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Different way to look at indicators

  • #1
  • First Post: Sep 7, 2006 8:41pm Sep 7, 2006 8:41pm
Hey, I was wondering if anyone has thought to look at not just the value of an indicator, but the change in the value of the indicator. I've been experimenting with this idea and I'm getting some good results as I get to know it better (see my Forward Test Log thread).

Anyone else have any experience or ideas with this?

andersenws
"Youth is the trustee of prosperity." - Benjamin Disraeli
  • #2
  • Sep 7, 2006 8:52pm Sep 7, 2006 8:52pm
I dont understand. are you talking about an indicator for an indicator?
  • #3
  • Sep 7, 2006 9:20pm Sep 7, 2006 9:20pm
Say for example that you are looking at a 4H chart, and you want to make use of the RSI indicator. 00:00 RSI=80, 04:00 RSI=74. Now instead of using the simple overbought/oversold lines at 30/70 or whatever, your value you would make a decision off of would be the change in the RSI values, in this case, (74-80) -6. This would then be a sell indication or whatever your system says. I have noticed some interesting patterns with this, in combination with a filter of another indicator and some discretion. My Forward Test Log in the journal section (which I already linked to above) is a system based on this type of a system, which I like to call a delta system.

I think there are some interesting patterns once you start to look at indicators like this, at least in my experience.

andersenws
"Youth is the trustee of prosperity." - Benjamin Disraeli
  • #4
  • Sep 7, 2006 9:38pm Sep 7, 2006 9:38pm
Quoting andersenws
Hey, I was wondering if anyone has thought to look at not just the value of an indicator, but the change in the value of the indicator. I've been experimenting with this idea and I'm getting some good results as I get to know it better (see my Forward Test Log thread).

Anyone else have any experience or ideas with this?

andersenws
Interesting. I'm actually experimenting with the stochastic indicator right now along with the Vegas 4 hour tunnel model. For those that have traded this model, you'll know that it does requires quite a bit of discretion when it comes to the slope of the 8 SMA line. What I'm testing right now is using the stochastic indicator to help with the discretion of the slope but to also help me in holding trades much longer. I'm not really using it for it's main purpose which is for overbought or oversold levels.

I only thought of the idea this past weekend so I'm not sure what the results are just yet. What I do know is that if I followed the stochastics, I could have picked up around 300 pips on cable. If anyone is interested in my studies then maybe I could try post some of my charts in the "Lost in the Tunnel" thread or something.
  • #5
  • Last Post: Sep 8, 2006 5:19am Sep 8, 2006 5:19am
Trading patterns on indicators, not on price, Woddie and he's cci is well known.


http://www.forexheaven.com/woodies-cci.html
Try hard, think fast, die young
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