Euro Dollar one-minute Trading System

The System rules :-

Indicators:
Step MA v7 - default with step set to 20 & width set to 1
Heiken Ashi - default with color set to red/dodger blue & width set to 1
Stochastic Oscillator - set to 14,3,3 with 20/80 levels & only using the main line

Strategy MT4 Template stepma.tp


Buy Signal
1- the step ma turns from red to blue
2- stoch signal line closes at or above the 80 level
3- heiken ashi candle is blue

Sell Signal
1- step ma turns from blue to red
2- stoch signal line closes at or below the 20 level
3- heiken ashi candle is red

Stop Lose
20 pips including spread

Target profit
20 pips after spread

Time frame
1 minute

Currency pair
EUR/USD

Trade signal
On the close of a candle


any Question about the system i am here to answer

HAve A nICe tRADe

Trend Finder Daily Trading System

put this indicator in indicator folder here C:\Program Files\MetaTrader\experts\indicators

StochHistogram.mq4

Put this tpl file in the "templates folder" here C:\Program Files\MetaTrader\ templates

trend finder daily.tpl


Chart Setup:
Open a Daily Chart.
Add the trend finder daily Template to the chart.
Add a 200 Simple Moving Average.

Buy Signal:
1. Price is above the 200sma.
2. The Awesome Oscillator has changed to green.
3. The Stochastic Histogram has changed to green.


Sell Signal:
1. Price is Below the 200sma.
2. The Awesome Oscillator has changed to red.
3. The Stochastic Histogram has changed to red.


Money Management and Exit Strategy:
1. Open 2 trades which together risk no more than 3% of your total available balance.
2. Set a stop loss of -100 pips for both trades.

Trade 1: Set a take profit at +50 pips.
Trade 2: Set a take profit at +100 pips.
When you reach +50 pips, set the stop loss for the remaining trade to break even.

Time frame
- All Time frames

Currency pair
- All pairs

any Question about the system i am here to answer

HAve A nICe tRADe

Pbar Swing System

The system developer is Zunit. Here is the system thread in ForexFactory forum.

put this indicator in indicator folder here C:\Program Files\MetaTrader\experts\indicators

Pbar_ Indicator.mq4

Put this tpl file in the "templates folder" here C:\Program Files\MetaTrader\ templates

pbar_Template.tpl


Buy Signal:
1- RSI 2 period goes above the 50 level.
2- ADX 1 period is below the ADX 16 level.

Sell Signal:
1- RSI 2 period penetrate the 50 RSI level.
2- ADX 1 period goes above the 16 ADX level

Stop Lose
- 80 pips or the lowest low of the previous 3 bars.

Target profit
- Exit when the stochastic crosses.

Time frame
- All Time frames

Currency pair
- All pairs ( EUR/CHF Recommended )

any Question about the system i am here to answer

HAve A nICe tRADe

Narrowing breakout channels

System concept

Many trend-following systems use breakout channels that track high and low levels over certain look-back periods (e.g., 20 days) to determine trends. Once price crosses above or below the channel price, these systems enter the market in the breakout direction. However, because many trend followers enter the market when price exceeds these levels, it’s difficult to get a good fill.
This system narrows the breakout channel a bit to place trades before other traders do. Instead of waiting for price to cross its highest or lowest points over the last 20 days, this system enters at the second highest or lowest level. The system uses two indicators called HighestN and LowestN that return the nth highest or lowest price within any look-back period (these indicators are available free at www.Wealth-Lab.com).

Figure 1 shows several trade signals in the Euro FX futures (EC). The system held a short position on May 26, 2000 before reversing and going long once price crossed above the upper boundary of the second highest channel. Then, it exited and went short on July 13 after price crossed below its lower band — a 1.3- point gain.
The system held this short trade until Nov. 30, when it reversed again as price penetrated the upper channel — a 7-point profit. This final long trade exited on Jan. 24 with a 5.2-point profit. Each trade occurred slightly earlier and was more profitable than a standard breakout system based on 20-day highs and lows.

Rules:

1. Go long at stop at the second highest high of the last 20 days.
2. Exit long and go short at stop at the second lowest low of the last 20 days.

Test data
The system was tested on the following currency futures: British pound (BP), Euro FX (EC), Japanese yen (JY), Swiss franc (SF). This test used ratio-adjusted data from Pinnacle Data Corp. (www.pinnacledata.com).

Test period
January 1990 until January 2005.

Starting equity
Starting equity is $1,000,000. Deduct $20 commission per round-trip trade per contract. Apply two ticks of slippage per stop order.

Money management
Risk a maximum of three percent of current account equity per trade. The number of contracts per position is calculated using the basis price (the closing price of the entry bar), the stop-loss level, the contract’s point value (i.e., the dollar value of a one-point move), and the portfolio’s total equity.
For example, the S&P futures contract has a point value of $250. Assume the system goes long at 1,000 (the basis price) and the stop-loss is 900. To determine the trade’s dollar risk, multiply the point value ($250) by the difference between the basis price and the risk-stop (1,000 - 900 = 100). Therefore, a single contract’s dollar risk is $25,000.
If the portfolio’s total equity before entering the position was $1,000,000 and we do not want to risk more than 10 percent of our total equity ($100,000), we would buy four contracts.
Had total equity been less than $250,000, we would not have been able to take this position because its dollar risk would exceed our system’s 10-percent equity risk. This position-sizing method keeps us out of risky trades that have potential to ruin our account.


Test results
Figure 2’s equity curve increased steadily during the first five years. But the test’s second half was quite volatile, with high equity peaks and drawdowns of up to 48 percent — too high for most traders. Figure 3’s drawdown curve confirms this behavior. The system’s high volatility also resulted in a low Sharpe ratio (0.58).

However, its 10-year annualized gain was almost 12 percent. Also, the system’s exposure (8.55 percent) is very low — see Figure 2’s light green area. With such low exposure, you could increase your risk or invest the remaining capital somewhere else to flatten the equity curve.
We also tested the system across a wide range of parameters and compared the results to the traditional breakout system (i.e., highest high and lowest low). We ran separate tests with look-back periods from 10 to 60 days, and we also tested different parameters (n = 1, 2, and 3). All other variables (position sizing, commission, slippage, etc.) remained constant.

