Forex Trading - View Single Post

ValeoFX · #2 (**permalink**) 02-06-2007, 12:33 PM

UPDATED IN POST #314 ON PAGE 32 (10th April 2008)
FIRST AND FOREMOST:…….YOU NEED A DEDICATED 5M_CHART. (No switching between timeframes!!!)1). ZZ_4_TF_XO - Settings are: 60/6.5; 30/6.5; 15/6.5; 5/6.5 --- For better visual effect, I add in a level @ ±3 where 3 timeframes have met the requirements and we await the final one. CHANGES HERE IN KirPER SETTINGS. NB
2). ZZ_MTF_X0-2-MOD which is set to 240 / 4.5 and 240 / 6.5 and run it separately. NEW IMPROVED INDICATOR and CHANGE in KirPER settings. Thanks to my trusted friend Gerhard (DayTrader), for constructing this indicator. You are much respected and appreciated. NB>>>> Preferably trade in the direction of the XO-2. The reason for the change in TF and settings is that I have found an excellent opportunity to enter trades when the H4 changes colour, especially after a retrace.3). Woodies Double_CCI set at 13/5. (Note the settings)
With the following levels added: 165; 300; 400 in both directions of course.
I further colour them so that I can see them immediately -The ±165-levels are WHITE so that you can see when the CCI-5overheats.The 300-level I colour Magenta and make it a “broken-line” as it is the first level where the “TREND-CCI”(13) WILL stop when it "overheats".The 400-line is Solid Magenta and usually this is where the 13 "overheats completely during normal break-outs" (it may run to 450 during announcements though) and it is advisable to get out at the top of this overheating as the direction will change after this candle.4). CCI_Cross set @ 5/13/13 to show you on the candles, when the CCI had crossed. 5). [/color]WATCH THIS SPACE, I AM JUST WAITING FOR AN OFFICIAL APPROVAL FIRST.6). RSI-5. After I started using the RSI-3 setting, I came across research by Larry Connors $ Ashton Dorkins confirming that the RSI-3 and 4 is actually “better” in some respects especially in showing divergences, etc. So, I started out and tested the original idea of RSI-3 and ran a second RSI with settings of 4 and 5 respectively until I finally feel that the RSI-5 (FIVE) is what I need (personally) on the 5M_Chart.After successfully LIVE-trading the new version of the RSI-5 on the 5M_Chart together with its improvements, I am happy to inform you that I have found the overlay of a 14-RSI over the 5-RSI to be extremely effective for change in direction. Beauty of this method is that you can "back-test" the results as it does NOT repaint at all.Whenever the RSI-5 crosses above / below the RSI-14, the directional change is in effect. What is also of extremely good value is the fact that in a retrace, IF the 5-RSI does NOT cross the 14-RSI one knows immediately that the ensuing direction is still strong - its like the ZLR on the CCI. Excellent for early entries or re-entries!!Furthermore, I have added a Z_MTF_RSI set @ TF 60 and setting @ 5 over all of the RSIs so that you can see where the 5-RSI is on the H1-chart and what I find is that whenever the RSI-60M is above the 50%-level, it confirms the long signal and vice versa when the RSI-60M is below the 50%-level. I attach this indicator here for your perusal and use, thanks to my friend Gerhard (DayTrader) for his assistance in helping me to achieve my desired goal with the RSIs.Included in the Zip-file is the DOTTED-version of the RSI which you may drop over the RSI_Label – I use levels 90 / 50 / 10 in Red-dotted-lines on the RSI_Label set @ 5 and I use levels 76.4 / 23.6 in Yellow-dotted-lines where you will notice the market often turns after a retrace.
(7). #RSI_ALERT (*****) - my sincerest thanks to ShadowWz who specially tailor-made this indicator for me, one of many that I use – you are an unbelievably generous and talented person. This indicator will show you clearly when the RSI-5 is overheated without you even looking at the RSI. (Magenta-arrows) However, I do NOT recommend that you delete the RSI-5 from your set-up, as you need to see how the RSI is behaving rather than waiting for the first signal that it has overheated.
An observation:..........we do NOT need this indicator on the M5-chart!! You need it on the H1!! Reason being that the trade may carry on for 3 - 4 more candles with the RSI overheated on the M5, BUT the H1 is still not exhausted!! So I suggest you take it off the M5, BUT retain it on the H1-chart.
