There are different application for the CCFp and one of it is the return of a currency from over bought/oversold to the balance line or towards it.This is where I think we went wrong as we bought at the very top and sold at the very bottom. Paris noticed that the trades turn out way better going against the signal.

BTW looking at your chart and the histo of the AUD is very strong but the USD is not that weak compared to JPY or EUR. So a higher level setting would have properly filtered out such weak signals as the AUDUSD buy.
There is still a lot of fine tuning to be done. I am sure everyone will be busy
testing their own Ideas and if successfull share it with others.
  • #250
  • Oct 19, 2008 4:59am Oct 19, 2008 4:59am
this is the first time I try this, I attached the indicator to a chart and get the following error:
2008.10.19 17:56:40 Error reading file 'C:\Program Files\MetaTrader - Alpari UK-Demo\experts\indicators\CCFp-Diff_v1.04.ex4'
  • #251
  • Oct 19, 2008 5:44am Oct 19, 2008 5:44am
Hi ferrufx....Isnt this something like your old xmeter ea?
forexflash
  • #252
  • Oct 19, 2008 5:49am Oct 19, 2008 5:49am
Quoting FOREXflash
Hi ferrufx....Isnt this something like your old xmeter ea?
The tool I coded here isn't an EA.

And the !xMeter is based on pure price ... CCFp is based on MA.

But the principle of individual currency strength is the same yes.

FerruFx

PS: I am not the coder of !xMeter. I just coded an EA based on.
MT4/MT5 EAs/Indicators/Alerts coder
  • #253
  • Oct 19, 2008 7:29am Oct 19, 2008 7:29am
How are we handling the spreads? Being down 50 or more as soon as I enter is un trade-able for me. I've seen exotic pairs at over 200 for the spread. Is this a non issue? Is anyone considering the spread? I personally toggle all the spreads higher than 10 off from FF's indicator. Spreads go higher at news times. Is there one broker anyone can recommend solely on maintaining there spreads?
  • #254
  • Oct 19, 2008 7:45am Oct 19, 2008 7:45am
Quoting Pipo
CCfp stands for Complex Common Frame percent and it measures the fluctuation relative to each other. The nearness of a currency to the balance line (0) means that the currency is in the balance state towards other currencies.
Thinking about this I start to understand more how its calculated why one buy signal is a buy and the other buy signal is a sell.

It has a lot to do where we are in relation to the balance line.

1. A buy signal at the extreme top half of 0 one would expect a return to the mean and sell the currency. So a sell could be placed when it starts to show signs of weakness either on a lower TF or combined with v1.03 current. A stoploss could then be placed just above the last significant top and the trade closed or scaled out near or at mean. An entry needs to be monitored as in a strong up trend it could turn out to be a retracement.
It would explain why Paris was successful trading the opposite

2 A buy signal at oversold or extreme oversold to 0 would be then genuine buy signal. A stoploss could be placed just below the last significant low and the trade closed or scaled out near or at mean. Also as in 1. The entry needs to be monitored as in a strong down trend it could turn out to be a retracement.
To give an entry a even better chance of success the traded pairs should be coming from the opposite and returning to the 0. Now if we close our position only partially near 0 or by crossover of the pair and lock in some profit then let the rest of the position to continue the ride as long as each pairs is moving opposite to each other and away from the balance line.
A signal could be generated if both of the pairs are above or below the 0 in which case I would ignore it until one of them crosses the 0 line and both moving away from it.

What do you guys think? Does that make sense or am I wrong in my logic here?

Pipo good analysis. Let me restate and let me know if I understand correctly.

 

  1. If a currecy is overbought and we get a buy signal then we reverse and sell instead
  2. If a currecy is overbought and we get a sell signal then we take the sell signal
  3. If a currecy is oversold and we get a buy signal then we trade the buy signal
  4. If a currecy is oversold and we get a sell signal then we reverse and buy instead

If ths is true then would you determine overbought/oversold status for each pair that had a signal on the H4 timeframe (since the basket approach used the H4 signals) ? Or would the H4 and lower timeframes have to show agreement for the most part in being overbought/oversold?

