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HAC & RAC - A Simple-Minded Approach

  • #241
  • Mar 7, 2016 8:01am Mar 7, 2016 8:01am
Quoting Timo7
Welcome back Almuten! Question is, how would you know that the green HAC will hold and not be revisited? What about when the price is ranging and crossing the HACS back and forth, how would you know when the price will take off? Because I tend to keep an eye on only a few markets, and ranging happens a lot, but then the price just takes off, and I miss it!
Hi Timo,

The short answer: Nothing is ever certain.

The long answer would be to look to the lower TFs and see how they're faring. For instance, when the M1 triggered, how many periods until the M5 triggered? Then how many periods before the M15? Next, is the green HAC on the H1 very close in price to the red on M15? If it's close or right on it, there will be H1 support/involvement. Same for the H1 red - how close is the H4 green? If it's close, then there will be H4 involvement and so on.

So let's say that you're interested in trading an H1 and the green line has just been crossed or is in the process of crossing. Look to the lower TFs and see what's going on. If it all looks good and tight and the M15 has plenty of room to 3x, the chances of H1 taking off sharply is very great - especially if the RAC is confirming or will realistically confirm it in the near future. If it's buried one way or the other (like flat above 90 or below 10), then it's likely going to come back on you. But I think this would be rare if the lower TFs are showing strong movement and the HAC lines are lined up from one TF to another.

The H1 red gets crossed an average of 11 times per month across all markets. Not all of them are great moves (obviously), but most of the bad ones can get filtered out by looking at the factors mentioned above.

Many pairs trigger together or very close together as well. Generally there will be a leader among them and often they make identical patterns in the indicators. The HAC lines will make the same shapes and so on. This can be useful as well because when major currency rotations occur, there's less chance of them jacking around.
  • #242
  • Mar 7, 2016 9:53am Mar 7, 2016 9:53am
I'm giving the daily timeframe a go, lets see if it takes off.

Attached Image (click to enlarge)
Click to Enlarge Name: hacnrac eurgbp.JPG Size: 115 KB
  • #243
  • Mar 7, 2016 12:57pm Mar 7, 2016 12:57pm
Quoting Timo7
I'm giving the daily timeframe a go, lets see if it takes off. {image}
Hi Timo,

I would advise you on a couple of things with this pair because although it could work out, trading D1 might be a rocky road.

The first chart below is an H1. It has hit a 4x profit level and lots of times markets have to have a retracement afterwards. It sort of has already so that might be ok.

The next chart is a W1. On that chart the RAC is very strong still. Even the RSI is against the ceiling. Plus the green HAC on W1 is a long ways from being matched up with the red on D1. This generally means that the market will futz around until the longer TF catches up.

If the trade does go in your favor, it will probably stop at the green HAC line or near it on the W1 chart. This also matches the 4x level from the H4 chart (I put those on the W1 chart for convenience) - but be mindful of the 3x on H4 because on average, the market will stop and reverse in those places. I would not use a D1 profit target because it will take the W1 to be in alignment with it in order to get it past 1x or 2x. Use instead the H4 levels because the D1 green matched the H4 red pretty closely.

On the D1, the RAC broke below 80 but the market was not touching the red HAC line at the time, which is an argument for a revisitation toward the original break area prior to moving down further. [edit] I guess this one is iffy...but one good thing is that when the green HAC was penetrated, the RSI shot down. This is generally a very good sign that the cross on the red HAC will produce something.

If the market is in just a pullback mode prior to the resumption of an upward move, the M15-M1 will tip you off. If those TFs align and go long, then I would get out because it will indicate further upside - perhaps much further.
Attached Image (click to enlarge)
Click to Enlarge Name: EURGBP 3-7a.PNG Size: 117 KB
  • #244
  • Mar 8, 2016 1:43am Mar 8, 2016 1:43am
Quoting Go5
{quote} It definitely seems to me that there are a lot of (uncovered?) posibilities with what you so kindly offered here - unique stuff! I hope to find some step-wise approach so I can trade this. I need a "structure" of some kind. After all, if we can get some nice statistics trading only a 2:1 ratio - that's all we need, isn't it? Maybe even adding some other "cycle" system like Brooky's KST, who knows, I am looking at that. Wish you a nice retreat - time!
I too am working on some kind of 'step-wise' approach, like a screener of some sort. I'm currently tracking about 12 markets and I think (or would like to think) that the highest probability ones can be ferreted out. I did do something like that last year with Forexalien's method in that I had about 22 different variables I weighed over 3 different TFs. Bullish vs bearish factors were calculated and then I looked for the top 5 out of 21 markets that showed strongest biases either way...but it was exhausting! It worked pretty well though.

