There is a filter for ADX system which hugely improves its accuracy but decreases its RR ratio a little bit. Can you remember what was the first and most important thing that Mr. Alien advised to watch when we look at a chart?
Yes, the first thing was BB Squeeze. This simple tool has some rational technical analysis core points behind it:
1- When price is in range it may be in its accumulation, re accumulation, distribution, or redistribution phase so sooner or later it will explode
2- BB Squeeze can easily show us what the most recent S/R levels are.
3- sudden moves out of no where without range periods behind them are not reliable enough
This is how you filter your signals:
1- whenever the indicator gives you a signal you look at the left for BB squeeze.
2- If there were no BB squeezes on last ten bars you ignore the signal because it is probably too late.
3- If there were some BB squeezes on last 10 bars you plot the boundaries of the squeeze with horizontal lines (use most important highs and lows) then look for price to break one of these boundaries. If it breaks the boundaries to the direction of the signal you take the trade if not you ignore it.
4- If the signal bar itself was on a BB squeeze bar you do the same as number 3.
5- If the signal bar already has moved away from the boundaries of BB squeeze you should look at how far it moved. if it has moved more than 50% of the BB squeeze range it may be dangerous to enter.
I use BB Squeeze with 10 period because it is more sensitive.
This is just the beginning and I'm sure we can find a way to make this system very very accurate and profitable.
In this example as you see out of 11 signals 10 were false signals but using BB Squeeze we could filter out 100% of false signals.
Yes, the first thing was BB Squeeze. This simple tool has some rational technical analysis core points behind it:
1- When price is in range it may be in its accumulation, re accumulation, distribution, or redistribution phase so sooner or later it will explode
2- BB Squeeze can easily show us what the most recent S/R levels are.
3- sudden moves out of no where without range periods behind them are not reliable enough
This is how you filter your signals:
1- whenever the indicator gives you a signal you look at the left for BB squeeze.
2- If there were no BB squeezes on last ten bars you ignore the signal because it is probably too late.
3- If there were some BB squeezes on last 10 bars you plot the boundaries of the squeeze with horizontal lines (use most important highs and lows) then look for price to break one of these boundaries. If it breaks the boundaries to the direction of the signal you take the trade if not you ignore it.
4- If the signal bar itself was on a BB squeeze bar you do the same as number 3.
5- If the signal bar already has moved away from the boundaries of BB squeeze you should look at how far it moved. if it has moved more than 50% of the BB squeeze range it may be dangerous to enter.
I use BB Squeeze with 10 period because it is more sensitive.
This is just the beginning and I'm sure we can find a way to make this system very very accurate and profitable.
In this example as you see out of 11 signals 10 were false signals but using BB Squeeze we could filter out 100% of false signals.
