Stairstep trading using the SQ dynamic indicator

Hey Calstar, how are you mate?!

Calstar I have a quick question, what indicator are you using in the bars?! Thanks in advance for your help

Ok in case I didnt mention it but I thought I did. I am in the process of working towards full CTA licensure. My classes and studies take place on Wednesdays and Thursday's,

I am NOT abandoning the thread but can only devote so much time each week. I hope that is understandable.

I will post a weekly followup at the end of each week before the start of the new trading week and continue to post some trade setups each Monday and Tuesday. I thank everyone for their patience.

Now your questions

First the candles:

They are a commercial indicator that I purchased. I did not post them as an attachement because they are not mine to give away since they were not posted publicly in a forum for free use.


Now the recap and then how to use the filter for trading BO's

The march from 1-100. Week #1

There were a number of trades this week on all the major pairs. As you can see by the attached screen shot I left a few pips on the table. This actually works well because after you see how to use the filter you will understand why and hopefully will be able to incorporate the filter into your trading style.

I managed a gain of 97 pips on 10 trades. There were 2 losers and 1 break even the largest loser was -14 pips. For a winning percentage of 70%

The total balance of our $1000.00 account at full leverage is now $1097 at preferred $1048. We are just shy of a 5-10% gain in 1 week

So for this coming week you should be trading .11 per pip per thousand at full leverage or .055 at preferred.

Thats the recap please see the next post for trading examples from this week:

I will also cover the filter, how I use it to trade with the SQ indicator, the TPR indicator, as well as hand drawn CZ's.

Thanks

I have had a chance to read thru the thread an it seems disorganzied so I will start from the beginning. I have been meaning to get a PDF toghther but just have not had time.

The SQ indicator is well coded and can be useful for finding periods of consolidation. However not allCZ's zones are created equal some are better then others. I encourage you to look at the charts to see what I mean.

The settings I have been using are as follows:

EUR/USD, GBP/USD default settings and traded off a 5 minute chart.

AUD/USD, NZD/USD I change the the auto box range to false. I trade using Alpari,FXDD and Gain. I ahve not noticed a sizeable difference on any of the CZ's for any broker.

( note to moderators I am not trying to promote the brokers or spam I feel its important to post the setting and the results with various brokers If needed I will remove that reference)

I do not use the TP levels on the indicator. I also do not use the buffer as I have found it only takes pips off the table and the filter indicator is more effective.

I trade it off the 5 minute chart so I can enter earlier.

Trading the indi alone has proved to be a wash to a loss. Breakouts can often be false and in times of high volalitilty the whipsaws can create a sizable draw down please see the attached screen shot labeled draw down.

On the box pictured it totals -54 on 2 trades with a total draw down of -220 cumulative.

While the indi does a good job of finding CZ's and makes life easier for all of us, trading the break out alone hasnt produced a great result for me.

I am not saying it cant I am just saying that taking each breakout and reversing when the opposite break out happens doesnt work for my trading style and has proven to have some sizable drawdowns.

Adding the addtional filter and TPR indicators can greatly increase the results while helping to reduce the draw downs.

So thats teh SQ indi in a nutshell.

Now lets move on to the TPR

The TPR indicator resets each day at the start of the Asian session. The GMT of your broker will not change the results of the indicator and the time frame does not matter either.

Set up:

Change the colors to none. They plot the current session high/low and the previous days high/lows. I find that they just clutter the charts. I also turn off the comments, as per previous posts I dont subscribe to the 2-1 ratio rule.

The indicator will plot a buy line and a sell line. It will also plot 6 seperate suggested take profit levels. 3 for a buy and 3 for a sell.

The 3rd levels are rarely hit.

The area between the buy and the sell line is a chop zone when price is in this area trades should not be executed.

The rules of this indicator are simple. When price reaches a buy level go long, a sell level go short and close the positions at the desired target level. A stop loss is placed below/above the opposite line. If a short is taken then the stop goes above the buy line. If a long is taken the stop goes below the sell line.