Figure 4 compares the different tests’ profitability. Note that all tests began on the 60th day so all results could be compared to each other. Thus, profits for the 20-day lookback period differ somewhat from the original results.
The figure shows the second highest/lowest levels (blue bars) outperformed the traditional break-out approach (yellow bars) for all periods except the 40-day window. Also, the third highest/lowest channel (red bars) boosted gains even further in eight of 11 cases.


Outcome
When waiting for a breakout signal, it makes sense to use a modified channel based on the second (or even third) highest/lowest price. While Figure 4 proved these narrower high/low levels can lead to higher profits, we only tested parameters from 1 to 3. Testing larger values (n = 4 or higher) would show whether results could be improved further. But don’t forget to also test the system across many look-back periods to ensure its stability.

—José Cruset of Wealth-Lab
January 2006 • CURRENCY TRADER

Pivot Points and Candlesticks Trading Strategy

Augmenting pivot point analysis with candlestick formations helps determine potential turning points in the forex market.

BY JOHN PERSON

Trade setups confirmed by independent techniques or tools — or those that occur simultaneously on different time frames — naturally carry more weight than those signaled by a single input. The trade examples outlined here combine pivot points with candlestick patterns to better pinpoint forex trade opportunities.

Pivot point analysis is based on mathematical calculations used to determine future support and resistance levels. The pivot point value is derived from the high, low and closing prices of the previous price bar, and is then added to and subtracted from the previous bar’s reference points to determine support and resistance levels for future trading. The pivot point (PP) formula is:

1. PP = (H + L + C)/3
2. First resistance level (R1) = (PP*2) - L
3. Second resistance level (R2) = PP + (H - L)
4. First support level (S1) = (PP*2) - H
5. Second support level (S2) = PP - (H - L)

There is some debate about which value should be used for the closing price in the virtually 24-hour forex market. In forex, all trades must be settled within two business days, which is established at the close of banking business at 5 p.m. ET. As a result, this is the time typically used for the closing price.


Using pivot points

Some traders use the pivot numbers to estimate the upcoming high or low, or to simply identify a level at which a market might change direction on an intraday basis.
A popular pivot-point approach is to cover any short positions and go long at either of the two support levels, or sell any long positions and go short at the projected resistance levels. Accordingly, while these price levels provide points at which to enter or exit the market, they also indicate where not to make trades. For example, you should not buy just below either of the resistance levels.
It is beneficial to use multiple time frames — e.g., monthly, weekly, and daily — to identify multiple pivot point support and resistance levels. A particular level has more significance when pivot points on two or more time frames coincide.
Combing pivot point levels with the price moves implied by candlestick patterns improves your odds of identifying favorable trade points.


Candlesticks

The components of a candlestick are derived from the same open, high, low, and close data that make up standard bar charts. The main component we are concerned with here is the relationship between the open and close of a session, which is called the candle’s “body” or “real body.” The color of a candlestick does not indicate whether it closed higher or lower than the preceding candle; rather, it reflects where the candle closed relative to the open.
In Figure 1, the trading period’s high and low are represented by the highest and lowest points of the candlestick, while the session’s open and close are represented by the top and bottom of the wider part of the candlestick. The thin lines at the tops and bottoms are called “shadows” (or wicks), and the wider parts are the real bodies. The candle is typically white (or hollow, or green) if the close was above the open and black (or red) if the close was below the open. Candle A closed higher than the open and candle B closed below the open. Candle C closed above the open — the open was the low price of the day, and the close was the high price of the day. Candle D illustrates the opposite condition. Finally, candle E opened and closed at the same price and is identical to its bar-chart equivalent.


Doji-based patterns: Indecision and reversal

Candlesticks are designed to make bullish and bearish momentum more evident on a price chart. This can highlight certain patterns, such as the high-close doji, that help determine a change in market direction or reversal.
A doji is a candle that opens and closes at (or very near) the same price — look again at Candle E in Figure 1. Such candles indicate indecision or uncertainty. Both buyers and sellers have lost confidence from the time the market opens, as price has pushed both higher and lower, only to end up where it started. Indecision is the last thing you want to see in a trending market. Rejection or failure from a high or low is a sign potential changes in the market are on the horizon.
In a strong downtrend, a market will usually close near its low as highly-capitalized traders hold or add to short positions overnight. If these bigmoney traders are not confident the market will close lower, the market may have the tendency to close back near the open.
Dojis sometimes appear as part of more reliable two- and three-candle formations, such as the morning star pattern, that highlight reversals. The basic morning star is a three-candle, bottom reversal pattern. When the pattern’s middle candle is a doji, it is called a morning doji star, as shown in Figure 2.
The first candle has a long, black real body (a lower close than open); the second candle has a small body that gaps below the first candle’s body. The third candle is a white candle (a higher close than open), and closes above the midpoint of the first candle’s real body. The third candle’s body may sometimes gap higher than the second candle’s body, as is the case in Figure 2.
There are several variations to this textbook description. For example, the initial black candle might have a small real body and the real body of the long white candle might entirely engulf the long dark candle or simply just partially penetrate its real body. The most important thing to notice is what happens after the doji candle. A candle after a doji that closes above the doji’s high confirms a directional change has occurred.

When either a morning doji star or simply a doji develops after a downtrend — especially if it is near an important target, such as a pivot point support level — it is likely if the next candle closes above the doji’s high, a reversal of the recent trend will occur. To trigger an entry, it is important for price to close above the doji’s high. This confirms the breakout and positive momentum should develop within a few bars.


Trade examples: Combining pivots and dojis

Lining up the pivot points on your screen before the beginning of a trading session prepares you for when a setup like a doji or morning doji star pattern develops.
Figure 3 is a 15-minute chart of the Euro/U.S. dollar rate (EUR/USD). On Dec. 10 (a Friday) the high was 1.3318, the low was 1.3148, and the close was 1.3241. The resulting pivot point levels for the following trading day (Dec. 13) are:

Pivot Point = 1.3236
R2 = 1.3406
R1 = 1.3323
S1 = 1.3153
S2 = 1.3066

On Dec. 13 the high turned out to be 1.3325, the low was 1.3192, and the close was 1.3313. The market did not precisely hit the S1 target number, but the low occurred almost exactly at the midpoint (1.3194) of the pivot point (1.3236) and S1 (1.3153). In a bullish market, the market will often hold between the S1 and the pivot point. It is at this price level you should look for setups such as the doji.


