Quote:
Originally Posted by nikolaou
ur synergy method sucks. why dont you actually try reading how to properly do it, then you would see the utility of the "bollinger bands". They are actually volitility bands and are quite useful
|
Nikolou, after going through the Synergy Trading Method manual and trying out the method, I agree that the volatility bands are useful; you want them to be expending when you enter, and you also would like the TDI RSI to be crossing the upper band (for a long entry).
I stand by my comment that Chaikin's Volatility is not particularly useful. As you must know from reading through the other forum, Derk Wehler tried for a long time to get some utility out of Chaikin's in his Synergy EA, and he finally decided to delete the Chaikin.
The Synergy does seem a good system for riding a trend, but my trials--admittedly limited--do not convince me that the Synergy, for all its good points, is comprehensive enough to be used as a stand-alone system. Wehler's recent verdict--after what must have been a humongous expenditure of time and energy in developing his EA--seems to confirm my admittedly thinly-based opinion: "I believed for a long time that there must be a settings combination that would work (and am not convinced it's untrue), but the tests I have run just haven't shown much promise. So if anyone finds settings that make good money, let me know and I'll re-open the case..." There are no other Synergy EAs that I know of, although Dean Malone is said to be contemplating one.
The problem, I think, is that the Synergy Method does not discriminate adequately between trending and non-trending conditions. Heikin-Ashi candles give an immediate picture of the trend but not a longer-term view. The same is true of the Price Action channel. The only Synergy indicator that measures the underlying trend is the Market Base Line, and as you can see in the accompanying chart, this does not provide a very definitive meaure.
In view of the above, I do not think that blindly following the Synergy Basic Method would be a good risk. However, as the chart below suggests, I believe the Synergy could be combined with another indicator--one optimized to follow the trend--and that the two methods would then work synergistically (whoo, I love that word; Ithink I'll take it to bed some night) to form an excellent trading method. Either the Ichimoku or the ADX woud seem to do the trick, although ADX is the more definitive for this particular purpose. For example, in the chart below, the consolidating price on the left side of the chart broke out of the kumo, indicating the possible start of a trend, but the ADX swooped beneath both DMs and then rose to break 18, which is a more definitive indication of a trend.
Note that the ADX entry signal, confirmed by the Ichimoku, came on the same candle as the Synergy signal. Either method, depending on one's preference, could be used as the primary one, with the other as confirmation.
During the progress of the trade, quite a good picture of the trend is afforded by the relationship of the HA candles to the PAC and the relation of the TDI RSI to the TSL, the MBL, and the relevant Volatility Band line.
My opinions of the Advanced tools are noted on the chart. Another quote from the other forum (this one not from Wehler): "BTW, I don't like Advanced Synergy. The basic one is enough for analyzing, and the more indicators you have on the chart, the more you'll be screwed with them. Dean Malone says that Advanced tools give you more info about the market. But I guess you can get all that info from basic - Heiken Ashi + SMA + TDI." I agree, with reservations. The Continuation tool is of some use in assessing the progress of the trend, although I prefer the RainGull Spectrum (Google it). I put both on the chart. The Dymamic Support and Resistance, also on the chart, seems also to be of some use in the same manner as a Pivot Point level. I coud not get Range Factor to work.
My overall impression is that the Synergy Trading Method is good as a tool for manually trading but that it is not entirely sufficient unless you combine it with one or more indicators that are more representative of the underlying trend. Also, the piercing of the PAC seems too tight as a stop loss and, as the chart in my prior post showed, is prone to cause a premature exit. The SL perhaps would be better left to another device, such as 1 or 2 ATRs below the kijun sen of the Ichimoku.
Note that the Synergy gave the same exit as my other indicators, although my experience shows that the 100 level of a Fibonacci Expansion, if one can be drawn, should always take precedence. And one additional point: Divergence is the strongest signal in technical analysis. If it says that a change in trend is coming, you can bet your bippy that it is. We just don't know when, as divergence is a blunt instrument. It can, however, tell you that you should exit on the first indication. A good tool for showing divergence with price is the MADC histogram.
My verdict is that the Synergy Trading Method seems excellent if used manually and conflated with a more trend-conscious indicator.
Linear Mode
