OK,back to writing,we are at an interesting market crossroad,no trade today.
1-WHY DEFINE THE SIGNAL BASED ON 4H TF?Because it is very representative of the actual marlet movements,having short and long interesting minitrends,WITH ACCEPTABLE RISK,so,the market noise,USUALLY, does not imply a level of risk(unfavourable price movement against trend direction) higher than 100/130 pips,with related rewards usually ranging form 300 to 1000 pips,please check basic simba3.gif attached.
2-WHY USE SATL AS A NOISE FILTER? Well it is not necessary,you can use,among others NONLAGMA,HULLMA,JMA,etc,etc,but,in my experience,I have found that SATL is more responsive than the usual others,giving advanced signals for entry/exit and keeping you on the trend.I am sure that people intimately acquainted with NONLAGMA,etc,tweaking and changing the paramaters will probably arrive at a similar result(or better) than with SATL,if,so,please be so kind to post them. Please check basic simba2.gif attached.
3-WHY WORK ON A LOWER TF?Because the MTFSATL ON 4H SETTINGS,will allow you to trade ,on ANY lower TF,1M,5M,15M,30M,..your favorite pet oscillator/macrossover/price-ma cross..WITHIN A SECURITY NET,you will be able to take the signals that go with the trend,entering at oscillator favorable points.Please check basic simba4.gif and basic simba5.gif as an example of different combinations,By the way,basic simba5.gif looks interesting..but RISKY.
4-WHy USE WILLIAMS %R? I like it
....And it works.It is very responsive,and taking into account the fact that we ,usually, trade within a trend being responsive is a great advantage for an indicator(if trading against the trend excessive reponsiveness by an indicator will give numerous false signals).The settings at 90 periods for 5MIN TF have been calculated using the DIGITAL FILTER GENERATOR first for the dominant DAY period (nice peak at 93 periods),and second for the inmediately higher TF -for 5M,the next higher Tf is 15 M-where we have a nice peak at 90 periods.you could use only 5M period to find a peak at 73 periods,and it will be theoretically right,but I have found 90 periods for 5M to be very consistent and reliable,and consistency is what we are looking for.
So,there is nothing new under the sun,my simbasystem is just the same old story of " buy dips in a rally-sell peaks in a downtrend "..well,my friends,what more can you ask for? and..How many consistently profitable traders do you think are there that use a different strategy..yes there are top/bottom pickers,and break out traders,and some of them survive making money year after year..but this is the exception...the majority of profitable traders use a variation of this strategy..the majority of the others are the ones that pay our bills.You decide to what group you aspire to belong..
Since there is more in the universe than what we can grasp with our philosophy,dear friends,I have to tell you that the difference in my approach-my raison d`etre-lies in the fact that the indicators we use have been chosen because I have found them to be the best both at determining the Trend and at timing profitable entry points..which is,of course being open to discussion,and I will be the first to adopt any new improvement..if consistent.
By the way my GBPUSDsimba system is more complicated-an indicator check to avoid"change of trend" whipsaws-and several different timing indicators,but,for a few days let me start from the beginning,the basics,and once you discover that they can make money consistently,we will advance.
In my next post I will include the MTFSATL indicator so that you can use it with the standard WILLIAMS% R included already in MT4 platforms.
Regards,
SIMBA