Figure 4 is a five-minute chart of the December 2004 EuroFx futures contract (ECZ04) from Nov. 16. Note that once the candle closes above the second doji candle’s high (see the green arrows), price has clearly changed direction.
This chart also provides a good example of how the market reacts near pivot point levels. On the previous day (Nov. 15), the high was 1.2999, the low was 1.2916, and the close was 1.2943. The pivot point was 1.2953 and the support and resistance levels were: R1 = 1.2989; R2 = 1.3036; S1 = 1.2906; and S2 = 1.2870. The high on Nov. 16 was 1.2996, the low was 1.2920, and the market closed at 1.2966.
There were two opportunities to trade from the long side using the doji method. The first doji, which made the low of the day (the first green arrow), was a morning doji star pattern. It formed below the daily pivot point. Notice that once the market closed above the doji’s high it triggered a long position. This up move stalled around the R1 level at 1.2989. (Also notice a doji appeared immediately after the high, and the market proceeded to trade lower.)


Trade management

A risk-control strategy to accompany this pattern might include placing a stop-loss order below the doji’s low by an amount that is 120 percent of the 10-day average range. You could also use a stop-close-only order (which is triggered only on the market close) below the doji’s low for the time period you are trading in.


All time frames

This method is applicable to both the forex market and currency futures, as well as different time frames. (The five-, 15-, 30-, and 60-minute time periods are especially useful in forex trading.) The confluence of trading signals can help identify points at which a market is likely correct or reverse, which is useful for entering trades as well as taking profits.


CURRENCY TRADER • February 2005

Volatility-based currency trading

Market volatility can be a complex subject, but understanding a few basic principles can help you implement strategies to capitalize on volatility extremes.

Volatility-based trading approaches have traditionally been popular among hedge funds, commodity trading advisors, and other professional traders. There are many ways to gauge volatility and incorporate it in a trading strategy. Of the different ways to characterize and trade volatility, the best are based on the tendency of volatility to “revert to the mean.”

The premise behind volatility mean reversion is that periods of extraordinarily high volatility should be followed by periods of lower, more normalized volatility. Similarly, periods of extraordinary low volatility should be followed by periods of higher, more normalized volatility. This tendency is reflected by the familiar progression of a market that meanders in a narrow trading range (a low-volatility condition), only to explode out of the consolidation and embark on a strong price trend (a highvolatility condition). Eventually, the price move exhausts itself, at which point volatility will again fall to a lower level.

We’ll analyze the two simple methods for trading volatility in the forex market: inside days and shortterm/ long-term volatility comparisons.


Consecutive inside bars

An inside bar is a bar whose range is contained within the prior bar’s range — that is, the bar’s high and low do not exceed the previous bar’s high and low (see Figure 1). They are easy to identify visually and should be one of the basic patterns traders should notice immediately.

Inside bars by definition have lower volatility — that is, less price movement — than their preceding bars, and successive inside bars reflect progressively shrinking volatility. Per the mean-reversion theory, the more inside bars, the higher likelihood of a volatility surge or a breakout scenario.

The following volatility trade can be implemented after at least two consecutive inside bars have formed. This type of strategy is best employed on daily charts; the longer the time frame, the more significant the potential breakout.

The strategy works for both longs or shorts. Although entry orders can be placed on both sides of the market, traders should use other tools to determine the bias for a particular trade. For example, if the inside days occur within a bullish chart pattern, such as a developing ascending triangle, this increases the likelihood of an upside breakout. On the other hand, if the inside days are developing within a descending triangle formation, this increases the likelihood of a downside breakout. Here are the rules for a long trade setup:

1. Buy above the high of the most recent inside bar.
2. Place a stop-and-reverse (SAR) order a few pips (approximately 5 to 10 pips, depending on the bid-ask spread) below the low of the most recent inside bar. The purpose of the SAR order is to reverse the position if the initial move turns out to be a false breakout.
3. If the position moves higher by the risk amount (the difference between the entry price and the stop price), sell half the position and replace the SAR order with a trailing stop.
4. If the SAR order is triggered after the entry, place a stop a few pips above the high of the most recent inside bar.
Short trades: For a short trade, the rules are the same except that you enter below the low of the most recent inside day and place an SAR order a few pips above the high of the most recent inside day.

Figure 2 shows two consecutive inside bars in the U.S. dollar/Canadian dollar (USD/CAD) rate. Applying the strategy, a buy order is placed above the high of the most recent inside bar, while a stop is placed below the low of the most recent inside bar. The long order is triggered and a 200-pip rally ensues with virtually no retracement.

Figure 3 shows a more complex trade example in which the SAR order is triggered. Because of the bullish implications of the ascending triangle that was forming when the two inside bars appeared, the long-trade entry rules were executed:

1. We placed an order to go long a few pips above the high (.7660) of the most recent inside day. The order was triggered.
2. We placed an SAR order a few pips below the low of the most recent inside day at .7600 for a risk of approximately 60 pips. The SAR was triggered when the market broke out of the bottom of the triangle, and we sold the original long position and entered into a new short position.
3. When the market moved lower by the risk amount (60 pips), we sold half the position (at .7540). We then used a 30-pip trailing stop on the remaining position.

The low on April 14, 2004 was .7299, and we exited the remaining half of the position at .7329.


Volatility comparison

Currency option volatilities measure the rate and magnitude of the past and potential future changes in a currency’s price, and they can be a useful tool for timing currency movements.

Implied option volatilities, which are reflected in option premiums, are the market’s current estimate of the future fluctuation of a currency’s price. Historical (or statistical) volatility, which reflects past price movement, is typically measured by calculating the annualized standard deviation of price changes over a given period (e.g., 20 days, 100 days).

Figure 4 shows only current option implied volatilities (which are based upon a survey of interbank sources). Traders implementing this strategy would need to keep a journal tracking historical implied volatilities. Onemonth and three-month implied volatilities are two of the most commonly benchmarked time frames.

