WAVES Heatmap system and EA

Thanks for your code analysis. Some are using MA breakout of BasketBars for entry signal.

I've noticed that T3RSI GROUP peaks in combination with BasketBars color change seem to reliably predict trend shift for GROUP. That becomes confirmation in fast acting single pair trades; and provides early signal for slow acting single currency pairs.

The issue with false signals is lack of ANGLE--which is increasing Momentum. We need a GROUP Momentum indicator coded.

The TDI RSI line outside the MarketBase long period MA line relates RSI to price action. There's that fuzzy zone in which MIDDLE conditions give way to forming trends. If we wait for actual price action to move, it's safer but misses more of the total potential profit within a given trend (swing EXTREME to opposite EXTREME). HMA color change gives one such indication.

Several issues emerge when contemplating a single pair trading entry.

1. Volatility (ADR) enough to risk spread(s)? Are MARKET and/or single currency pair moving?

2. Timing in middle to extreme price action wave; early entry best.

3. Fractal longer TF WAVES support? TREND pushing entry pair trend?

4. Accelerating Momentum? This happens at RSI cross T3MA. And when longer TF WAVE overtakes current trading timeframe price action. And for slow acting pairs, when GROUP WAVE drives single pair PA moves. Related to how STRONG is the resulting price movement likely to be?

5. Our trading edge comes from the broader leading fractal WAVE viewpoint. As shown in HEATMAP, longer timeframe TREND, RSI, Momentum, and sometimes GROUP or subgroup.

Properous regards,

George

Hi all,

What a beginning to the week! The Market dropped like a stone on the very first minute candle--about 150 pips for GJ. Did anybody catch it? After that, I managed to scalp around 70 pips single pair profit using WAVES system. Sometimes it feels like I'm trading half blindfolded. Our single pair indicators are good, but key indicators for GROUP haven't been developed yet.

We need better tools (indicators and EA). I've been playing around with the TDI indicator, which was coded a few years ago by one of my old forex instructors. Small world. Anyway, we already have part of it and more in the T3RSI single pair and GROUP indicators. I wish someone would help code an equivalent indicator set for the GROUP.

My fine perception informs me that big WAVES of longer timeframes, and GROUP price action both help to propel the smaller waves we are riding during open trades. I've noticed that this fractal propulsion seems very certain as it moves our carefully selected trades into profit.

It's nice to have RSI cross fast smoothed MA, longterm MA baseline, Momentum, and Bands all in one indicator window. Can anyone help with any part of it?

Gratefully,

George

Did you read this thread ??

http://www.forexfactory.com/showthread.php?t=116412

Ferux developed indicator based on CCFP, the latest version is MTF which will give the trade signal if the currencies will get synchronized to move on multiple TF. So I believe it may be kind of a 'wave dedector', for trend continuation but with this approach we would never get the reversal.....

There was a lot of discussions how to theat those signals, some guys were taking reverse signals instead with good results also. Have a look

So what was your entry criteria for catching GJ move ??

Krzysztof

19Nov08.5:10 GBPJPY. Basket Bar color change to red. At 05:11 RSI peak above 70 in T3RSI and GROUP T3RSI indicators. 05:12 TDI green line cross red line downward. 05:13 HA candle color change to red gives sell entry signal, open short trade at 144.55. Monitor HA candles and T3RSI until flat peak at 05:27-28 and cross up at 05:29; take profit at 144.16 at 05:30. Captured profit of 39 pips within 17 minutes.

Note that GROUP trade would have yielded many times more profit. I missed it because of script execution problem during that time.

Example screenshot attached.

Kind regards,

George

Hi George,

I came across your thread by chance as I was looking for basket trades... Can I just say that I am very pleased that I did and that you have taken the time to share the details of this with us. Thank you.

Firstly, can you post your settings for the TDI? There seems to be a lot unnecessary stuff in there that looks like noise on my chart. What in particular are you looking for on it?

Secondly, how are the group indicators coming along? Any progress in this department? Have you checked out some of ferru-fx's indicators like the multi pair/indices watcher? (attached for your consideration)

Thirdly, I note that you are no longer using the orest heatmap due to it hiding the candles and being slightly unstable. How is your heatmap coming on and will it be more simple to use than the orest?

