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Recent Strength indicator

  • #61
  • Aug 10, 2009 4:24pm Aug 10, 2009 4:24pm
Quoting institute
As I understand it properly – RS gives us an estimate of supply/demand for a currency. .........
Thanks very much for your comments. They have given me some new ideas to work on.
  • #62
  • Aug 11, 2009 9:46am Aug 11, 2009 9:46am
Quoting hanover
Many thanks for the feedback.

I had really high hopes for this indicator (my reasons in post #20). They have since diminished a little, but I nonetheless still find it very useful.

I trade predominantly H1 candle patterns (taking S/R into consideration), hence I start by looking at the Recent Strength (RS) H1 chart. I have the RS settings at: NumPoints = 15, BasePoint = 0, HistoricalShift = 0, SmoothingSMA = 4. The H1 chart confirms which currencies are rising, and which are falling. However, it's usually just as easy to see this by looking at...
David,

Whatever strategies/indicators that are being evolved to measure co-relation is quite tough because the market makers use powerful tech brains as well as super computers to plot the moves for commodity currencies which are basically part of the world's largest casino which is frequented by wealthy individuals, hedge funds and investment banks in particular.

It is only by keen observation and acquiring some experience you may attempt to trade the cross currencies. Seven majors are switches and they are operated in such a way that you can't use technical analysis on them.
Microlots are ideal for trading these currencies. The rewards are there for a person who completely ignores TA and just concentrates on money management. Pre-and-post major data releases are the trigger points.

Whenever sideways or stalling moves are happening for majors e/u, g/u just go to the cross currencies without delay to watch the show. After the job data it was the day for NZD and JPY to move around affecting related cross currencies. E/Nzd and G/NZD: hi-low1,000 pips in 4 days. As soon as the NZD/JPY have done their volatile job, the two majors will start dancing upwards. It should happen in these two days after a major data release.

PJ
  • #63
  • Aug 11, 2009 2:24pm Aug 11, 2009 2:24pm
Hanover, good work.

Very usefull when you set the base point == to the opening of each market, this way you see the strength since NY open for instance. Perhaps a suggestion for a later release would be to set it automatically.
Keep it simple stoopid....
  • #64
  • Edited 7:10am Aug 15, 2009 6:39am | Edited 7:10am
Quoting hanover
There are some good posts on the forum by forexharry, who is apparently very profitable using his own RS-based scalping technique. If I understand him correctly, he uses the TopGun software with an e-Signal data feed. But I can't see any reason why the RS concept couldn't be used with MT4 to achieve much the same result.
I studied TopGun software and their systems.

We have at last two scalping systems there.

FIRST system:

First on is based on MultiMap displaying in graphical form (through intensity of colors) strength and weakness of currencies.

If I understand what I saw that the have a system of displaying both strength/weakness of a currency AND a chosen pair. I don’t know how they calculate it.

There exist a “magic level” of strength (40 and over) signaling that the next move from the retracement will be with 95% probability – at last to the last/maximum/minimum.

Strength/weakness of a pair is used with Keltner channels: high probability entries are chosen when a pair is strong/weak and price touches a Keltner channel (more on this later).

They stress a “reading” market situation and this is a good practice – as it improves edge ie probability taking into account different factors: crossing through important pivots, S/R, hi/low of previous days/weeks, multimap is their main indicator used to choose best pair.

But I have two concerns here:

First issue: Listening to the seminars sometimes I had a feeling that they do not choose the best pairs at the moment – for unknown reason they choose pairs with inferior results in RS. Why? To show the power of MMap? To make a point? Well, many systems are profitable only on historical data. The best choice will always be srongest-weakest - or we dont know something, and they dont talk about it.

Second issue: I carefully studied their points of entry to trends with aid of MMap – and I have an impression that they exaggerate – and the signal from the MMap is LATER than first point of entry – so maybe it is the case of mispresentation of predictive power of this tool. I saw it in several cases – so it looks suspicious BUT – I don’t have access to original data from eSignal and there is a possibility that MMap works better than I think it work.

From practical standpoint – there can be a lag as well as lead in a particular situation – as pairs may lag from different reasons and the supply/demand for a pair is rising.

I believe that it is a futile task trying to find exact beginnings of a trend, it is far safer to wait for one or two confirmations.

But in one case it could be a good idea – when one pair clearly moves against RS close to important S/R level. maybe this filter will show us a stop hunting frequently occurring when institutional traders are looking for good entry points.

In conclusion – this tool is interesting. Combining it for example with „pairs that lag” at the moment might form a true killer.

SECOND system:

Scalping the euro using Keltner channels, here MMap improves probability – there should be some strength/weakness on the market to support the anticipated move.