Thanks,
Sandy

  • #255
  • Oct 19, 2008 8:10am Oct 19, 2008 8:10am
Quoting TickJob
this is the first time I try this, I attached the indicator to a chart and get the following error:
2008.10.19 17:56:40 Error reading file 'C:\Program Files\MetaTrader - Alpari UK-Demo\experts\indicators\CCFp-Diff_v1.04.ex4'
But v1.03 is working fine, how come v1.04 does work on my pc?
Attached Image
  • #256
  • Oct 19, 2008 8:51am Oct 19, 2008 8:51am
Hi guys,

We can use Orest indicator to determine if the market is ranging or trending...

T101 explains it in post#247 here:
http://www.forexfactory.com/showthre...=57375&page=17

Respond to question about ranging...
The Orest indic there are some figures at the bottom. on of them is the total Buys the Other is total sells then the sum of the two. I normally look at the 4 hour column Look at the T: if that value is just within the amount of spread. Say for Ibfx it is the spread is 75 if the total is just runningin that amount is within 100 - 0 and fluctuating around there then you have a ranging market. if you have trade and in profit you can wait it out because it coul dbe just consolidation. I fyou have no trade then dont trade and stay at the side line.
Julius


If the market is ranging we use Ferru indicator and pull a Paris Hilton reversal...

If the market is trending we use Ferru indicator and go normal...

Steve, great work with your trade management EA...

Ferru, new 1.04 indiactor is awesome...

Shiva, Don Of Dubai, love the template and the Jag looks good...


Geeve
  • #257
  • Edited 9:48am Oct 19, 2008 9:38am | Edited 9:48am
Quoting nubchai
Pipo good analysis. Let me restate and let me know if I understand correctly.

  1. If a currecy is overbought and we get a buy signal then we reverse and sell instead
  2. If a currecy is overbought and we get a sell signal then we take the sell signal
  3. If a currecy is oversold and we get a buy signal then we trade the buy signal
  4. If a currecy is oversold and we get a sell signal then we reverse and buy instead

If ths is true then would you determine overbought/oversold status for each pair that had a signal on the H4 timeframe (since the basket approach used the H4 signals) ? Or would the H4 and lower timeframes have to show agreement for the most part in being overbought/oversold?

Thanks,
Sandy

Hi Sandy
#1 and #4, I will be looking at the histo of both version of CCFp(v1.04 and 1.03 current) on the H4 ,H1 and M15 and signs of reversal should make itself visible there also I like to see the ccy in relation to the balance line so I have one of the previous CFFp with the lines on a chart and look at the chart of that pair itself.
If I have evidence that the opposite strength is building up then I would enter in the opposite direction to the given signal.

#2 and #3, correct but I still go throught the same process as with case 1 and 4 to determine and or confirm the signal. The histo on lower TFs should give us evidence for the strength to hold or increase in same direction.

Quote
If ths is true then would you determine overbought/oversold status for each pair that had a signal on the H4 timeframe (since the basket approach used the H4 signals) ? Or would the H4 and lower timeframes have to show agreement for the most part in being overbought/oversold?

Yes I would use the H4 signal but use the lower Tf for the purpose as explained above.

If a lower tf's show agreement with the H4 then I go with the trend until the lower TF's start to show weakness or revers signals.