When option volatilities are low, traders should look for potential breakouts. Current implied volatility should be at least 25 percent lower than historical implied volatility. (It is best to measure against actual historical volatility, but that data is not always readily available.) Conversely, when option volatilities are high, traders should look for range trading opportunities.

Typically, when a currency trades in a range, its option volatility will decline, because by definition range trading means lack of movement.
When option volatilities make a pronounced down move, it is usually a sign of a significant potential price move and upcoming trade opportunity.

This characteristic is very important for both range and breakout traders.
Traders who usually sell at the tops of ranges and buy at the bottoms can use this approach to predict when their strategy could potentially stop working, because if volatility becomes very low, the likelihood of continued range trading decreases.

On the other hand, breakout traders can monitor option volatilities to make sure that they are not buying or selling into false breakouts. If volatility is at average levels, the likelihood of a false breakout increases. Alternatively, if volatility is very low, the probability of a real breakout is higher. However, traders must be careful because volatilities can have long downward trends, as they did between June and October 2002. Therefore, declining volatilities can sometimes be misleading. What traders need to look for is a sharp move in volatility, rather than a gradual one.

Figure 5 shows an example in the U.S. dollar/Swiss franc rate (USD/CHF). The blue line is price, the green line is the one-month (or shortterm) volatility, and the red line is three-month (or longer-term) volatility. For most of December 2003 the onemonth volatility was below the threemonth volatility, which coincided with the development of sharp down moves in USD/CHF. Between Feb. 24, 2004 and March 9, 2004, the one-month volatility spiked above the threemonth volatility, which coincided with a period of range trading.


All shapes and sizes

Volatility is expressed many ways — on different time frames and in term of option prices and past price fluctuations in an underlying market.
Understanding some simple volatility principles, such as mean reversion, can help you time trades when a volatility shift is likely to occur.


BY KATHY LIEN
February 2005 • CURRENCY TRADER

Hedging Lots Strategy

1. Just for simple explanation i assume that there is no spread. Take position with any directions we like, example: Buy 0.1 lot at 1.2160. At the same time or a few seconds after placing Buy, put Stop Sell 0.3 lot at 1.2130. Attentions the Lots.

2. If the TP at 1.2190 not reached and the price goes down and reach SL or TP at 1.2100 then we have profit 30 pips because Stop Sell has become an active Sell before.

3. But if TP and SL at 1.2100 not reached and the price goes up again, we have to had Stop Buy already at 1.2160 to anticipate. At the time Stop Sell was reached and became active Sell 0.3 lot (pic: number 2), we have to immediately place the Stop Buy 0.6 lot at 1.2160 (pic: number 3).

4. If the price goes up and reach SL or TP at 1.2190, then we have profit 30 pips too.

5. If the price goes down again without reaching any TP, then continue anticipating with Stop Sell 1.2 lot, then Stop Buy 2.4 lot,…and next. Continue this sequence until we meet the profit. Lots : 0.1, 0.3, 0.6, 1.2, 2.4, 4.8, 9.6, 19.2, 38.4 and 76.8.

6. At this example i use 30;60;30 configuration (TP 30 pips, SL 60 pips and Hedging Distant 30 pips). Otherwise we can try use 15;30;15, 60;120;60. Also we can try to maximizing profit by testing 30;60;15 or 60;120;30 configurations.

7. Considering the spread, choose the pair are most tightest spread like Euro/Usd. Usually the spread is only around 2 – 3 pips. More tight the spread, more absolute the winning we got. And I think I found the “Never Loss Strategy”…let the price move to anywhere he likes, we’ll get the profit anyway.


Harry

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Paulo_Costa_Hedge.mq4

Paulo_Costa_Hedge.ex4

The Big Ben strategy

Big Ben is a currency-specific trading strategy designed to capture the first directional intraday move that often occurs within the first few hours after the Frankfurt/London market openings, which begin at approximately 1 a.m. ET. The strategy works best with the British pound/U.S. dollar (GBP/USD) rate.

Because this currency rate trades lightly outside of London trading hours, the surge in trading every morning in the U.K. gives it a “real” market opening, which the strategy looks to exploit. Figure 1 shows pound/dollar trading is virtually nonexistent during Asian trading hours. When London opens, however, the pound/dollar accounts for nearly one-quarter of all forex trading. Currency rates with more continuous, 24-hour trading will have less of a distinct open/close as they pass through the different money centers.

For example, the dollar/yen rate (USD/JPY), which dominates forex activity during Asian trading hours (78 percent of volume), still accounts for 17 percent of trading during European hours.

Before explaining the specific logic behind the methodology, let’s take a look at what needs to occur for a trade to set up.

The rules

The following rules are for short trades, but the strategy can be reversed to trade on the long side.

Setup:

1. The pair makes a new range low at least 25 pips (a pip is the forex equivalent of a tick, or minimum price fluctuation) below the opening price after the early Frankfurt/London trading in the GBP/USD rate begins around 1 a.m. ET.

2. The pair then reverses and trades 25 pips or more above the opening price.

3. The pair then reverses once again to trade back below the intraday low established in step 1.

4. Sell a breakout (at least seven pips) below the London low.

5. Once filled, place an initial protective stop no more than 40 pips above the entry price.

6. After the market moves lower by the distance between the entry price and the stop, cover half the position and trail a stop on the remainder.

These simple rules position you to profit from common behavior that can occur in the pound/dollar when the London/European market opens.


The logic

As mentioned, the pound/dollar rate tends to have lower trading volume outside European/London trading hours because the majority of GBP/USD spot deals are worked through U.K. and European dealers. This gives the European/British interbank community tremendous insight into the currency pair’s actual supply-demand picture.

The Big Ben trade sets up when interbank dealing desks use this intelligence to trigger stops on both sides of the market, resulting in new intraday highs and lows. Once these orders are cleared from the books, the market is primed for its first real directional move of the day, which is what the strategy is designed to capture.

The logic behind this trade should be familiar to S&P futures traders, as it is similar to many opening-range breakout strategies used to capitalize on the first real move of the day after the cash stock market opens in New York.


Trade examples


Figure 1 shows a prototypical Big Ben trade on a five-minute chart. The first vertical line marks midnight ET. The second vertical line denotes the Frankfurt open and the third line shows when London players begin entering the market.
When the Frankfurt market opened, the pound/dollar first moved lower, taking out any nearby sell stops. Within 15 minutes of London entering the picture, however, the market reversed to the upside. The pair was now free to make the first real directional move of the day, and it fell 90 “pips” before buyers stepped in.