Lastly, you use this method a lot for scalping. Wouldnt it be better to wait for a more premium signal (agreed this needs a lot of screen time), and if so, how do you think the signal could be generated?

Sorry, just one more thing... do you use the basket bars to determine correlation between pairs yourself, or do you generally check the postings like the URL at oanda and Mataf.net. I'm interested in this particularly as i prefer to feed myself, rather than to be fed

Thanks in advance for your response.

Lim

Is there still a repainting issue with the latest version?

Hi comdoc

Regarding your setup. Yes it was possible to catch this trade, I use similar methods. In your screen you have actually 3 RSI indicators: T3RSI, T3GROUP
and TDI. All of them are showing more or less the same, in TDI window if green (RSI) cuts the yellow band midline that's sell signal.

Regarding Orest indicator. As far as I know this indicator shows order of pairs which went up and down in different time periods but change is not relative but in pips so I'm not sure if it is usefull for us as e.g AUDJPY must be twice stronger than for example EURJPY or GBPJPY to be above them in the list.
I believe it is only usefull for baskets build like in T101 thread.

Do you know maybe what white number near the arrow means in this indicator.

Regarding CCFP Ferux indicators. They are great but data is a bit delayed first because of way how the CCFP is calculated (difference of EMAS),
second the lowest TF which you can set there is 5 min so they actually show the difference between last and before last 5min value of CCFP the best. I think it's too late, however using them let you judge the storngest
and the weakest.

I believe in order to catch the waves from middle conditions it is necessarry
to introduce something like timing mechanism e.g. synchronizations of different stochastic oscilators from different TF.

Watchnig this and reading this thred can be interesting

http://www.forexfactory.com/showthread.php?t=22105

If you see another way to predict move or certain pair or basket or poiniting certain moment of start of the move than share your view.

Krzysztof

The example of 'move from nowhere' is jump of EURUSD at 19.11 one hour before of US open like 170 pips. If somebody will give me an idea how it was possible to predict this than predict reversal of this......there was of course breakout bla bla bla bla......it could be to the downside also....

Krzysztof

Hi everyone,

I do hope that this thread hasn't died... It seems to be the most well reasoned and well thought out basket strategy that i have read thus far.

Where are you George?

Hi Lim,

Thank you and welcome. Comments follow.

Thoughtful questions most appreciated,

George

Hi Max,

Scott seems to have solved this issue in his latest version 2.0E; it's working well for us. Thanks for his fine programming efforts.

Best regards,

George

Hi fajst_k,

[quote=fajst_k;2369466]Hi comdoc

"Regarding your setup. Yes it was possible to catch this trade, I use similar methods. In your screen you have actually 3 RSI indicators: T3RSI, T3GROUP and TDI. All of them are showing more or less the same, in TDI window if green (RSI) cuts the yellow band midline that's sell signal."

Yes, I realize there's duplicity. That's because, for the most part, we are forced to use whatever has already been coded. It muddles up the learning process for the trading system and method. My capability is mostly limited to modification of existing indicators--and we have no WAVES EA encoded.

"Regarding Orest indicator. As far as I know this indicator shows order of pairs which went up and down in different time periods but change is not relative but in pips so I'm not sure if it is usefull for us as e.g AUDJPY must be twice stronger than for example EURJPY or GBPJPY to be above them in the list."

That's essentially correct in my understanding; Julius has posted the same complaint.

"I believe it is only usefull for baskets build like in T101 thread."

Well, it does show some useful information related to single currency pair trades--but there's certainly room for improvement. I must praise his substantial accomplishments, but Orest doesn't seem interested in modifying his indicator for our WAVES HEATMAP purposes.

I've written at length about HEATMAP requirements and design before. There's a fundamental flaw that's never been addressed in existing heatmaps, including Orest. Basically, a useful HEATMAP should reference from the start of forex trading week, local server day, and major market opens. The MTF TREND, WAVES and single pair trends and countertrends need to be displayed at a glance in the HEATMAP window.

