GBPJPY Daily Volatility Trade

Hi everybody.

I've been trying to make this indicator for a few days now but am having some difficulty spotting my error(s).


This is not an indicator for generating live signals but a way for me to view my strategy's success rate over time. Here's the idea behind the indicator:

GBPJPY moves A LOT! I believe that if a daily GBPJPY candle closes bullish (large or small body, preferably large) and there is significant enough range that day (high-low), then no matter what's going on with any trends or really any other technical data, traders in either Tokyo or London will attempt to continue the previous day's movement on the new daily bar at least one time. Because there are so many traders trading the pair and the ranges are so large, there is a better than 50% chance that the pair will continue at least 15 or 20 pips in the direction of the previous daily candle's body.

At one point, I won over 20 trades in a row just eyeballing the daily candles and placing a single position on market open in Sydney on the new daily candle. This is not going to net TONS of pips, but it can be consistent gain. And I don't know anyone who would turn down a consistent 20-60 pips a week. In my experience, the worst thing that can happen is that the initial continuation movement retraces and turns around, forming a wick on the new daily candle. But if you keep your target small enough (10 pips, 15 pips, not counting the spread), then you should be out of the market and pretty much done with GJ for that day (in my opinion!).

So this indicator is an attempt to optimize that very basic strategy and exploit the fact that the higher volatility on GJ translates into a certain amount of price movement in the direction of the previous day's candle just as the status quo. My personal opinion is that GJ (and even some other pairs) will always range a certain amount (wicks) in both directions if the previous day's range is high enough. But there is a significant percent chance (much greater than 50%, imo) that the price will generate a wick (if not continue much farther) in the same direction as the body of the previous day's candle. As with any other short term trade, this is not absolute and you have to be conscious of news events and other possible influences. But that's the basic idea.

In this indicator, I have 3 variables-- the bulk amount of daily candles in the past you wish to test with your personal parameters, the desired daily range you want to see on the previous candle in order to justify taking a volatility trade in the first place, as well as the actual target amount of pips you expect the new daily candle to move when it attempts to continue the previous day's movement.

I'm not a programmer and my only experience programming is from taking other indicators apart and trying to build my own.

If anyone could take a look at this and help me figure out how to get it to work correctly, I would be immensely thankful. I've commented in the code itself to hopefully make it as easy as possible for others to understand. It should generate a dot on a daily candle if the previous day's movement was large enough and the price continued to the specified target on the new candle. Right now it's drawing the dots on every candle and seems to ignore the DesiredPreviousRange parameter.

Thank you again and good luck in your trading.

R

I'll take a look at it

for me it seems to work fine.

What is val3buffer supposed to do?

Is this picture correct? How many digits does your broker use?

Change the pip values to 500 instead of 50

Well that's a pleasant surprise. Last thing I expected was for it to work correctly

My broker uses 3 and 5 decimal places as opposed to the normal 2 and 4. Let me create one version of it for pairs with 3 places and one for the pairs with 5 and see if that works.

You made my day. Thanks for checking it out.

R

Hmm... I can't seem to get it to work. I tried using .001 as the value for Point but it doesn't seem to work. It's doing the same thing and just drawing the dots at each bar.

Any other ideas?

Kilian, I misread your reply. It works fine when changing the pip values by a factor of 10.

Thank you again for taking a look. Chalk it up to my own idiocy, as usual.

R

I was going to add my 2 cents but I see you got it working.
It was drawing dots on all bars

I have added 5 decimal compatibility and input for dots location

I created a little script

You guys are AWESOME. Thank you so much, to both of you.

Best of luck. Hopefully you guys can experiment and use this as well!

I edited my past post please take a look at it.

I also have a few questions about your SL. You might win a lot of those trades but what happens if your TP is not hit? The looser will be big

Have you tried this on other pairs?

Kilian, regarding the SL, it's up to you. As I said, there are no absolutes with this or any other short term system. I will most likely trade this with less risk and only trade it when there is a strong(er) daily candle body. Also rather than using a hard stop loss, I'll estimate a time, a duration, for which I will hold the trade. If it does not produce inside that window, I will close the trade. By plotting the nearest support and resistance lines, I'll either take profit, B/E or close out if the Asian session does not hit TP and the London session starts to show signs of negative power.

Cyber, I have not tried it on other pairs yet, but I certainly will now that I have this working. Again, it will probably be used with lower-than-average position sizes and only when there is a significant body size.

What's the easiest way to specify the day of the week? I'm trying to get it to ignore Sundays, Mondays and perhaps even Tuesdays.

I'm trying to use another if loop with:

(DayOfWeek()==2 || DayOfWeek()==3 || DayOfWeek()==4 || DayOfWeek()==5)

but it's saying the if statement is too complex. I think it has something to do with it being inside another if loop so i'm not sure how else to do it.

Thanks in advance.

Sorry to bump this, but does anyone have any idea how to specify only certain days on this? I'd like it to just completely ignore Sundays and Mondays.

TIA

Use something like this. List conditions as needed


then call like so:

if(Tradetime()==1)