MTF Alerter and ChartDisplay thoughts!

I created this thread so that we do not spoil the other journal of pmullin86: http://www.forexfactory.com/showthread.php?t=283291

For different reasons I did some rethinking on the MTF indicators on charts with lower period (only reason to have them in the first place)

Here are just a collection of some thoughts I went through (maybe it stimulates also someone else’s mind so I thought to post it)
This is not a full explanation but just short points of thoughts with a number of pics.

Main Chart: M5 (MTF indi and Chart Period the same)
MTF_Chart: M1 (MTF indi Timeframe: M5 on Lower M1 Chart)

I will be looking at the area between the 2 yellow lines. (5 M5 bars)

FIRST:
I go through the candles as we sometimes do for scrolling through past data: look at the last one. Orig M5 inid Chart


VLine: M5 UP candles Red, DOWN candles Blue

Think: which of the 4 indis looks right to a stoch trader - the end of the Chart?

?

VLine: M5 UP candles Red, DOWN candles Blue

Think: which of the 4 indis looks right to a stoch trader - the end of the Chart?

?

VLine: M5 UP candles Red, DOWN candles Blue

Think: which of the 4 indis looks right to a stoch trader - the end of the Chart?

?

VLine: M5 UP candles Red, DOWN candles Blue

Think: which of the 4 indis looks right to a stoch trader - the end of the Chart?

?

VLine: M5 UP candles Red, DOWN candles Blue

Think: which of the 4 indis looks right to a stoch trader - the end of the Chart?

?

VLine: M5 UP candles Red, DOWN candles Blue

Think: which of the 4 indis looks right to a stoch trader - the end of the Chart?

?

That's the whole area.

Think: which of the 4 indis looks right to a stoch trader - the end of the Chart?

?

Answer is most probably: the GREEN once.


BTW: Very typical fast down move (about 25 pips STOCH 14,3,3 from overbought nearly to oversold level.)

Looking now at the MTF-Display (indi TimeFrame M5 -> Chart M1)

I have added the M5 candle as over-layer with the attached inid.

M5 UP candles Red, DOWN candles Blue

Think: which of the 4 indis looks right to a stoch trader - the end of the Chart?

?

M5 UP candles Red, DOWN candles Blue

Think: which of the 4 indis looks right to a stoch trader - the end of the Chart?

?

M5 UP candles Red, DOWN candles Blue

Think: which of the 4 indis looks right to a stoch trader - the end of the Chart?

?

M5 UP candles Red, DOWN candles Blue

Think: which of the 4 indis looks right to a stoch trader - the end of the Chart?

?

M5 UP candles Red, DOWN candles Blue

Think: which of the 4 indis looks right to a stoch trader - the end of the Chart?

?

OK: Now we have finished the First M5 candle.

Think: which of the 4 indis looks right to a natural mind?

?

GREEN ?

DarkViolet ??



We see before the last M5 candle 3 preceding UP Red M5 candles. So we ended on a total of at least 4 M5 UP Candles.

In fact we have a total of 5 consecutive M5 RED candles UP!!

Think: which of the 4 indis looks right to a natural mind? ( natural mind: maybe imagine showing the pic to a small child)

?

GREEN ?

DarkViolet ??

NOW Think:

if you where trading LIVE ACTION TIME and the current time is the end of the chart:

Which info would you look at?

?

For the next purpose I removed the M5 overlay Candles and the VLines to focus better what one would see in live action trading.


look where the INDI 2 (Green 5,3,1) already is. Do you think if that is a live action time it would be there?

if not: why do we want it for past data there?

For what do we traders usually use ChartsPastData

Isn't it that we use them most of the time:

1. have a visible record of general Past development

2. to scroll through and look what kind of OverallChartSituation( 'setup') has produces which result.
If similar OverallChartSituation repeatedly produce closely same results - we hope to trade such OverallChartSituation in the future: projecting ( probably hopefully expecting ) similar results.

3. to examine the Current situation ( most often with Point 2 in mind)


In general we use ChartsPastData in similar fashion: no matter if one uses many indicator, no indicators. Traders who emphasis Fundamentals over TA probably use ChartsPastData mainly for Point 1)

Below is once more the pic with the MTF M5 candle closed on a M1 chart.

Obviously the DarkViolet Stoch does also not represent Past data 'as they where' but redraws them as a candle finishes.

(Otherwise we would not have a straight line for each M5 bar)

1.
Personally I feel quite fine
to look at ChartsPastData LINES at the current TimeFrame like the pic below and

interpret the GREEN STO down at candle End Time.

2. PIC above: But in a MTF - LINE display I feel that I need to twist my mind: looking at the pic it comes not naturally that the Green STO is pointing down (even though I know why)

I feel that the DarkViolet represents more closely what I would be looking for having point 2 and 3 in mind of of two posts ago:Purpose of ChartsPastData