"Do you know maybe what white number near the arrow means in this indicator."

It's the position from which the single pair moved.

"Regarding CCFP Ferux indicators. They are great but data is a bit delayed first because of way how the CCFP is calculated (difference of EMAS),
second the lowest TF which you can set there is 5 min so they actually show the difference between last and before last 5min value of CCFP the best. I think it's too late, however using them let you judge the strongest and the weakest."

Understood. As I wrote above, it seems overly complicated for our WAVES trading purposes. We had the same problem with timeframe before we bugged Orest until he changed it to make the timeframes user selectable. to Mr Orest for his response.

"I believe in order to catch the waves from middle conditions it is necessarry
to introduce something like timing mechanism e.g. synchronizations of different stochastic oscilators from different TF."

My research and trading experience with Stochastic oscillator indicated that it sometimes lags RSI. Yes, you're correct regarding multiple timeframes. That is at the very heart of WAVES cycles and counter cycles price action movement.

"Watching this and reading this thread can be interesting"

http://www.forexfactory.com/showthread.php?t=22105

The author is dancing around it when he calls our attention to Stochs for MTFs. My experience with Stochs as he points out, and with RSI is that false signals can occur. These are associated with trend continuation vs. reversal issue. GBPJPY is notorious for breaking out of oversold or overbought levels...and proceeding to skyrocket through support or resistance levels.

"If you see another way to predict move or certain pair or basket or pointing certain moment of start of the move than share your view."

Krzysztof

How do we know in advance? My research indicates that we can get clues by viewing longer GJ timeframes trends/countertrends waves, AND sometimes by looking at GROUP WAVES, and TREND change when GROUP leads single pair price action (not always true). GROUP and single pair RSI and Momentum are leading indicators of where price is likely to go.

Trading system design Considerations,

George

Hi Lim,

Sorry, was on a short vacation. The thread is alive and well.

Regards,

George

Hi and welcome Lim,

Hi George,

"I came across your thread by chance as I was looking for basket trades... Can I just say that I am very pleased that I did and that you have taken the time to share the details of this with us. Thank you.

Firstly, can you post your settings for the TDI? There seems to be a lot unnecessary stuff in there that looks like noise on my chart. What in particular are you looking for on it?"

Changed default to 8 period to match T3RSI default. We use it for baseline, volatility bands, and trading signals. I've asked for a GROUP TDI that includes GROUP T3RSI, Momentum, Midline, and GROUP bands to be encoded. Anybody out there willing to try?

"Secondly, how are the group indicators coming along? Any progress in this department? Have you checked out some of ferru-fx's indicators like the multi pair/indices watcher? (attached for your consideration)"

No progress. This is a continuing challenge to involve MQ4 programmers on a volunteer basis. I appreciate that professional coders give first priority to paid projects. My skill level currently is modification of existing indicators. Most skilled coders don't seem to appreciate the potential of the WAVES system. Over many months, I've gathered 6 programmers, but only one has made any signifigant contribution to the indicators. First priority in my mind is the WAVES HEATMAP.

Thirdly, I note that you are no longer using the orest heatmap due to it hiding the candles and being slightly unstable. How is your heatmap coming on and will it be more simple to use than the orest?

The HEATMAP still only exists in my mind. We do use Orest T101 indicator attached to only one chart, but it has many limitations. Orest doesn't seem to be interested in modifying it for the WAVES trading system.

"Lastly, you use this method a lot for scalping. Wouldnt it be better to wait for a more premium signal (agreed this needs a lot of screen time), and if so, how do you think the signal could be generated?"

This is a matter of personal trading style and preference. Screen time problem could be helped a lot by automation with audible and visual signal alerts.

"Sorry, just one more thing... do you use the basket bars to determine correlation between pairs yourself, or do you generally check the postings like the URL at oanda and Mataf.net. I'm interested in this particularly as i prefer to feed myself, rather than to be fed"

Premium GROUP entries can be identified with longer timeframe TREND/counter TREND waves, GROUP RSI and BasketBar Signals. Single pair signals rely on RSI divergence followed by T3MA cross. WAVES HEATMAP EA could begin with a good single currency pair automation.