This type of entry can have the same result as trading the SQ indicator box and can result in draw downs in a sideways market.

The TPR essentially marks projected support and resitance points for the given trading day. Each line acts accordingly. The buy level is support, the sell line resitance. The TPL above the buy line are resitance levels and the TPL below the sell line act as support.

When trading this indicator alone it is best to wait for a conformatin of the buy/sell lines as support or resitance. This can be done with a candle close above/below the line.

The indicator is also useful to find CZ's as price will often hesitate at the S/R marked by the indicator. Please see attached chart marked baby steps.

The indicator can be useful when trading CZ breakouts. For example in the attached chart you can see that a CZ formed at each of the TPL's. Each time a TPL formed and broke out it targeted the next level.

If you are using the TPR in conjunction with CZ's you would want to trade long on breaks to the top side and target the next TPL. If you went short you would target the previous line of support or resitance.

In the chart attached that would be the buy line or the previous TPL. When price reached the 3rd TPL a short would be preffered since that is considered the strongest level of resitance.

The Filter is an extremely helpful indicator. It can be traded by itself for scalping or longer term trades. It is useful in helping us stay out of the market. It is also helpful to predict the direction of a break out.

The indicator does lag slightly but I have found it is still very useful in tracking price action.


The settings:

Leave the settings at default change the colors as follows:

Blue, Red , Blue, red , Blue

If you prefer you can change the line thickness which will plot a line instead of dots I prefer dots which I will cover later.


Trading the Filter alone for scalping:

I have attached a 5 minute scalping chart.

A trade is taken in the direction of the breakout above or below the filter. If price is in the filter we dont trade (hence the no trade zone). If you cant see the candle you cant make an objective choice on direction so you dont trade.

The long entry is when price breaks above the filter.

The short is when price breaks below the filter.

The intial stop would be placed on the opposite side of the filter 5-10 pips away or above/below the last point of resitance/support.

As the filter widens its a sign that the move is gaining steam and we can start to tighten our stop. The trade can be exited 1 of 3 ways.

The first is an exit when price touches the filter again.

The second is a retrace into the filter itself.

The third is an exit when price passes thru the filter completely.

The third has a tendency to leave a great amount of pips on the table.

On the short chart attached there were 2 trades. The first on the breakout. The second when price exited the filter.

As you can see I took a trade on the exit from the filter.

This is a scalping method for trading the filter. Many traders want to scalp but dont have the discipline to take a small profit and walk away... or walk away when the market starts kicking their respective ass. Scalping does not mean we take the whole head off. We take a small portion off the top.

When I first started trading I wanted to scalp but was always ticked off when I closed for 10 or 15 pips and it went for a 100. So I chased pips and fought the market( greed kills). If you are going to scalp I would suggest that you remember that its small profits and that all you need is 17 pips a day to become a fulltime trader.

Set a limit for your losses and when you reach it stop trading.

Ok I think I will call it a night from here and continue tommorow thanks for reading

I have drawn a couple CZ's on the 5 minute AUD/USD chart. I will be continuing with teh filter posting tonight.

Still short AUD/USD

GBP/USD

below sell line breaking out and below filter

Long AUD/USD on the

1 a break out

2 above the buy line

3 filter positive

motive:

http://forexsystems.ru/rekomenduemye...onnect495.html

what indis do you use to filter trades? do you mind posting them please?

thanks,

Joan C.

Filters should not be.

Hello does anyone have the filter indicator that is posted above Calstar could you maybe repost it

Thanks

Hello,

I'm looking for this indicator as well. Could someone please share it with me?

Thank you!
UPDATE: I heard back from celstar. He is not looking to share the indicator at this time he said. Just thought I would update in case someone else is looking for it

There's them who love it when they can share their knowledge and hard work with others, and there's the ones who just take, take, take :-)

But it's okay, because I'm a firm believer in the old saying: what goes around, comes around.

Cheers for the info, Saver

Nice example of you 'filter' doing a good job. Could you also send in some pictures of it failing miserably? lol