Step indicators with moving horizontal stop line

I have been exploring indicators that make steps on the price chart. SO far, I have only found three that have potential. By themselves, two of them (stepChart and Non-lagMA) can look very interesting on the chart "until" you actually walk the chart and make the calculations. Then, what looked great to the eyes shows itself as a disaster zone. The third (HAS) can and does work but this method may enhance it greatly.
What makes the difference in using them, is "how" you manage the stops.

I have tried trend lines and gotten knocked out way too early

Tried moving the trend line stop from step to step (origin point not changing but slope end changes with each step)

Tried using filters but failed. (they all seem to agree in a way that doesn't help or just plain looked like spaghetti to me)

Then I tried something that almost seems absurd. Instead of using a trend line, I applied a horizontal stop line that would move. Suddenly, that which was a disaster waiting to happen, started to show a lot of potential. The method appears to have safety and the ability to capture the most it can without giving away more than necessary. The exit rules tend to keep you in the trade during wiggles.

The picture will explain it best. Though there is only one picture, I think you will get the idea of how to apply it to the other indicators.

I would ask, that we all be tolerant and considerate. We were all new at this at one time and asked some seemingly stupid questions. Let's make this thread welcome to all levels of knowledge. Sometimes, the best ideas come from looking at things in a strange way that may not seem logical at first.

It looks interesting.

Can you tell where did you find this indicator, and what's the philosophy behind?

Bye

BL

I don't remember where I got the indicators. Have had them a while. The basic idea behind this is that too often we get in trades and lose most of what we make. We take unnecessary risks. If we can use a method like this on something, (maybe what I have found is not even the best answer) then we get to keep more of the profit and insure losses are kept to a minimum. I don't know what else to tell you????

I had an EA made that is a movable horizontal stop line. It can work for manually trading systems that give steps to use as shown in the picture.

Step_MA-V6.1 also has some value being used this way. I'm still playing with it....trying to make stable and reliable rules.

Step_MA-V6.1 behaves, in my hands, like a Renko chart, making fixed-size bars whenever a certain round number level is reached. So: it's Renko trading, basically.

How do you obtain the variable-size bars on your chart?

Where do you found the H_Line_Exit EA? Your creature?

Where do the Non-Lag MA and smoothed HA come in? All those are very well known indicators, and I see the whole comes from Igorad's school on FX-TSD...

I agree with you that finding good exits, especially in automated trading, is more difficult than good entries.

Bye

BL

Looking at the chart shown above, at what point should someone make an entry and exit.

I have just started looking at Renko but have not yet found the indicators. If you have the setup that will paint the chart so I could play with it, please post it.


I just did some walking the chart on M5 with the Step_MA_v6.1. I looked at 17 trades in a row. The results were interesting. By NOT using a horizontal exit (just trading the colors) after losses, it only made 96.4 pips. When I applied the rule of using the moving horizontal stop (with a zero tolerance) the same trades made 399.5 pips after losses. Losses were reduced by about 52% using the stop. Profit was 4 times higher.

The setting is in the attached template file. Chart was walked starting 10-4-2012 21:00 to 10-10-2012 04:15.

How do you obtain the variable-size bars on your chart?
The variables are just where I decided that it looked good to my eyes. Nothing really scientific there! There can easily be better settings but this is good for a starting point. After all the garbage I have read about backtesting results, I do not trust them at all. So long as the indicator does not repaint once a bar is closed, walking the chart will give me a fairly accurate idea of how things will actually go.

Where do you found the H_Line_Exit EA? Your creature?
The Horizontal exit line EA is something I paid to have written so I can manually test the idea live. I also paid to have 3 other variations made but they were based on a trendline, not horizontal and were programmed to use StepChart. I image it would not be too hard to change one of them to use the horizontal line instead. I also have another EA built only with a trend line you add to a chart. It is basically a "follow the run till it breaks the line"... kind of thing.

Where do the Non-Lag MA and smoothed HA come in? All those are very well known indicators, and I see the whole comes from Igorad's school on FX-TSD...
These indicators are just others that have the potential to be used by the horizontal stop method. I figure anything that makes steps has a potential that can be looked at. Renko (from the pictures I have seen, may also have this potential. I just don't have a copy of it yet. StepChart may have come from the Elite section on FX-TSD. I subscribed for a little while.

Making rules is a challenge since the chart can throw things out there that leave me saying...."what the heck is this ..... and where did it come from?" In trying to define rules, I look for things that defy my current rules, then see if I can find a solution to them that adds to the system. I have to constantly remind myself, that the market is emotion not science. If it were science, we could all be rich in 30 days!

Entry for now, is when the color changes. Exit is defined by moving horizontal stop line. See picture in first post to see how it is set up.

Can you PLEASE show just a single day walkthrough on the m5. i have a basic understanding, but i think a simple chart walkthrough with sl, tp, reentries, etc would answer all my questions.

Thank you!

Thank you for this indicator (StepChart). I tried to combine it with 4 hour Pivot Point. I have a good entry and trailing stops. I also observed that the step size is actually number of pips you would like the step to change. Picture attached to show my trading set up. Any comment?

I am not sold on any particular indicator. Each one has it's good points and bad points. Each one requires rules specific to that indicator and setting. The idea here is to see if we can use a horizontal stop line, combined with something that produces steps and in that process, find a safer, more profitable way to trade. The best indicator may be the one I have not tried yet. You may know one that will fit better with the concept.

I know StepChart and Step_MA have issues! I'm trying to find rules and settings that work well consistently. I have not achieved it yet. I posted this idea because I see potential. I don't have all the answers! This is not a commercial-ready-to-go system. It's an idea to build off of and see if it can become something good. Potential is there! The RULES you are asking about are changing as I discover what works and what doesn't. Yes, I can see places that I have not thought it out well enough. I'm trying to figure them out.

It looks like using Step_MA, you need to allow some play in the stop line. 5 pips seems to be a good number on the M5 chart. You will still get stopped out of trades because the variance is too big.

Idea may benefit from a rule that says stop line does not move unless the move is greater than X pips.

In example A, everything appears to work perfectly. In example B, you can see where we had problems.

In example C, the stop line had 10 pips of play, not 5. You would have remained in the trade. It was still valid when the market closed.

A wider stop is a twin-edged sword. It can carry you through wiggles for a longer run or crash and burn with a bigger loss! There is plus and minus to every adjustment and rule.

Could you take the picture up a step in size. These old eyes are having trouble getting the detail.

A different indicator used. Stop line play is 10. Results are the same!

This is using Step chart with setting of box 15. Notice how trade was not closed when color changed. The stop line had NOT been violated so you keep going. You can see that each indicator has potential. When it works, it nice. When it doesn't, it can be a real loser. Though it can look good, I'm not sold on using it.

If you use a Stochastic or something like it to filter "When" to enter, it can make a world of difference to where your entry point is. If a trade goes well, you pick up more pips. If it goes bad, you have reduced your potential loss.

Setting is just default. Play with it. Also consider using another indicator that works like this. Suggest one if you know of one.

Hi Gbadegesin please mind sharing your step indicators and template?.Rgds