But there is something that concerns me – I have an impression that someone who presents the material do not have a good experience in scalping, maybe he describes not his own system: trading using Keltner/envelope systems on M1 or on 10/35 tick chart requires ultra fast execution, sometimes action before the signal (yes, entry BEFORE the signal) but here I heard calculation; “you can grasp here 8 – 10 pips” where taking into account delays, spread and fast market reversal is a room in the best case for 1-2 pips or break even.

Generally speaking: excellent promotional material. Full of insights – excellent training but imho sometimes slightly exaggerated. Excellent examples of using Fibo levels, very, very good insight into a market collective behavior.

If you have any further questions please ask.

Regarding Multimap and RS – it needs further study – to find its best predictive application.

Your display with lines is better than MMap’s as we can better see increase/decrease of strength. I suspect that sharp moves (angles over 45 degrees) may signify something interesting – that the supply/demand is rapidly changing and due to “market inertia” it will last for a while.

So I would focus on behavior of pairs “strongest mover up” and “strongest mover down” at the moment. Maybe here the “predictive power” will be slightly better.

Is it possible to prepare a graph for example RS M15 during 4-5 days? It would help in analysis of pairs behavior.

It will do to study one TF as the regularity on other will be the same –longer TF’s are aggregate reflection of smaller TF’s.

EDIT:

Short summary of the first strategy:

 

  1. Choose a pair strongest-weakest at the moment (H1).
  2. Wait for retracement
  3. Enter when price touches Keltner channel (adjust parameters for a pair using previous days, TopGun has one for all approach – adjusting is better).
  4. Exit depending on market situation:

    1. „ten pips”.
    2. middle Keltner line or K’s outer band.
    3. S/R nearby, last swing high/low,
    4. places where prices stopped before and market temporarily reversed.
    5. Fibo projections 1, 1,38 from the last move.


I will try to test this strategy if I find time on Monday as I am at home.

  • #65
  • Aug 15, 2009 11:01am Aug 15, 2009 11:01am

  1. circle below: Mmap minus 70 (probably due to news) , we are waiting for upper Keltner.
  2. point of entry (probability 95% according to TopGuns) - confluence: price touches upper Keltner and also 38% retracement from the last move.
  3. first Fibo target (1.38) and probably stop hunting (large traders aim for stops accumulated under 95.00 level)
  4. previous day low (act as a resistance and a strong MMap – second point of entry. Crossing previous day low and previous week low is considered as a strong bearish signal.
  5. Entry – price touches upper Keltner after minus 40 on MMap below.
  6. divergence and a double bottom – long with a chance for at last 10 pips.
  7. confluence (circle) round number 95.00 and a Fibo extension for an upward move.


Combo below in the form of a histogram could be a sum of two "strengths"(with appropriate signs) divided by two. It would be interesting to have such a tool below the main window.

They use combo (60) as a main tool for asessment of strength.
Combo (720) is a secondary tool - "strength inTF H12.

I don't understand why they use TF H1 and H12 as main tools for asessing strength.

"Bare bones" of this strategy would be choosing a best pair (according to RS) and then scalp along the Keltner channel in the direction of the trend (RS).

Attached Image (click to enlarge)
Click to Enlarge Name: RS by TopGun.JPG Size: 95 KB
  • #66
  • Aug 17, 2009 3:15am Aug 17, 2009 3:15am
pj9100, institute,
thanks for sharing your insights.
  • #67
  • Edited 7:31am Aug 17, 2009 6:32am | Edited 7:31am
Quoting supremeChaos
pj9100, institute,
thanks for sharing your insights.
Thank you for your kind and encouraging words

Today I tested RS.

1. I decided to enter the market at 9.35 local time (red vertical line). At this moment weakest - NZD, strongest - USD. I looked at RS - TF H1 and M30.

Also good candidates: strong (USD, JPY) and weak (NZD, AUD, GBP).

2. Look at attached image - G/J Keltner with original TopGun parameters.

Although I didnt take every trade ( I took two - one BE one 19 pips which is good) this strategy looks promising - at least to study it further.

Minus; NZD/USD is a wide-spread pair (6 pips) and this is a problem.

In case when market goes against us TG applies averaging ("scaling in") which means martingale - doubling position every 10-15 pips.

When we have wide spreads costs of scalping are huge and strategy becomes more risky.

AT least for today - this strategy looks very good.