There will be different ways to apply CFFp but that's how am going to test it for this week.
  • #258
  • Oct 19, 2008 10:28am Oct 19, 2008 10:28am
While writing all this yesterday and today I saw that FerruFX already produced version 4 of his magnificent indicator having the CLOSE=true option available. Thanks a lot mate….. splendid work !!
First of all I would like to share that I have been developing Metastock trading systems for about 7 years, however because of my age I have decided not to start studying MT4 language, although it is tempting and yet meanwhile I have gathered a little knowledge how to make some modifications.
Today I have had my doubts of adding all this to the thread. At first glance it looks a bit complicated, but when you know how it works you are able to make trade decisions very quickly.
My aim is not to contribute to a system which in itself is simple to practice and make it more difficult to use. It’s just that some traders were screwed with enormous Drawdowns using this system. For those traders that just like me always seek trade setups that avoid high drawdowns……..my views on how to start using the RS System in a slightly different manner may be of help.
Having said all that let’s turn to the trading system we are discussing here....... Actually we are not using the CCFp indicator in a way it has been designed in the first place......... that doesn't matter of course when results are positive and the manner in which we use this indicator is rightly understood. Even ES Trader quite recently has admitted that reversed BUY and SELL signals also seem to work well with his trading system.
Anyway in my view the way we are trading this system best is when "the basket" as a whole is right at the beginning of a trend up or down...... So in order to finetune each trade setup at the beginning of a new H4 candle..... we want clear evidence that the current candle will have the potential for at least one..... or even more successful trades in the next 4 hours !!
So to begin with we need CLOSE signals on H4 and also on the other TF's (H1, M5) that are not being interfered by MA delays. That is why I have asked FerruFX for an option true/false in his indicator to exclude MA delays completely. He has agreed to do this and already finished the job in version 4.
In the example (screenshot) shown here I have used EURUSD on 3 TF's H4, H1 and M5. Now when we have all 3 TF's in accordance in this way.... using FerruFX’s indicators all showing BUY or all showing SELL for a certain currency pair..... we have a clean cut CLOSE signals determined situation over the latest bars …. Providing a much more trustworthy trade setup >>>>> Note: this explains immediately why ES TRADER made clear several times that the better entries most of the time occurred ...... half an hour later after the beginning of the current H4 bar.
Now how do we pinpoint visually a valid trade setup? There are many ways.... but this is the way I do it. I got sick of Fibonacci and all other pivot systems...... I have tried them all but the problem for me always has been that it took way to much time to determine whether or not a trade was valid. So out of all this I have distilled a pivot system that only uses 4 lines on the chart, which always show remarkable accuracy in any market and on any chart.... I was lucky to find an equivalent for my Metastock formula's in MT4 and made a few modifications to those….
These lines are derived from PrevDayAndFloatingPivots..... Here we do not use the Floating part. Therefore I have omitted this from the indicators and renamed them in order not to cause interference with other charts where they may be used. That also goes for the other indicators JE-QQE and JE-ArrZZx2+. The JE-ArrZZx2 helps identify the area where a valid trade setup bar is to be expected. In the example you’ll notice this in theM5 chart. Don’t use the ZZ drawing option in this indicator, for in that part of the indicator there is a bug that causes MT4 to consume too much resources of your PC….. It will ultimately halt MT4 completely. Another bug is in the refreshing…… when you would use it also use as an MTF indicator on the same chart, it won’t refresh properly. Reason why we don’t use these options.
The yellow line is the Daily OPEN. The other three are Targets to the up and downside. These four dotted lines are very important because they show where the better trades start, where is the next target and also they represent the most significant levels of support and resistance during each trading day.
Definitions:
1 When the trade moves towards the purple line and we have a wide opening between yellow and purple..... this is a first indication for a trending day. There are other possible trending days. Good ones you’ll see develop when purple and yellow lines are close together and price rises above or falls under both of them.
2 When the gap is narrow between yellow and purple... however price is moving between those two....... we are in a non trending situation. In this case we look for the breakout out above or below one of those two lines.
3. A breakout above yellow - purple area…….and aqua line at great distance is an indication for an uptrend towards the aqua line...... which now has become our target.
4. A breakout below yellow - purple area…… and deeppink line at great distance is an indication for a downtrend towards deeppink line...... which in this case now has become our target.
5. Whenever price reaches a target line…… we immediately close the trade…. We normally don’t wait for the price to move beyond a target line, because 99% of the time price first swings up and down at these target levels before continuing direction or before bouncing back. So every time when price reaches a target level…… we have arrived at a new trade setup situation and we should examine the new trade setup situation before continuing with a new trade. We only continue with a new trade when we have evidence that again there will be enough boost potential for the next trade. Comparing currency pairs that have same correlation with EURUSD like NZDUSD, f.i. these indeed start trending most of the time simultaneously at these pinpointed trade setups for EURUSD. So I believe that for the basket as a whole this should work. Some currency pairs in the basket will be late to the party and some others will be earlier…….