Figure 2 illustrates a variation of the Big Ben strategy that commonly occurs when there is an abnormally wide opening range. In this case, the pound traded up 26 pips after the London open to 1.8583, establishing the top of its range. It then came under pressure and sold off 65 pips to make a low of 1.8518 (horizontal line). Next, the currency traded up 50 pips before reversing and plunging below the former low. In this case, a trader could still justify entering a position, since the basic principles behind the trade were still present.

The Big Ben currency day-trading strategy allows you to limit initial risk and capture good moves early in the London trading session. The product of years of watching the currency markets, the approach is based on the workings of the global forex market and attempts to exploit its structure.


KRISTIAN KERR

CURRENCY TRADER • September 2004

Indicators Ishimoku Strategy

As practice shows experienced players in the market Forex, when you use this method of work no one had ever received a negative result (if you take the unit to record a large period).

Thus, we can safely recommend the method outlined below for use as a beginner market, and those who already have experience in the FOREX market.

History

This indicator has been invented in Japan, a country with ancient traditions of finance. That is it we owe the appearance of one of the first theories of trade in the market, namely the analysis of a candle.

Back in the mid 18 th century, comes from the ancient camurayskogo kind man named Munehisa (Sokyu) Honma, selling rice, brought the basic principles of the analysis to trade rice in the market.

It is clear that since then, much has changed in the behavior of the market, and the methods of analysis, but now Japanese analysts suggest the best indicators for use by traders. And proof - an indicator Ishimoku.

General Strategy

This indicator was created Hosodoy stock analyst, who believed that it is necessary to include the signals from the line-spen Chico, setting stoploss abroad clouds opposite to the direction of the entrance. For example, if we play inside the cloud bottom to top, the stop-loss, we set for the lower boundary of the clouds, as if the top down - over the top.


Take-profit at the game inside the cloud is another cloud boundary, taking into account the filter (which is 10-20 per cent of the clouds), but outside the boundaries of the cloud - getting any return signal, that is, for example: rose at the intersection of the graph line SENKOU-SPEN vvniz. Standing until, for example line-Chico spen reaches up schedule.


(Theoretically, the output signal is: turn TENKAN-SEP, the reverse is the intersection of the line graphics Chico-SPEN, the reverse is the intersection of the graph of a line clouds in prices).

Hosoda used his indicator for trading on an index Nikey. And got very good results.

The most powerful is the signal to the four-hour schedules. Then - at the time, then the minute schedules.

This is considered the strongest signal breakdown schedule line senkou spen-B, and Chico-spen, and then equal in strength - the signal lines and the three "golden" and "dead" cross. Thus, we have an indicator, which gives us approximately 65 percent (!) Chance of winning.

Various additional tips:

# The technical stop-loss. He exhibited in the 15-30 points of euro, pound on the 20-40, 35-50 and 30-80 on the yen on the franc. - For the game on time schedules. Such stop-loss is not wise to stand for day and weekly schedules. (They stop-loss is always displayed according to the 2nd or 4 ways). At the same time he is exposed to low levels of early (if possible).
# The next high level. (We - choose from the fact that the closer - in prices or heavy cloud level and take the earliest).
# The value of such a stop-loss can be quite large (with the game on the weekly charts, it can reach 200 pips on the day -100-120, on time - 40-50 to 50-60 euro for pound, franc at 70-100, 60 -90 to yen).
# Stoploss - always 15 pips (on the franc -30). The probability of such a foot operation, we believe a priori equal to not less than 40 per cent. (80, if you stand up against the trend in hours 40 - if, for trend. AND 50-60 - if the market fletuet).
# Stop-loss price for the cloud.

Stop-loss set outside the channel at about 5 points behind. Practice shows that the game in the channel has the greatest chance of success if we play in the direction of the trend (time) - when the game within days and days - if the game goes the other day.

From the theory of games is well known that for sufficiently large number of experiments, playing the game with a plus-sum, you will eventually win, therefore, with sufficient psychological preparation, the method has a fairly routine earn money.

Moving Average (MA)

Moving averages (Moving Average), are the most frequently used indicators of technical analysis. The well-known adage states that: «At the moving average traders earn hundreds of times more money than all the other indicators together».

On the schedule moving averages are the following:


Properties window:


Moving averages vary the method of averaging.
Simple Moving Average - simple moving average
Exponential Moving Average - exponential moving average
Smoothed Moving Average - smooth moving average
Linear Weighted Moving Average - linear-weighted moving average

* Moving average. R - averaged value.



* Weighted Average (Weighted Moving Average)
P1, P2, P3 - averaged values



* Exponential Average (Exponential Moving Average)
P1, P2, P3 - averaged values



Moving average smooths fluctuations in the study of currency, with an average of a certain historical period. The advantage of this technical indicator is the ability to visually cut off the small fluctuations, and clearly see the direction of movement.

The disadvantage of moving averages is the average lag in relation to the rate of the study variables. It follows that the larger the averaging period, the more important signals they give, but at the same time, and more late. The value of the moving average - that it gives the general direction of motion. Moving averages, as sotsopros crowd, where will the price. If they rise, the expectations of a good crowd. Fall, respectively, bad.

Systems based on moving averages

The most simple system, based on the moving average, buy it while it's growing and selling, as it decays.

Plus Strategy: simplicity.

Less: Due to the delay of one bar, spike, making this strategy maloprimenimoy.


The interaction of price and AI

The most famous of these strategies is as follows:
Buy when the MA increases and the closing price is higher than MA;
Sell when the price closing below the MA;
Sell when the MA is reduced, and prices closed below MA;
Cover the sale, when prices closed above MA.


This strategy gives the money, although it is rarely used, because there is much more efficient system.

The intersection of the middle

Buy when the price crosses the average upward. Sell when the price crosses the average down.

Perhaps the oldest of the currently used strategies. Nevertheless, we have sold tens (if not hundreds) of traders, who successfully apply this simple strategy.


In this strategy there is only one negative: it is usually to add a «Filter volatility». Say, do not sell it when the RSI is near zero. And also, it is not applicable to trade in nizkovolatilnye (holiday) days and at night.

