Anyone who followed my previous thread where i constructed a gambling system: http://www.forexfactory.com/showthread.php?t=467309 Should know that i mostly design systems, and indicators, i also trade manually but i dont like it, i`m more into mechanical trading since i dont trust in the human nature of emotions and hesitation while trading. So based on that indicator there, the APROXIMATOR V1.0.mq4 I was working on a better version of it, and a much simplier one, combining elements with the one Holy Grail indicator of mine which was used by eitan1010 in his thread Eitan's Project. It was a succesful aproach, so its time to update the indicator. Maybe today, but probably tomorrow, i will upload here the new version of the indicator which i`ve been working on as a side project since the last week.And let's see how well it will work in the market.
The indicator is very simple to use:
-Green Thumbs Up = BUY
-Red Thumbs Down = SELL
Parameters:
DISTANCE = the distance factor between signals, the higher this value is the more accurate the signals, but the less of them will be
FACTOR= the calculation factor of the indicator, its complicated so better leave it at default value, but you can adjust it to the instrument if you want
MAXBARS_COUNTED= how many signals are visible on the chart, this doesnt affect in any way the signal of the indicator, it only sets the maximum number of bars where the signals will be visible, better to leave it as default, unless you want to manually backtest the indicator
MT4_ALERT =on/off the MT4 alert feature if a new signal appears
EMAIL_NOTIFICATION=on/off to send an e-mail if a new signal appears (note: you must configure this in MT4 first)
SMS_NOTIFICATION=on/off to send an sms to your phone if a new signal appears (note: you must configure this in MT4 first)
The System
ITS STILL IN EXPERIMENTAL PHASE SO BETTER NOT TRADE IT ON LIVE ACCOUNT, ONLY DEMO ACCOUNT FOR NOW PLEASE!!!
Suggested timeframe: Higher than or equal to M15
Suggested pairs & time of day: Low spread pairs (E/U,G/U,E/C,U/J,A/U,N/U) and only in high liquidity so for E/U its between 8 AM to 16 PM GMT+0 or in other words between London Open & NY Close (if you dont know when that is go here http://www.forexfactory.com/index.php and scroll down to the bottom of the page)
Suggested parameters: Unless you are expert on optimization its better to leave it on default everything except the "DISTANCE" variable, this is at your own discretion, but on higher timeframes it can be lower or in lower timeframes it can be higher than default, but still you can set this as you see fit
Signal:
-Green Thumbs Up = BUY
-Red Thumbs Down = SELL
Lot size: No more risk than 2% of the account, from each stoploss!!!Max nr of trades open: No more than 3-4 active trades at a time, so total maximum risk at any given time can not be more than 8%
Stoploss & Takeprofit:
- The size of the stoploss is at your own discretion, usually its best to put below a previous Low, or above previous High depending on BUY/SELL, however the lot size must be configured accordingly, so max risk to be below 2%
- The takeprofit must be atleast 2x bigger than the SL and smaller than the 22-day average volatility,this is very important and its the key to the whole system, so atleast 2x bigger than the STOPLOSS but nominally less than the 30 day average volatility.
- The version 1.2 of the indicator also shows how much did the price move today, so you can compare today's price movement with the 30 and 5 day average, its logical that you have better odds of success if the price didnt moved today yet, than if it already moved today's average quota (it may reverse, but you can never know).So if you start trading at London Open, you trade until the price doesnt reach the daily average, and your TP on every trade should be less than it, after the price reached its daily quota, its recomended to stop trading for that day or on that pair.
Examples :
WRONG : SL 10 pips TP 5 pips
WRONG: SL 45 pips TP 44 pips
WRONG: SL 33 pips TP 65 pips
RIGHT : SL 10 PIPS TP 20 pips
RIGHT : SL 45 PIPS TP 90 pips
RIGHT : SL 33 pips TP 66 pips
WRONG: SL 33 pips TP 65 pips 30 DAY AVERAGE: 64
RIGHT : SL 10 pips TP 60 pips 30 DAY AVERAGE: 61
Lets recap what i just said:
- ONLY DEMO ACCOUNT TRADING ,UNTIL WE HAVE TESTED IT PROPERTY!
- Liquid pairs, small spread & only trading between London open & NY close
- Default parameters, or at lower timeframes higher DISTANCE, at higher timeframes lower DISTANCE
- Buy at Thumbs Up , Sell at Thumbs Down (above version 1.2 arrows above/below price will mark the signals)
- Max risk/ trade 2% of the account equity, maximum 4 trades open with total maximum risk of 8%
- Reward-risk ratio atleast 2:1 , while the TAKEPROFIT must be less than the past 22 day average volatility (or 5 day average volatility), the STOPLOSS size is discretionary also the risk cannot exceed 2% remember!
- Only trade until the daily price movement didnt reach the weekly or monthly average, after it moves that much, you should stop trading on that pair for that day!
Also just as a side note, make sure you have 22 days of data in your D1 timeframe so the indicator can calculate the 22 day average correctly!
Thats it, here is the indicator in its latest stable version, i await your feedback:
"There's a sucker born every minute" - P.T. Barnum