Anyway, I'm working on the D1 chart to start out with and am working on weighing the RAC lines first - both the green shorty and the regular one. The pitch, changes in pitch, level position and spread between them and their averages are being evaluated. But this is the momentum component only.

The next phase will be the HAC lines - whether or not the price is touching them, are they moving further away or closer together, etc...

If I come up with something fruitful I'll post it here, but it will be in Excel. I'm not skilled enough to program anything too sophisticated.
  • #245
  • Mar 8, 2016 8:47am Mar 8, 2016 8:47am
HAC Open Code

I think I might have an idea to help know how many TFs are involved with a given pair. This might be very useful because as we've seen before, markets don't generally turn hard one way or the other until the HAC lines on the longer TFs come into contact with the HAC lines on the shorter. Even on an M1 chart that's racing to the moon will sit and wait for the M5 to catch up before making a sizable retrace.

I had FerruFX program my indys, but I did manage to do one of them myself (I checked it with his work to be sure it matched and it does perfectly). I can hardly believe I pulled it off. Anyway, if I offer it here, my hope is that somebody might create some kind of comparison indy - like comparing the green H4 to the red H1, etc....

This indicator also has the capability of plotting in the future by at least a few bars because it's calculated with displaced moving averages, but I don't know how to get it to take the values that I know exist and get them to plot ahead. It should be capable though (see post #2). It's useful to know when the green HAC on, say, H4 will intersect the red on H1. Changes in trend often occur when this happens, especially after an extended run. At any rate, it's good to know the future just a little bit.

Anyway, if anybody wants to take a stab at this, have at it!
Attached File(s)
File Type: mq4 ###HAC.mq4   2 KB | 352 downloads
  • #246
  • Mar 8, 2016 1:17pm Mar 8, 2016 1:17pm
Thanks Almuten, I'm not a coder but would hope to be. I learnt machine language in college, but thats about all.

Any way, what does the Alpha 0.07 mean. I think I know what the multiplier does, but why do you have it at 0.382? I would have thought it would be 0.250, for the lower time frame. I tried putting a higher time frame HAC line on also, but I'm not sure if it actually helps.

May be wait until all three lines come together and price crosses them at the same time like in the screen shot. But that doesn't happen very often so cleanly!

Attached Image (click to enlarge)
Click to Enlarge Name: 3 hac lines.JPG Size: 109 KB
  • #247
  • Mar 8, 2016 10:20pm Mar 8, 2016 10:20pm
Quoting Timo7
Thanks Almuten, I'm not a coder but would hope to be. I learnt machine language in college, but thats about all. Any way, what does the Alpha 0.07 mean. I think I know what the multiplier does, but why do you have it at 0.382? I would have thought it would be 0.250, for the lower time frame. I tried putting a higher time frame HAC line on also, but I'm not sure if it actually helps. May be wait until all three lines come together and price crosses them at the same time like in the screen shot. But that doesn't happen very often so cleanly! {image}...
Hey Timo,

The alpha, if I remember right, shortens or lengthens the cycle. Mathematically, what happens is that Elher's formula makes a 'circle'. The alpha, I believe, is a smoothing function that makes the circle bigger or smaller. Elhers leaves the alpha at .07 so that's what I do. Anyway, the circle is then cut in half, which is the cycle length. I'm not 100% certain about all this because it's been a few years since I've studied his material, but I think that's the gist of it. You can play around with it and see if it helps to adjust anything.

With regard to the .382 instead of .25, I put it there because .25 can be too short and the indy gets pretty wonky if the cycle is too short. What it's doing is taking the cycle period length, whatever it is, and then taking 38% of it. It happens to mimic the next lower TF red HAC pretty well when things are getting ready to turn.

And this doesn't need to be exact to be useful. The main issue is to make sure that the longer TF is within range to participate in a reversal formation.

Btw, can you share what you made? I'm curious how you did that!
  • #248
  • Mar 9, 2016 9:22am Mar 9, 2016 9:22am
Thanks Almuten for those explanations, all I did was try to put the next higher TF HAC on screen, but back testing and looking at different markets I don't think it is that useful.