Today's moves G/J (on this pair this strategy works best at the moment): 60, 15, 30, 30 pips. Not bad.
Attached Image (click to enlarge)
Click to Enlarge Name: RS Keltner scalping 17 aug 2009.JPG Size: 172 KB
  • #68
  • Aug 18, 2009 3:52pm Aug 18, 2009 3:52pm
Quoting institute
I studied TopGun software and their systems.......
Thanks very much for all of this info. I haven't used TopGun, so I can't comment on your findings. I did watch some of their videos, but that was several months ago.

Quote
Is it possible to prepare a graph for example RS M15 during 4-5 days? It would help in analysis of pairs behavior.
Yes, you could set the RS parameters as follows:
TimeFrames = M15;
NumPoints = 450;

Quote
This last situation we can filter out by temporarily excluding the AUDJPY from RS (I’m not sure if I am right).
In this case I wasn't singling out AUDJPY specifically, just using it as an example. What I was trying to say was that if the srength of currency XXX is rising, and YYY is falling, both in the longer term timeframe, then a temporary fall in XXX often coincides with a rise in YYY; the overall result is a pullback in the XXXYYY chart.

This often happens across the board, e.g. if NZD and AUD are correlated, then their strength occasionally both rises and falls in unison. Then if USD and JPY are falling while NZD and AUD are rising, then we can get a temporary pullback across the board, while USD and JPY rise, and AUD and NZD fall.

Quote
In case when market goes against us TG applies averaging ("scaling in") which means martingale - doubling position every 10-15 pips.
I would be very careful about scaling in without some kind of limit. IMO prudent trading involves placing approximately equal amounts at risk across several different situations. Scaling in could ultimately involve placing a very large percent of one's account on a single situation, if price moves against the entry for long enough. It is the trading equivalent of risking one's entire bankroll on a single roll of the dice. Increasing bet size (e.g. Martingale) increases risk this risk further, exponentially.

Thanks again for posting all of your research.

David
  • #69
  • Sep 8, 2009 8:21am Sep 8, 2009 8:21am
Im using MIG MT4 and I can't even get the indicator to pop up on the, "custom indicator" list. I think i have done everything in order and I really want to try out this indicator, but I'm not that savvy with all this stuff. Any help would be appreciated, thx

Quoting hanover
I just created a demo account with IBFX - see the result below.

Two possible causes:

1. Lack of data. Solution: you need to go to each pair (and then to each timeframe), and press the PageUp key a few times, to load data for every pair/timeframe, from IBFX's server(s). The indicator can only plot whatever data is available. Incomplete or inaccurate data is reflected in the plots. I can not stress this highly enough. You can press F2 to load MT4's history center, and check what data is available for each pair/timeframe.

2. If you type a single...
  • #70
  • Edited 3:23pm Sep 10, 2009 10:32am | Edited 3:23pm
Hanover, I like the indicator.

I noticed that someone mentioned about mini accounts etc. This always seems to come up. I use the following code to get around the issue of different broker symbols. i put this in the init function.

Inserted Code
//------------------------------------------------------------
//  Determine if symbol has a suffix and use it
//------------------------------------------------------------
  
    Suffix_Size = StringLen(Symbol()) - 6;
    Sym_Suffix = StringSubstr(Symbol(),6,Suffix_Size);

//------------------------------------------------------------
Usage then would be like this in the indicator.

Inserted Code
 MarketInfo("NZDUSD"+Sym_Suffix,MODE_BID);
This way I don't have to prompt for suffix and they don't have to worry about it. And if there is no suffix then it is just an empty string.



I am interested in how you tell the indicator to only take values every XX minutes. I have one indicator that takes values every tick -- which i prefer it did not due to memory issues.

Any suggestions would be appreciated.


EDIT: Can I use if(MathMod(TimeMinute(TimeCurrent()),5) == 0) before my for loop and that way the for loop is executed every 5 minutes???
  • #71
  • Sep 10, 2009 7:27pm Sep 10, 2009 7:27pm
Quoting Tropsmoo
Im using MIG MT4 and I can't even get the indicator to pop up on the, "custom indicator" list. I think i have done everything in order and I really want to try out this indicator, but I'm not that savvy with all this stuff. Any help would be appreciated, thx
Not sure why. All indicators copied into /experts/indicators folder should show in MT4 Navigator's "Custom Indicator" dropdown, provided that you exit & restart MT4 after doing the copy, to refresh the list.
  • #72
  • Sep 10, 2009 7:38pm Sep 10, 2009 7:38pm
Quoting flyer415
Hanover,...
You need to setup the ccy pairs that are being offered by your broker, in the parameter file, before you can use the indy. A once only setup task. Example:
C1_Pairs_Wgts = "AUDUSDm,100, AUDCADm,100, AUDCHFm,100, AUDJPYm,100, AUDNZDm,100, EURAUDm,100, GBPAUDm,100";

See post #1 for more info.