For beginners this is probably the best strategy. Suppose you do not earn money on it, all the world, but through it you can feel the taste of money in the market Forex!

Channels Keltnera Strategy

The name given by the name of their author Chester Keltner, who first introduced the system of earnings for the 10-periodnoy moving average in his book 1960. «How to make money in commodity markets».

This price envelopes or bands, which are placed above and below the exponential moving average multiplied by its value on the value of the average True Range (ATR).

There is no doubt that this is a very interesting channels. In the first place because they ingeniously connected by two indicators: moving averages and the indicator ATR.

* The current maximum negative current minimum;
* Absolute value of: the current maximum negative previous closing;
* Absolute value of: the current minimum, minus the previous closing.

Upper Canal Keltnera = EMA (closure, x) + (m * ATR (y))

Lower Canal Keltnera = EMA (closure, x) - (m * ATR (y))

Where:
x = length (days) EMA
m = multiplier
y = length (days) to calculate the ATR

This is indeed a powerful and surprisingly simple system. It allows you to answer the constant question Trader: Where is the trend, but with Flat and earn money.

Channel Strategy

Channels are built to last three extremum - the line for two Nizam and the parallel through the top, or vice versa, the line on the two peaks and two parallel Nizam. The lines are constructed by the maximum (minimum), then have to tenyam candles.

The distance between the extremum is not limited. There are "groups extremes" - two or even three candles with practically the same maximum (minimum). Identify them as one extreme, the channel holding the line at the top (bottom) the right of them.


Open positions - when you reach the border canal - interior canal. In doing so, the signal for opening occurs when prices hit a zone + -5 points from the line of the channel. Number of lots continuously for a week (better - the whole month).

Stop with the turn at the opening: 50-70 points.

The purpose - the opposite border of the channel.

Always be open only one position (with a selected number of lots). After opening the position focus on the best exit from the market for this: When the distance from the opening price of 50 points (to profit), the stop is moved to the point of opening.

Next - podzhatie at a distance of 50 items every 10 points (trailing stop). When approaching the goal of decreasing the value podzhatiya. Podzhatie made only to increase profits, but never - to zoom out. With smooth reaching the channel border (of the current!), Closing the position, and opening a new position in the opposite direction.

If faults stop loss in - the opening position in the opposite direction for the purpose of paragraphs 57 (a turn). Principles podzhatiya - the same. According to a new position established by the stop order, without a turn at a distance of 57 items. When triggered the second stop - a break in the trade for two days.

This strategy allows you to borrow money from a well-measured movements of currency pairs. Do not sell to the powerful news and in the case of abrupt change of the expected trend.

But the main thing - time to close the profit is not greedy!

The strategy is designed for all levels of experience.

Bill Williams Strategy

Without a doubt, the system B. Williams - the most ambiguous and controversial strategy of our time. Someone makes it hundreds of thousands of dollars, someone (an absolute majority) continuously loses.

In any case, if you understand it to the depths, you will no doubt be able to earn good money at it.

Basically, all the prerequisites for this strategy based on the «Chaos Theory» - the theory of random walks, which will be found grain patterns. Traditionally, chaos is seen as a disordered structure, although in reality it is the opposite nature rather chaotic.

Chaos - this is a higher degree of order, which is organizing the links and the lack of randomness as opposed to cause-effect relationships. Chaos constant temporal stability. Financial Markets - generation of chaos.

In the linear world of cause and effect is predictable. In the non-linear (real) world, such a relationship between cause and consequence of non-existent. Therefore, in terms of B. Williams, the use of fundamental and technical analysis can not receive regular income in the financial market.

In accordance with the Chaos theory is the investor, which is starting from a linear perspective, will never see the "real" market, thus, bear the risk of permanent loss. Chaos theory is refuted, what is the basis of technical analysis: the behavior of the market in the future like the past.

Bill Williams believed that the reason that traders lose in the market, is that they too rely on various types of analysis, which he believed "in reality does not work, so they are useless and even dangerous."

In order to achieve excellence in the trade in financial markets, you need to know the very structure of the market. This can be achieved by exploring the market in five dimensions:
Fractal (phase space)
The driving force (power phase)
Acceleration / deceleration (power phase)
Zone (a combination of strength / power phase)
Line Balance

Each dimension adds additional information to the general picture of the market, so to fully understand his need to "measure" the market in all five dimensions.

It should be noted that prior to the appearance and performance of the first signal from the first dimension (fractals), the signals of other measurements (AB, AC, zonal trade and Balance lines) are ignored. But after the first position on the fractal signal trader "adds" to that position every time you receive the signal from any of the five dimensions. As a result, when driving the market in 30% of the trader managed to earn 90-120%.

Sensitive to price dynamics technique out of the market allows you to record profits in the last 10% of the trend, capturing not less than 80% of traffic (from the words of B. Williams). Recently, B. Williams approach to trade in financial markets has become very popular among traders in the market FOREX.

For each of the principles of Bill Williams has created his own indicator that helps determine the appropriate phase.

The driving force (power phase). Bill Williams Alligator (Alligator)

Bill Williams Alligator (Alligator) - a combination of three lines of the balance (Fig. 1):

Alligator jaw (blue line) - This 13-periodnaya moving average for central price (High + Low) / 2, displacement of 8 bars in the future;

Alligator teeth (red line) - This 8-periodnaya moving average for central price (High + Low) / 2, displacement by 5 bars into the future;

Alligator Lips (Green Line) - This 5-periodnaya moving average for central price (High + Low) / 2, displacement of 2 bar in the future.


With the Alligator can determine the direction of the current trend or its absence.

If all three lines are intertwined, the Alligator is asleep. " At that time, the market traded in a small price range (for Flat), selecting from a trader gained in the last movement of prices. The longer the Alligator is asleep, the more he becomes hungry, and the more powerful will follow the movement of prices. While the Alligator is asleep, stay away from the market! Woken up, Alligator disclose mouth (Balance lines diverge) and starts to hunt for prey. Naevshis, Alligator again falls asleep (Balance Lines converge).

If the Alligator does not sleep in the market, there is upward or downward trend (production runs from Alligator):
if the price is higher feed Alligator, the trend is upward;
if the price is below the mouth Alligator, the trend is bearish.