The screenshot shows an example of a visually pinpointed trade setup. Look at the latest setup marked by the yellow arrow. On the H4 chart we see (12 hrs GMT bar) that price has reversed to the upside at the deeppink line. If FerruFX’s original indicator (new version 4) is being used having Close indication option set to true over the 2 previous bars we get here a SELL signal (because C2>C1). However it’s very obvious that price has reversed at the deeppink support level and is heading for our first target which is the purple line. Price going up is also verified by the QQE pointing up from a small red support level…… and QQE not being to close to resistance provided either by the 50 line or the aqua dotted line.

Using FF’s current indicator here instead (having also CLOSE option set to true) this one would show a BUY signal (because C0>C1). So now that we have visually pinpointed first evidence for a possible valid BUY entry we go to the other TF’s and see what the message is here. BTW. I normally use H1 and M5 and sometimes peep at the M30, For the record to prove the accuracy of the 4 PrevDayPivot lines I’ll go down to the M5.

On the H1 chart, also on 12 hour bar where it says “valid BUY” …. we see that C1>C2 and thus have further evidence for a valid BUY. FF’s regular indicator having set to Close option=true gives us that message here too. Also the QQE indicator is rising and just crossed the dotted signal MA.

Instead of going immediately to the M5 chart… you might want to check the M30 chart for instance how things have developed here. If you do that take care that FF’s version 4 is set to CLOSE= true option, TF =30 and Tradelevel is set to 0. Also on the 12 hour bar we now already have a detailed situation which would satisfy me enough to enter the BUY trade. Again we see here confirmation of a rising QQE above the dotted signal line. The 12:30 hrs bar would be the better one to enter the trade because now the QQE crosses resistance at the 50 level (central line of the QQE), whereas the 12:00 hrs bar bounces off first at the 50 line.

A further refinement on the M5 chart shows that the 12:35 hrs bar is the best choice to enter the trade, This is in full agreement with QQE which after first having crossed the signal line now crosses the 50 centerline to the upside.

Please take notice that this is in full agreement with ES Trader’s experience that he often saw the better entry points about half an hour later than exactly at OPEN of the current H4 bar. Next also take notice how accurate this trade ends…. exactly at the purple line target. Also notice that the next bar on the M30 chart also is a valid trade setup >>>>> this trade should be taken when price moves above the purple line (resistance now becomes support) towards our next target line (aqua). How nice this works can be checked again in detail on the continued M5 chart !!!

Conclusions

Using this trade setup we don’t have to wait for agreement on the 3 TF’s using only FF’s regular v4 indicator, for we may quite often already find an earlier agreement using FF’s current version on H4 and the regular (version 4) on the TF’s H1 and M5

So therefore I have another request FerruFX, if you would be so kind to also modify your Current version indicator in such a way that we can use it with this trade setup? I mean using the CLOSE option and also presenting current BUY – SELL advise.

Scalpers may want to use a combination of H1, M5 and M1 templates.

For those of you that may want to study setup possibilities I have attached templates and indicators. All objects are still intact on the templates…. So you have to delete those when you want to refresh your own templates without the objects.

Good luck to all and many pips in the coming week,

John
Attached Image (click to enlarge)
Click to Enlarge Name: mtf's of 17-10-08 - 04 45 gmt.gif Size: 129 KB
Attached File(s)
File Type: zip rs h4 close=true trade setup.zip   149 KB | 1,418 downloads
  • #259
  • Oct 19, 2008 10:52am Oct 19, 2008 10:52am
Does anyone have an indicator that draws a simple vertical line each x hours (in this case 4H) starting at x hour?
It would be helpful for back testing various setups in smaller TF’s with different broker times.
I found some session time indicators but they don’t do that.
  • #260
  • Oct 19, 2008 10:56am Oct 19, 2008 10:56am
Great post John. Thanks for your analysis.

About a v1.04_current version ... will do but let me some time. It is sunday night here (23:00 GMT+7) and after 130hrs coding this week, I need few hours of sweet dreams!

FerruFx
MT4/MT5 EAs/Indicators/Alerts coder
0 traders viewing now