Probably the most useful thing I have found is just to scan the markets on the 4H TF, and see if any one is crossing the green and red HAC roughly about the same time, and then check the 1H, and 15M to see if the same thing is happening. What do you think?
  • #249
  • Mar 10, 2016 9:46pm Mar 10, 2016 9:46pm
Quoting Timo7
Thanks Almuten for those explanations, all I did was try to put the next higher TF HAC on screen, but back testing and looking at different markets I don't think it is that useful. Probably the most useful thing I have found is just to scan the markets on the 4H TF, and see if any one is crossing the green and red HAC roughly about the same time, and then check the 1H, and 15M to see if the same thing is happening. What do you think?
Hey Timo,

I think that's a sound strategy. Generally if the green HAC on H4 is being crossed, the red HAC on H1 will be crossed also. If it is, this shows great alignment and a high-probability of working out. This is true of smaller TFs as well. Generally, this works well but sometimes, especially if a triangle pattern, a lengthy topping or bottoming formation or other difficult scenario is forming, the HAC lines will not line up that well.
  • #250
  • Mar 11, 2016 6:45am Mar 11, 2016 6:45am
Rudimentary Screener?

Last May I started developing an idea that seemed to have merit but it didn't address other concerns so I tabled it. It's very simple but appears to be effective. Anyway, it gives the general market condition relative to the previous day's activity by drawing a trend line from yesterday's open to halfway into today. The trend line ends one half into today's session at the level of the opening price. See below:

Attached Image (click to enlarge)
Click to Enlarge Name: TL Example.PNG Size: 72 KB


This can be done in mathematically in Excel for all markets and monitored accordingly. In the example below, the columns in red are markets that are currently below the trend line and those in green are above it.

Attached Image (click to enlarge)
Click to Enlarge Name: TL Excel Example.PNG Size: 66 KB


With great moves markets move together so I also made a little tool that keeps track of each currency relative to the others. It's probably a bit like a currency strength meter only this calculates relative to the trend line. In this example there's a column showing the % of the pairs that are being traded against that are up and down.

Attached Image (click to enlarge)
Click to Enlarge Name: TL example % Markets.PNG Size: 16 KB


The next example shows what sort of trade is either in progress or is beginning to happen. When it says "Reversal", it means that the market has moved in the opposite direction of its trend line. "Check H&R!" means to take a look at the chart and see if the HAC & RAC is giving a signal because the market is close to crossing the trend line. This is pretty early in development and I want to make some finer adjustments, but this is the direction I'm going in I think.

Attached Image


Finally, just for kicks, I track each market in terms of points. I also grouped them by geography and track them by points as well.

Attached Image (click to enlarge)
Click to Enlarge Name: TL Global.PNG Size: 24 KB


Anyway, to update this each day takes around 5 minutes or less. I just put in the new open for the day and it's all done automatically. Trying to keep it as simple as possible is the goal. It's so much easier to watch a single spreadsheet than to keep my eye on all the markets. Even monitoring a few can be difficult because some days they don't do a thing and I get tired out for nothing. Then, once exhausted the markets all of a sudden move and I'm either not ready or sleeping.

In the spreadsheet I attached, the data is set for Forex.com data, which uses a 'pro' suffix. Columns B-G import the data so if you want to play around with this and don't use Forex.com, you'll have to change the suffix in those columns.
Attached File(s)
File Type: xls Daily Trendlines-ALL.xls   144 KB | 312 downloads
  • #251
  • Mar 11, 2016 7:14am Mar 11, 2016 7:14am
Quoting Almuten
Rudimentary Screener? Last May I started developing an idea that seemed to have merit but it didn't address other concerns so I tabled it. It's very simple but appears to be effective. Anyway, it gives the general market condition relative to the previous day's activity by drawing a trend line from yesterday's open to halfway into today. The trend line ends one half into today's session at the level of the opening price. See below: {image} This can be done in mathematically in Excel for all markets and monitored accordingly. In the example below,...
Looks good, I hope it works under wine - had some difficulties with DDE in the past...

If I put 2 more HAC's on the M1 chart, say with multiplier 5 & 15 I get this:
Attached Image (click to enlarge)
Click to Enlarge Name: hac-4-GBPJPYM1.png Size: 102 KB


Lines come together in the dark circle and off it goes, happens all the time.
  • #252
  • Mar 11, 2016 7:21am Mar 11, 2016 7:21am
Quoting Go5
{quote} Looks good, I hope it works under wine - had some difficulties with DDE in the past... If I put 2 more HAC's on the M1 chart, say with multiplier 5 & 15 I get this: {image} Lines come together in the dark circle and off it goes, happens all the time.
Wow! That is awesome dude! See? I knew I wasn't seeing everything!