(8). Williams %R set at default (14) on top of the RSI and I want you to back-test this combination so that you can see why. My reason for doing it being that the %R has the uncanny ability to show a directional change before anything else!!The best trades are when the %R has gone to its extremes and taken the RSI-5with it; when the trade then turns, it usually is a good one, but often the 2 do not follow each other and you will see that it indicates that that particular move, is just a retracement.Please note that I did NOT include the %R in the Template as I do not use it anymore. It remains however a very valuable tool.Just a suggestion:…….try this on the 60M-chart as well (the RSI-%R combination) so that you can see when the 60M is overbought/sold and a retracement is imminent. I have switched to the RSI-2 on the 60-M-Chart. Excellent for divergence and will show you when not to enter when “overheated” – i.e. the trade will not continue.9). Asctrend1Sig_noSound @ 5 to assist in non-trending markets.
10). The following EMA's set on CLOSE:8-EMA (mine is dotted) WARNING SIGNAL CHANGE) - I have had newbies mentioning that they do not want to "give back" pips when positive and waiting for the 15-EMA scared them. So I started trading the 8-EMA live and as long as the price does not close above/below the 8-EMA, I stay in the trade and let me tell you, this works. Keep your Stops on the 28-EMA for "good measure", but follow the 8-EMA and you will not go bust. 28-EMA for regular stops. Best all-rounder for STOPS. (ADD)
60-EMA ENTRY AND KEEPS YOU IN. Also where you put your Stops ± spread for longer runs.
100-EMA ( I find that the price often either stops here or bounces on it )
330-EMA DIRECTION – (CHANGE)660-EMA as the TREND(660-EMA represents the 55-EMA on the 60-M chart. I learned something here from Dr. Constance Brown first and then from Nina who used the 50 on the 30M TF, thx.)11). SDX_TzPivots[1], arguably the best Pivot calculator.
ENTRY RULES:1. As soon as the 4_TF_XO signals an entry (that is when the bars become solid GREEN / RED, enter on the OPEN of the SECOND candle, providing that the second candle is not opposite to current direction in which case the XO_Bar MAY have retracted back to Line-3 on the indicator in any event. Also, CRITICALLY IMPORTANT…………..2. The RSI-5 should be <90% for a LONG and >10% for the corresponding SHORT.3. The Double_Woody_CCI- is in "agreement" - that is, IF the CCI-13 is >300, don't enter..EXPLANATION: When the “CCI_13” reaches the 300 level, a retrace is inevitable, (but the price may sometimes continue to rally) allowing one to get a "better price". When it hits the 400-level, it is usually time to exit immediately, depending on what the H1-TF tells you.(I suggest that you use the 28-EMA as your guide in such a case as the price may retrace back to the 28-EMA before continuing in the rally’s direction. Best to enter on the CLOSE of the last candle that confirms the trend.)4. The Stochastic set @ 13/4/8 is not "overheated" (>90 and <10)*************WATCH THIS SPACE *****************
5. It is advisable but NOT imperative that the ZZ_MTF_XO2-MOD (240 / 4.5 and 240 / 6.5) be in the same direction as the 4_TF_XO. . NB>>>>> I STILL prefer that the AscTrend signal be in place, whether it appears on the candle of entry or prior to that.EXIT RULES:After your ENTRY, follow the 8-EMA (close) as the guide as to where the trade may be exhausted; as long as the price does NOT close above/below the 8-EMA, you stay in the trade, no matter what the oscillators are telling you. Stop ± spread from 28-EMA.1). WHEN THE PRICE CLOSES ABOVE / BELOW THE 60-EMA!2). STOPS @ ± spread from 28-EMA.This may sound like a contradiction, (the 60-EMA vs 28-EMA above) but what you should look at is the position of the H1-chart in relation to whether the trade has run its course or not. If you see that there is scope on the H1 chart, then move the stop to the 60-EMA so that you can maximise the trade.The following posts are important if you want to read about "How the XO-works" in Post #241 and P.25. in the FIRST THREAD.Also, Woodies CCI-info at #115 on Page 12.Finally the XO-5 on #211 and Page 22 for those interested.