Thanks in advance for your response.

Lim

Coding Considerations,

George

Merry rangebound day,

The Momentum indicator that comes with MT4 platform doesn't help much for our WAVES trading purposes. So I've been experimenting. One sure sign of increasing momentum is when price breaks a small period moving average. The TDI system uses either a 5 or 8 period highs and lows MA channel. When candle closes above the channel, it's a buy signal; when price closes below the channel, it's a sell signal.

In a rangebound market where GROUP trades are hard to find, relatively volatile single currency pairs provide profit opportunity. My fave is GBPJPY. Today it's been in a 20 pip range around 146.00 for much of the trading day. I've been waiting for a close above the highs 5 period SMA to go long, or close below the lows SMA to go short. Take profit when HA candle changes color. Note how BasketBars also break out of channel just before. Here are 3 examples over 2.5 hours on 1M GJ chart. These 3 trades captured profit of 65 pips.

Happy trading,

George

Hi again,

Here's an example which could have been a GROUP trade:

At 0627 GMT on 1 Dec. 2008 GBPJPY 1 minute chart. Elevated BasketBar from 0826 green to 0827 red. T3RSI crosses for GJ and GROUP. Open short on GBPJPY at 0827 at 146.01, and take profit 58 minutes later at 0925 at 143.77 for 224 pips. GROUP move in same time period was worth around 1100 pips. Conservative trade management would have taken 65 pip profit at T3RSI oversold cross and HA candle color change to green at 145.36 at 0900. Then reentry at 145.31 at 0903 on 2nd HA color change back to red, with close below 5 period lows MA followed by same exit at 143.77 for an additional 154 pip gain and total of 219 pips profit. Both GROUP trades netted about 1000 pips gain.

Prosperous regards,

George

Hi all,

Here's another step-by-step example of single pair entry and exit, from 3Dec08@0028. Refer to yellow boxes on chart.

From left to right, we note RSI peak divergence followed by RSI cross T3, over several minutes. Green HA small body candle followed by red HA small body candle: a double MIDDLE condition. Then GROUP indicators help confirm trade possible; BasketBar changes color as GROUP RSI over several minutes finally turns sharply down. This is coincident with our short entry signal: red HA candle breakout below 5 lows MA line of increasing angle MA channel at 0028. By waiting for multiple indicators confirmation, we increased our probability of a successful trade.

Then simply monitor the succession of red HA candles below the red 5 MA lows line. Again notice the slow RSI peak and cross off circa 30 area followed by a color change to green Doji HA candle indicating a conservative take profit exit. Profit from this 27 minute trade was around 40 pips. This in a slow trending market with no GROUP trade opportunity.

Please ask questions if you need clarification.

Best regards,

George

Hi all,

Here are some new indicators for single pair trading. ASCTrend gives a signal and alert as trend gathers momentum. Volatility accurately indicates for single pair. These have increased our profits trading single JPY pairs.

As always, we need these to be extended, modified, and encoded for GROUP trading. Here's my current wish list:

GROUP TDI which includes T3RSI, volatility bands, and baseline.

GROUP Volatility, in same indicator window--if possible.

GROUP HA CANDLES with 5 period MA, and breakout TREND audible and visual alerts.

Thanks to all coders out there,

Prosperous regards,

George

Hi anyone,

Is anybody reading this thread? There have been no responses to my work for the last few weeks. Shall I just close the thread? Especially discouraging is the lack of help in programming the indicators and EA for this exceptional system. I've invested a lot of energy in the past several months in developing the WAVES system. My original intention was to create an open source project that everyone could freely benefit from. Evidently nobody feels it worthwhile to participate. Until that changes, I'm disinclined to continue pouring resources into research and development of this project. Maybe I should just hire some professional coders, and create a commercial EA. What do you think?

Peace out,

George

I'm still following this thread, but unfortunately I'm not a programmer and somewhat of a newbie to forex. I'm still learning about the concept of basket trading, so I've been keeping my eyes and ears open and my mouth shut while I'm absorbing all this information.