Another useful feature Alligator - assistance in identifying markings Elliott waves. If the price is outside the Alligator mouth, the market formed by pulse wave, as if inside the mouth, then correcting.

Gator Oscillator - definition of periods of "sleep" and "bodrostvovaniya Alligator

Gator Oscillator shows the degree of convergence / divergence Lines balance.


Gator indicator appears in the form of two histograms:
histogram above zero shows the distance between the blue and red lines (jaw and teeth);
histogram below zero shows the distance between the red and green lines (teeth and lips).

All bars of each histogram are colored in green and red color:
Column painted in red if its value lower than the previous column;
Column painted in green, if its value above the previous value of the column.

The main purpose of Gator Oscillator - assist in visually determining the presence or absence of trend. With the help of visible periods of convergence and overlap Lines Balance - «sleep» Alligator - and during his «awake».


Fractal (phase space)

Fractals (Fractals) B. Williams - the first measurement of market

Fractal for purchase - a series of five successive bars, followed by the highest peak and it is for two bars with lower maxima. Fractal for sale - a series of five successive bars, followed by the lowest minimum and it is for two bars with higher minimums. Fractals for the purchase and sale may consist of the same bars.


Fractals submit the following signals:
if the fractal is higher than for the purchase of Zubov Alligator (red line), the pending order Buy Stop at the opening position should be placed at 1 pips above the maximum of the bar, which was formed fractal;
fractal if the sale is below the Alligator Zubov, a pending order Sell Stop should be placed at 1 pips below the minimum bar, which was formed fractal.

If the fractal to purchase an Alligator Zubov below or fractal for sale - above Zubov Alligator, then the transaction must be omitted so as not to feed the Alligator. Fractals are active, or until their «defeat», or to the emergence of a new fractal in the same direction (in this case the previous signal has been canceled, and the pending order is removed). Critical, where he was "astonished" fractal, ie, what you need to enter a bar in the market after overcoming fractal. If the bar is outside the Alligator Zubov, then the transaction is allowed.

Fractals - this is the first measurement of the financial market. Any entry into the market begins to overcome the fractal. Only after being overcome first fractal, we start to receive signals from other measurements (indicators B. Williams) to open new positions in the direction of the first signal. The signals from the future of fractals in the direction of the first transaction will also serve as a basis for opening additional positions.


The driving force (power phase)

Magic Oscillator Bill Williams (Awesome Oscillator - AO) B. Williams - a second dimension of market

Magic oscillator (Awesome Oscillator - AO) defines the driving force behind the market (second dimension) at the time of the last 5 bars, comparing them with the driving force in the last 34 bars.

Awesome Oscillator - the difference obtained by subtracting 34-periodnogo simple moving average, which was built on the central values of the bars (H + L) / 2, from 5-periodnoy SMA on the central values of the bars (H + L) / 2. The graph indicator appears in the form of histograms (Fig. 4).

Fig. 4. The use of magic oscillator (Awesome Oscillator) to determine the driving forces of the market

In the green painted each column, which is higher than the previous, and red - each column, which is lower than the previous one. Magic oscillator creates a signal for the purchase of three and three signals for the sale, which can not be used until such time until the first filling fractal to buy (sell) outside of the mouth Alligator.

Awesome Oscillator (AO): signals for buy / sell "saucer"

The signal for the purchase of "saucer" signal occurs when the histogram is located above the zero line, changing direction from downward to upward (Fig. 5).

Column "A" should be above the column "B" and can be any color. Column "B" shall be red. Column "C" (signal) must be green. Signal bar - a bar, where an alarm column.


After formation of the signal exhibits a pending warrant Buy Stop at 1 pips above the signal bar. The last signal on the purchase of "saucer" supersedes all previous (do not forget to delete the pending order after the lifting of the signal). For all types of signals of the rule: Buy only if the current column, green, and sell only if the current column is red.


Acceleration / deceleration (power phase)

The Third Dimension: Acceleration / Deceleration Oscillator (AC)

Indicator acceleration / Deceleration (Acceleration / Deceleration, AC) measures acceleration and deceleration of the driving force (the third dimension).

Suppose the ball rolling on the street (using Awesome Oscillator can determine its momentum). If the road goes uphill, the ball begins to slow down (ie it has the reverse acceleration), and although the Awesome Oscillator (AO) will continue to determine the driving force behind the ball, will soon come a time when the ball stops. To this point, the trader is not caught unawares, B. Williams suggested using the indicator Acceleration / Deceleration (AC) for the measurement of the acceleration. Before you change the dynamics of prices, change the driving force. Earlier change acceleration. Therefore, the indicator Acceleration / Deceleration - important part of successful trading.

In MetaTrader 4 histogram Acceleration / Deceleration (AC) - the difference between histogram Awesome Oscillator and 5-periodnym moving averages for the Awesome Oscillator:
MEDIAN PRICE = (HIGH + LOW) / 2
AO = SMA (MEDIAN PRICE, 5) - SMA (MEDIAN PRICE, 34)
AC = AO - SMA (AO, 5)
Where:
MEDIAN PRICE - median price;
HIGH - the maximum price of the bar;
LOW - the minimum price the bar;
SMA - simple moving average;
AO - LED Awesome Oscillator.


Unlike magic oscillator AB crossing the zero line indicator of Acceleration / Deceleration (AC) signal is not. But still can not buy, if the column is red, and can not be sold, if the green column. It also signals Acceleration / Deceleration (AC), the trader should be ignored until such time until the first filling fractal to buy (sell) outside of the mouth Alligator.

Acceleration / Deceleration Oscillator (AC): a signal to sell above the zero line / sell at below the zero line

The signal to sell above the zero line "indicator of Acceleration / Deceleration Oscillator (AC), if a two consecutive columns with higher values than the most recent lowest column.

The signal to sell below the zero line "Acceleration / Deceleration Oscillator (AC), if a two consecutive columns with lower values than the latest greatest column

If the AC histogram below zero, the signal to sell below the zero line "is formed when a column of three consecutive higher values than the most recent lowest column.

Buy Stop Order is placed at 1 pips above the maximum of the signal bar.