It makes sense though because if you think about it, large moves happen when cycles align. I actually tried something like this but never with large multiplier numbers on the M1. I was too focused on the lager TFs.

Nice work!
  • #253
  • Mar 11, 2016 8:16am Mar 11, 2016 8:16am
Quoting Go5
{quote} Looks good, I hope it works under wine - had some difficulties with DDE in the past... I
What sort of difficulties did you have? Are there times when the data doesn't pull through or was it corrupted somehow? Anybody else experience this?
  • #254
  • Mar 12, 2016 8:20am Mar 12, 2016 8:20am
Hi Almuten,

Please can I ask a couple of questions? First, do you take a trade if there is a setup just before red news. Secondly, please can you advise me how to alter my fib properties to show x1, x2, x3.

Again, many thanks for sharing this system, looks very promising.

Moonie.
  • #255
  • Mar 12, 2016 8:36am Mar 12, 2016 8:36am
Quoting Moonie
Hi Almuten, Please can I ask a couple of questions? First, do you take a trade if there is a setup just before red news. Secondly, please can you advise me how to alter my fib properties to show x1, x2, x3. Again, many thanks for sharing this system, looks very promising. Moonie.
Hi Moonie,

Thanks for the question. First of all, I tend to discount news but I might be persuaded to change my mind. I know, I know, news moves the market...but I'm of the mind that those who know what's going to happen have positioned themselves in advance to take advantage of it and this is revealed in the alignment of the indicators. The more certain it is, the better the alignment tends to be.

Sometimes news does weird things though, like create spikes in both directions. In those cases, I'm betting that the all-important alignment wasn't there beforehand.

As for the fibs, here's a screenshot of how I altered the default settings (what isn't shown is the first level, which is set at zero. The description for that says zero as well.) :

Attached Image
  • #256
  • Mar 12, 2016 9:26am Mar 12, 2016 9:26am
Something of Interest... Perhaps?

I'm of the mind that if I value a thing and I want to keep it, the best thing I can do is to share it. There's power and truth in that somehow. To withhold a thing is akin to making everyone an enemy to my own interests. I value my peace of mind, which is why I want to share what I have with you.

Anyway, not to confuse anybody with what I'm about to present here, what I'm going to show you is more for educational purposes; it's to show you how much deception really exists in the market and why what the eyes see is merely there to obfuscate the intentions of those who move them.

I've hinted (strongly) that markets are manipulated. Many will refuse to believe it because they're scared enough already. Even so, it's better to acknowledge it and deal with it accordingly than to hope that somehow the playing field will level itself and give everyone a fair shot.

In the screenshot below you'll see a white line and an orange line. This is an indicator you've never seen before (at least I'm pretty sure you never have) or even heard about. It's not based on price movement at all. What it is, is purely numerical. It measures the frequency of numbers; their occurrence over a given period of time. In this example, when the white line dipped below the orange and then recrossed above it, a line was drawn. The next day, when the same thing happened, the market was in exactly the same place as before, but a huge move ensued shortly afterwards. There is a reason for it.

Attached Image (click to enlarge)
Click to Enlarge Name: Manipulation 1.PNG Size: 65 KB


If left to themselves, without manipulation, markets would indeed be totally random. There are times when this is certainly the case, but there are also times when large players step in and bump them this way or that; they leave such a large numerical footprint they can't hide completely.

On the surface all the market activity looks the same, but if we peer below it just a little bit, there is another story. I think you'll enjoy hearing it
  • #257
  • Mar 12, 2016 9:44am Mar 12, 2016 9:44am
What it is...

This indicator is set up to measure two numbers - the number 1 and the number 4. The basis of the calculation is as follows:

The leading digit of: Range x volume. The frequency of leading digits is taken from 48 periods on an M5 chart - or one H4 bar.

In a completely random situation, the number one will occur roughly 31% of the time. The number 4 will occur only 9% of the time - a huge difference! In the indicator, the white line is the measurement of #1; the orange is the measurement of #4. Having them cross would be a pretty low probability indeed if things were random.

In this example, after that huge run was made, the lines recrossed and a horizontal line was drawn in the place they did so. See how it became resistance and then support?

