I don’t know if any of you are familiar with Bill Williams’ Profunity Trading System (Trading Chaos) BUT I am trying to program a calculator that I can use to ease my order entry and stop order placement (yes - in a previous life - or business - I used to write software).
I have been wracking my brain for the past three days and I just cannot get a calculation to work FOR EVERYTHING i.e. commodities, forex, indices, etc. etc.
One part of the system requires that you enter a buy stop order one tick above the last valid up fractal and a sell stop order one tick below the last valid down fractal (don’t worry - if you don’t know about this - help me with the calculator and I’ll give you a system that will knock your socks off).
Regardless of the system used the calculation still remains the same.
Here is the problem:
Let’s use the Dow Jones Industrial Average as an example:
I need to place a buy stop order one tick above the value of let’s say 13700.
So the calculation is 13700 - SPREAD + PIP VALUE
which is 13700 - 6 + 1 which equals 13695. Easy right!
But check this out:
With Silver for example:
I need to place a buy stop order one tick above the value of let’s say 13.84.
So the calculation is 13.84 - SPREAD + PIP VALUE
which is 13.84 - 0.03 + 10 which equals 23.81. Right? WRONG!
23.81 IS NOT one tick above 13.84 it’s more like 100 ticks!
What am I missing here?
There must be a formula that can be applied to any forex pair, commodity, etc. etc. that will give you the value of one tick (PIP) - I just cannot seem work it out.
Help me with this and I will upload the calculator, explain the system (and provide links to the original system by Bill Williams, and give you my take on it and a variation that I have been working on that is by no means ‘get rich quick’ but more like ‘eventually get rich for sure’).