If the histogram Acceleration / Deceleration Oscillator (AC) above zero, the signal to sell above the zero line "is formed when a column of three consecutive lower values than the latest greatest

Zonal trading (fourth dimension of the market)

When the driving force (Awesome Oscillator - AO) and acceleration (Acceleration / Deceleration - AU), directed to one side (both green or both red) - this means that the driving force not only moving in that direction, but also accelerating. This principle is based trade zone (fourth dimension B. Williams).

If the current columns of the AU and AO green, it shows the green zone. If the current columns of AU and AB red, it shows the red zone.

In order to open new positions on the purchase of green area (at the sale in the red zone) must be at least two consecutive green (red) bars, while the closing price of the second bar must be above (below) the closing price of the previous bar.

However, after five green or red bars in succession, we cease to "add", as more than 6-8 bars, painted in one color, are rare.

In the case of the fifth green (red) bar should be set the Stop Loss order at 1 pips below the minimum (above the maximum) price of the fifth bar. If the next bar stop-order is not executed, then you need to change the level, which at 1 pips below the minimum (above the maximum) price of the sixth bar, etc.

The fifth dimension of the market: Trade Balance Lines

Balance Line - this line, which would have been the price, if no new information (Chaos), which has an impact on the market at this time. B. Williams tried using complex mathematical calculations and computer simulations to find the line balance and to build a histogram, showing the distance between the price and the line balance. To his surprise, it turned out that this distance is very good and with a sufficient degree of reliability is described by the histogram Awesome Oscillator.

If the present Line of balance in the form of the mountain top, when the market receives new information, the price is easier to withdraw from the line of balance, than to come back later to it (easier to go downhill than up to it ").

In order to understand the fifth dimension and learn to deal Lines balance carefully examine Fig. 12:

Buyers were weaker at the bar "b" as compared to the bar "a". This proves a lower maximum bar "b".

Why sellers were stronger at the bar "b"? Because the market was new information (in the figure indicated by the dotted squares), which altered the balance of power.

If buyers get the spirit and be able to lift the market (see the bar "c") above the maximum of the bar "a", it means that there have been dramatic change in the behavior of stock market crowd, which is a harbinger of the transaction in the fifth dimension.

Fig. 12. New information in panel prices

In our case, a bar "b" will be "basic." Thus, we come to the definition of "basic bar.

The base bar for the signal to buy - either the current bar (bar "b", which was not yet bar "c"), or the last with the lowest peak (bar "b" after the appearance of the bar with a higher maximum - bar "c "). The base bar for the signal to sell - either the current bar, or the latest with the highest bottom.

Formulate the first three postulates fifth dimension:

Study the chart, right to left.

Pay attention only to the maximum, if looking for a signal to buy. Pay attention only to the minimum, if you're looking for currently for sale.

Find the base bar: for the signal to buy (to sell) the base bar will be a current or bar, or the last bar with the minimum maximum (maximum minimum).

If you have a basic bar to buy or sell, you at least have passed their first half-way to commit the transaction in the fifth dimension market B. Williams.

The fifth dimension of the market: the signal to buy above the Balance

The signal to buy above the Balance If the price is above the balance, and we are looking for a signal to buy, we hope that the price will go "in front of the line balance, ie "to come down under the mountain"). Enter the new rule - Rule number 4:

To buy (sell) needed another new maximum (minimum) if you go in front of the line balance, and two new maximum (minimum), if you approach the line balance.

According to this rule for the appearance of a signal to buy, we need only to overcome the high price of the nearest of the previous bars with a higher peak than in the base bar. I'll try to explain this idea with the help of Fig. 13.


Suppose that on the screen we see only the bar number 1 and all previous ones. № 2,3 bars, etc. yet. At this point the bar number 1 begins to fall under the definition of the base bar to buy. This will be the current bar, which is lower than the previous high bar.

The essence of the signal above the line on the purchase balance is that we hold pending order Buy Stop at 1 pips above the maximum of the bar, which was preceded by the base bar (ie bar number 1 in our case).

Back to Fig. 13. The graph is a bar number 2, whose high is lower than that of the bar number 1. Automatic bar number 2 becomes the base bar. We cancel the pending order exhibited in the previous case and exposes Buy Stop at 1 pips higher than the maximum number 1 bar (this bar is a basic pre-bar - bar number 2). The same procedure is repeated at the bar number 3 and at the bar "B". When you see the bar "B", it becomes a basic bar, and the pending order is located at 1 pips higher than the maximum number 3 bar.

Then a bar number 4, but the bar "B" continues to be basic, because if you look right-left, it will be the first bar with the lowest maximum. Maximum bar number 4 is lower than the level we have put pending order, so we are not yet in the market. Appears bar number 5, which also did not change the basic position of the bar and did not fulfill our pending order. But the appearance of the bar number 6 with a maximum greater than the maximum of the bar before the base, has resulted in our Buy Stop worked and we have entered the market for "a signal to buy above the Balance."

The fifth dimension of the market: the signal to buy below the Balance

Obviously, the buying below the Balance, we hope that the price will go "to the line of balance, we would" climb the mountain. "

So, we need more than one maximum, as much as two to get the signal to buy below the line balance. Let us turn to Fig. 14.


Suppose an bar "B". This bar is basic, because he was the first, if you look right, left, a bar with a minimum peak. Now to get the signal we need to find a maximum of 2 on the left side of the base bar "B". Bar "3" will be the first of them. Bar "2" would not meet our criteria, because its maximum below the maximum of the bar "3." Bar "1" will be our second peak, which we are looking for. Its high maximum above the bar "3." Therefore, we place the pending order Buy Stop at 1 pips above high bar "1."

The appearance of the bar "4" has made changes in the overall picture: the base bar is still "B", a pending order has not yet been executed. Bar 5 also did not change. But at the bar, "6" worked our pending order and the fifth signal is measured on a purchase below the Balance realized.

Bill Williams has suggested several ways to set the Stop Loss orders:

If the market trend exists, the position must be closed if the closing price bar crosses the teeth Alligator (red line).

In a rapidly moving market, as the level for the Stop Loss order using Alligator Lips (green line). The market recognizes the rapid, if the angle of inclination angle higher prices of green line. In this way, and earlier at the end of the bar Stop Loss order is moved to the level of red or green line of the next bar.