I’m afraid that my chart making skills will need some polishing up. Here is an effort at illustrating a thesis with a graphic. I’ve created the following chart with MetaTrader 4 * in a 5M perspective about of the USDCADi** market
Looking at the chart, it may seem that - in this morning’s trading on USDCADi, up to the duration illustrated - that there’s a certain periodic kind of waveform of the market rate, over time - like a continuous sine wave, or a continuous cosine wave, but as plotted across each individual “Tick” of the discrete OHLC*** data in the chart.
In regards to the market rate, I understand that the “Sine Wave” as such represents a series of market-rate reversals. I believe that when the market is stabilizing within such a periodic erm, waveform, that it may be possible to incorporate such observation into a manner of a narrow-frame technical analysis.
My chart is not a perfect illustration of the thesis. In this paper trading, ut seems that I had - at one point - dragged the bid’s actual … but paper-traded … stop-loss marker, thus modifying the paper bid – when what I had meant to drag with the mouse cursor was, instead, a nearby line on the chart. So, I would caution anyone about working with chart lines at points near any bid limits in any open positions - that with the “Click to select” option**** enabled for the charts, in the MetaTrader options settings, one might accidentally drag a part of a bid along the chart when the chart lines and the bid lines are very close together.
I had not known that such an “OOPS” was possible, until this day’s session in paper trading. Surely, in any live trading, I should wait until all bids are closed before modifying any charts on the graph. I’m trading with a demo ECN account on TradersWay.
The idea, which I had hoped to illustrate despite that S/L Drag-and-Drop “OOPS”, I might try to summarize it as follows:
[li]That if the market is oscillating regularly …
[/li][li]… and one may estimate a median value between the market-rate high/low peaks in the oscillation …
[/li][li]… then one may endeavor to bid Sell and set the stop-loss and take-profit limits such that for the stop loss, may allow for any reversal at the top of the chart - in a Sell bid - thus that the stop-loss for the sell bid could be maybe a little higher than the periodic crest of the market rate, and such that for the take-profit limit, it would be also a little higher than the low-rate peak, such that might ideally serve ensure that the Sell bid exits at-or-near the low rate before the market rate reverses
[/li][li] Contrarily. for a Buy bid, one could set the stop-loss at lower than the low-rate peak of the oscillation, and one could set the take-profit rate at a little bit lower than the high-rate peak of the oscillation. Thus, ideally it could allow for a reversal at the low end, and could serve to ensure that the Buy bid exits at the high end.
Essentially, this would describe a positive offset for sell bids, and a negative offset for buy bids, as in relation to the demonstrated periodic ‘high’ and ‘low’ limits of the oscillating market rate.
I believe it’s fairly simple in an intuitive sense. I’m fairly certain that it could be easy to code into an expert advisor. Personally, I’m simply glad I’ve figured out any way – or anything towards any way – to make well of the constant market reversals.
Of course, the entry rate for each bid could be set at the median rate between the high and low limits of the demonstrated waveform.
I’m sure there’s a lot to learn in regards to technical analysis of broad trends. Presently, I’m trying to understand the realtime data I’m seeing in my demo ECN account. I hope that my explanation might not be too opaque, as to this proposed thesis.
- All copyrights apply
** It seems that the ‘i’ suffix in the symbol, USDCADi, may indicate that it is an ‘intrabank’ symbol i.e that it is a symbol being traded on the ECN network
*** as in regards to a type of datum representing a set of market rates at Open, High, Low, Close points in a single time frame - essentially a kind of data tuple, as may be ploatted onto a Candlestick Chart or a Bar Chart
**** In the MetaTrader 4 GUI, there in the ‘Options’ dialogue window, then on the ‘Objects’ tab, there’s check-box labeled ‘Select object by single mouse click’.