Attached Image (click to enlarge)
Click to Enlarge Name: Manipulation 2.PNG Size: 63 KB


I've said before that I like to find "statistical events." Well having an unlikely distribution of leading digits certainly qualifies in my book!
  • #258
  • Mar 12, 2016 10:29am Mar 12, 2016 10:29am
What it's called

About three years ago I ran across a principle of mathematics that I found intriguing. Look it up under "Benford's Law." It's often used to ferret out fraud, so I figured that it ought to work in some way on the currency markets. Haha! It took about two years to figure out how best to make use of it though.

Anyway, this is a calculation hog so those with low power computers could get frustrated by it. It takes a while to get it loaded so be patient. There's a lot going on in it. FerruFX programmed it for me, btw. He's great at making my crazy ideas into a reality. Plus I trust him.

Anyway, I've at times put this on an H1 chart and marked the places where crosses happened and then maybe a month or two later those places get revisited and bounce cleanly off of them. There's something to this. Anyway, it helped me to see, truly see, the market in a new way. It gave me an insight that I didn't have before and began to bring a sense of orderliness from what seemed to be random noise before.

Below is an H1 chart that spans several months. Point A established resistance for Point C. The place of Point B was revisited at Point D for another Benford cross. Weird, huh?

Attached Image (click to enlarge)
Click to Enlarge Name: Manipulation 3.PNG Size: 64 KB


I don't mean to distract anyone from the original endeavor of working out the HAC & RAC method, but only to show that there's a hidden agenda at work here, which is why things like alignment are important. Plus, this might actually make a decent trading filter for somebody who might take a shine to it.

Anyway, here's the indy and a template that will make it easier to set up if anybody wants to play around with it.
Attached File(s)
File Type: ex4 Benford_Analysis_2_Ranges_v03.00_[KristopherStreeter].ex4   72 KB | 400 downloads
File Type: tpl % Manipulators-Benford.tpl   2 KB | 378 downloads
  • #259
  • Mar 12, 2016 12:56pm Mar 12, 2016 12:56pm
Fun with M1

Just for shits & giggles I'm going to put on an M1 chart of NZDUSD for the start of February. The periods are set to 60 in order to catch the H1 manipulation cycles. Oh...and the key to this is to do something sensible. On the M5 I put on 48 periods in order to capture the H4 manipulation. Plus, 48 periods is an ample enough of a sample size to obtain statistical reliability (or as much as a market could be deemed 'reliable.')

When these manipulation cycles occur, the key question to ask is "Why here?"

Of particular importance is when the cycle repeats in the same location several times. It can be the sign of a large campaign; a slow accumulation/distribution that sometimes lasts several days prior to a large move happening.

The start of the month is always a good thing because many times the high or low for the whole month begins there.

Attached Image (click to enlarge)
Click to Enlarge Name: Feb1-2.PNG Size: 89 KB


On Feb 3rd, the market bounced from the levels of Feb 1st & 2nd and then made a new level further up, which was made again on the 4th in the exact same place.

Attached Image (click to enlarge)
Click to Enlarge Name: Feb3-4.PNG Size: 72 KB


Feb 5th the market made a spike high above the level made the previous day and then toward the end of the day, new cycles formed; likely profit-taking places.

Attached Image (click to enlarge)
Click to Enlarge Name: Feb4-5.PNG Size: 56 KB


Feb 8th is the start of a new week. These are generally important because they can set the key level for the entire week. The market will often play off of the first levels of the week prior to establishing a sustained direction.

Attached Image (click to enlarge)
Click to Enlarge Name: Feb8-9.PNG Size: 125 KB


This next chart shows the support & resistance already established. New cycles formed in the same areas as the prior ones. That's why I didn't draw any new lines.

Attached Image (click to enlarge)
Click to Enlarge Name: Feb10-11.PNG Size: 113 KB


At any rate, this is (for me) a fun thing to do. It gives me some context of where the big players are interested. If a person isn't interested in keeping track of a bunch of TFs like I do and would like to play the M1, this is a great way to do it IMO.
  • #260
  • Mar 12, 2016 1:08pm Mar 12, 2016 1:08pm
Quoting Almuten
{quote} What sort of difficulties did you have? Are there times when the data doesn't pull through or was it corrupted somehow? Anybody else experience this?
Simply doesn't get any data. Maybe this cannot work under Wine...
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