Refresh code is as follows:
Inserted Code
extern int        RefreshEveryXMins      = 1;

datetime prev_time;



int init()  {
  if (RefreshEveryXMins > 240)                             RefreshEveryXMins = 240;
  if (RefreshEveryXMins > 60 && RefreshEveryXMins < 240)   RefreshEveryXMins = 60;
  if (RefreshEveryXMins > 30 && RefreshEveryXMins < 60)    RefreshEveryXMins = 30;
  if (RefreshEveryXMins > 15 && RefreshEveryXMins < 30)    RefreshEveryXMins = 15;
  if (RefreshEveryXMins > 5  && RefreshEveryXMins < 15)    RefreshEveryXMins = 5;
  if (RefreshEveryXMins > 1  && RefreshEveryXMins < 5)     RefreshEveryXMins = 1;

  prev_time = -9999;
  
  


int start() {
  if (RefreshEveryXMins == 0) {
    DeleteObjects();
    PlotObjects();    
  }
  else {
    if(prev_time != iTime(Symbol(),RefreshEveryXMins,0))  {
      DeleteObjects();
      PlotObjects();    
      prev_time = iTime(Symbol(),RefreshEveryXMins,0);
  } }      
  return(0);
}
  • #73
  • Sep 10, 2009 7:56pm Sep 10, 2009 7:56pm
Hanover, thanks very much for the refresh code. Makes total sense, off course.

The indy was set up correctly for me. I was merely responding to something I read earlier in the thread.
  • #74
  • Sep 11, 2009 6:49am Sep 11, 2009 6:49am
Hi Hanover, I love your work, starting to try making good sense out of it !
My problem, whenever I change settings in the Presets---Recent Strength.txt file, these changes will not be accounted for when I start MT4 again, or when I reload the indicator
I am probably doing something wrong somewhere, but any clues from you ?
many thanks again
Cris
Chance favors the prepared mind (Louis Pasteur)
  • #75
  • Sep 11, 2009 2:34pm Sep 11, 2009 2:34pm
Quoting Bluejay
My problem, whenever I change settings in the Presets---Recent Strength.txt file, these changes will not be accounted for when I start MT4 again, or when I reload the indicator
The file name must be exactly "Presets---Recent Strength.TXT" and it must reside in the ...../experts/files folder, otherwise the file won't be recognized. Then the entry in the ParameterFile setting (see image below) should be either TXT or left empty.

(Note: advanced users can use different extensions as explained in post #48 above).

Also, there's no need to restart MT4 after you've made a change. Don't forget to re-save the file after the change (of course!), and then tab back to MT4. Then you can 'refresh' the indicator by doing any one of:
(1) switching between timeframes; or
(2) editing the indicator (press Ctrl-I, then double click on the Recent Strength indy, then click OK etc); or
(3) deleting the indicator, and then reattaching it; or
(4) pressing ENTER, typing in a different symbol/period, and pressing ENTER again.

The above works OK on my computer.
Attached Image
  • #76
  • Sep 12, 2009 5:42am Sep 12, 2009 5:42am
Thanks a lot for your precisions, it just works fine now !
your work looks just amazing.
Cris
Chance favors the prepared mind (Louis Pasteur)
  • #77
  • Sep 15, 2009 8:03am Sep 15, 2009 8:03am
Sorry, if this has been asked before but why does the indicator look like this on my IBFXm chart?
Attached Image
24 hours in a day – 24 bottles of beer in a case – Coincidence? I think not
  • #78
  • Sep 15, 2009 9:01am Sep 15, 2009 9:01am
Quoting matrixebiz
Sorry, if this has been asked before but why does the indicator look like this on my IBFXm chart?
You need to set up the parameter file before you can use the indicator. See posts #72, #75.
  • #79
  • Sep 15, 2009 1:18pm Sep 15, 2009 1:18pm
Ok, thank you
24 hours in a day – 24 bottles of beer in a case – Coincidence? I think not
  • #80
  • Edited 2:52pm Sep 15, 2009 2:00pm | Edited 2:52pm
Does it work ok with IBFX mini accounts?

The indicator plots on my other broker but not using IBFX mini. Currencies have prefixes like EURUSDm. Is this ok?

Also, how many periods ago (NumPoints) do you find to be most successful? 15, 25, 100...

I have an EA that I might be able to adapt to use this indicator but was wondering if the currency listing directly relates to the buffer info? (See pic)
Attached Image (click to enlarge)
Click to Enlarge Name: buffer.JPG Size: 39 KB
24 hours in a day – 24 bottles of beer in a case – Coincidence? I think not
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