TMA&Cycles

Second Step:find decision making points

Once we have our main TMA Half length set to half the dominant cycle period,what do we do?

We add the supersignals indicator,a notorious repainter but very useful nonetheless,specially with cycles.

The key issue is that we set the supersignals to dominant cycle period,dist= 28(dominant cycle period too for GBPUSD H4) ,and wait until we get what you can see in the pic...Price has penetrated 1 band AND supersignals is indicating a cyclic low...OK,so,do we enter long here?...NO...This is just a decision making point,we have a confluence of bands penetration +28 bars low,so,it is obvious that we should be extremely interested in GBPUSD at this point in time...Now we have to decide what we do....Next Step

RECAP:With steps 1&2 what we aim for is to find decision making points...they usually lead to very good trades,but more work is necessary before deciding.

I have attached the version of supersignals I use,it allows the user to set the distance(dist) and equalize it to the Cycle length.

Regards

S

Step3:Embedding the bands

Now ,what we do is ADD a new wider band,to do so,we do the following...

1-Measure the dominant cycle length at the next higher timeframe(D1)...As you can see in the pic ,this period is 30 days.

2-Translate the D1 period to H4 period..30 days=180 h4 periods...

3-Set the halflength of the new h4 band to half of 180=90...

4-Set the new atr multiplier to approx square root of the periods ratio multiplied by previous(h4) atr... ..It is very easy ..D1/h4=6..so sqr root of 6 approx 2.5,previous atr was 2.0..so,now we set the new atr multiplier to 5(2.5*2)

As a rule of thumb,you use 2 ATR in your main TMA then if you want to embed it,you use the following ratios...you can tweak them by 0.5 up or down upon visual inspection.

If main is H1=2.0 ATR..YOU embed in h4=4.0 ATR

If main is H4=2.0 ATR ..you embed in D1=5.0 ATR

Do not use any tf(for the moment ) below h1.

RECAP:The red bands are 14 periods,2 ATR,the blue bands are 90 periods,5 ATR..and looks like we have spotted an interesting opportunity in the making.

I presume that they may be some questions,so,I will wait for them before proceeding.

Regards

S

Hi Simba,

For me really no questions you explained it very well, just want to thank you for starting this thread. One comment, or well maybe its a question, wonder if it would be possible to use TMA but have the half length controlled automatically by cycle period indicator/2 or have divisor be user controlled for higher timeframe use, guess it would be sort of an adaptable TMA Band.

Last step

Thanks for your comments,Mr Tools

I think that mladen is working on expanding the bands to the future,I don`t know about your suggestion...though I believe that having 2 sets of bands linked to the Corona cycle period at both actual timeframe and next higher timeframe would be interesting,IMO,projection into the future is prioritary.

OK,now,next step..what do we do?We had discovered a potentially good decision making point..so,now we take the distance from high to TMA cross(basically 1.6738-1.6438 approx) and project from TMA cross down..approx 1.6138+- 10% of total distance..+-60 pips..ok the low at the decision making point was 1.6132,so,GBPUSD IS IN THE REVERSAL AREA...so,now we wait for price action to enter,in this case the entry was done when the H4 bar closed above previous bar`s high..Gold arrow at the pic..Target is either the other band side or the blue centerline(TMA),I have chosen the blue centerline...SL is at breakeven now,so,we just wait...See the pic.

Regards

S

Question regarding cycle length

Hi Simba,

Thank you very much for your post. I have set up the indicators as per your instructions. However, i have one question. On my chart, the Corona cycle indicator on the daily timeframe shows 16 and on your picture it shows 30. What settings are you using for the Corona cycle indicator? The difference in the results must be due to you using different settings.

Thank you.

Settings

Thanks for your comments.

These are the settings I used for the D1 cycle on a h4 chart

extern int TimeFrame = 1440; //Time Frame in min

extern int Price = 4; //Price Mode (0...10)

extern color LineColor = Yellow;

extern int FuzzR = 255;

extern int FuzzG = 0;

extern int FuzzB = 0;

extern int VisualMode = 0; //0-DC+Corona,1-DC,2-Corona

Hope this solves the problem.

BTW...We are at decision making points in EURUSD H4 and EURGBP H4,both for shorts...price action still hasn`t confirmed an entry....AND...the EURUSD setup is very dangerous,why?...Look at the big blue bar,third from the right,the one before the last pink arrow...that bar has closed above previous highs(first pink arrow)entrapping shorts....so,2 situations can unfold,a running of weak hands stops with no continuation buying,and,consequently a decrease in price,or an effective trapping of the shorts at previous highs...a close above 1.4825 will do hard damage,and will probably lead to panic short covering,leading prices up.

Regards

S

Dubious Situations

When we have dubious situations,like EURUSD H4...we use trendlines....see pic...a close below the trendline will justify a short,a close above previous high will trigger short covering,so,depending on RR,it will justify a long(I will pass ,or just a scalp at m5 tf for 30 to 40 pips up,if you think trend is going to change...RR is not right for swing trades ),or ....better waiting for it to happen and then a cross down of the trendline to short ...Trading is situational my friends

Regards

S

SIMBA:
When we have dubious situations,like EURUSD H4...we use trendlines....see pic...a close below the trendline will justify a short,a close above previous high will trigger short covering,so,depending on RR,it will justify a long(I will pass ,or just a scalp at m5 tf for 30 to 40 pips up,if you think trend is going to change...RR is not right for swing trades ),or ....better waiting for it to happen and then a cross down of the trendline to short ...Trading is situational my friends

Regards

S

Got in a trade early this morning first off miscounted from low to center cross and got stopped out, then recounted found it was 9 bars from low to center instead of seven, then reentered at 9 bars for a nice gain around 30 pips could have been more but set TP 30 pips and went to sleep!

recounted

Mr Tools

Congratulations for your trade.

What was your first entry,stop and tp?....looks like the stop was very near your entry,from the pic.

Regards

S

Thanks Simba,

First entry was at 149.219 stop loss way too close at 149.386 (at the time was outside the outer band) and TP was at 149 (just went for 20 pips at the time because resistance was there). When I place stop loss on Renko chart just a 20 pip stop loss seems so far away, but only using 5 pip blocks for now, will slowly change to larger box size using ATR as you stated in that other thread!