btw 923 pips in one day holy sh*t but i hope you dnt give it away remebr if its in your account it is your money not the houses!!!
Second arrow when histo is about to cross.
okay it was maybe too late for me yesterday… i do understand this now but still have a few questions and could you please review my screenshot and my calculations, so I know that I am doing things correctly?
Screen shot attached.
Time frame= H4
Price= 1.5559
ATR= 0.0059
Macd cross= 0.0428380
1-0.04= 0.96+1= 1.96
1.96x59= 116 pips
SL= 1.5559+0.0116= 1.5675
T1= 116x1.15= 133 pips
T2= 116x1.30= 151 pips
Is that correct?
My questions:
-
I read through this thread multiple times but you keep on switching time frames and also you mentioned that you would change the macd cross formula depending on the time frame. Maybe you could explain this more in detail?
-
Does this technique work with all the majors or only EUR/USD and GBP/USD?
-
do you only look to get into a trade if the macd cross has already reached 5% before? For example if the highest point before the crossover was only 2.8% then you wouldnt consider to enter?
-
Do you use the ATR indicator only to determine SL or did I miss something and you use it for something else too?
Thanks so much!
yeah i just gotta set my mind dont get in early and wait for you indicators and the system to show entrance dont enter on anticipation which is what i tend to do when i get ****y 
everything looks good
My questions:
- I read through this thread multiple times but you keep on switching time frames and also you mentioned that you would change the macd cross formula depending on the time frame. Maybe you could explain this more in detail?
yeah this will work on many time frames just as will everything else it just looses accuracy when you get down to the noise level… but rarely ill get in on so 15 min or 30 min charts
- Does this technique work with all the majors or only EUR/USD and GBP/USD?
this will work with anything just note youll just wanna stay on longer charts.
- do you only look to get into a trade if the macd cross has already reached 5% before? For example if the highest point before the crossover was only 2.8% then you wouldnt consider to enter?
modify the formula with clevel so that your range will be 5 to -5% clevel will change the range and clevel numbers without changing the actual histogram.
- Do you use the ATR indicator only to determine SL or did I miss something and you use it for something else too?
Thanks so much![/QUOTE]
[quote=“pipynotstockings,post:106,topic:17733”]
modify the formula with clevel so that your range will be 5 to -5% clevel will change the range and clevel numbers without changing the actual histogram.
[/QUOTE]
Okay thank you. Did I change the clevel correctly by going to macd cross properties and then by “Inputs” -> “Clevel” from 10 to 5?
And could you answer the number 4 question? I think you forgot about it… thank you.
yeah atr just sl/tp
youll wanna change clevel so that the range from top to bottom of the indicator = 5 to 5
great. did you do any trades today?
I missed out on the EUR/USD this morning. Do you sometimes get in later or does it have to be right on the crossover?
right on .5% for now once you get use to the system more you can relax and trade on changing slope but for now try to stay rigid to the system is best.
I actually didnt trade today cause a had a really good last week I pulled somewhere around 2000 pips for the week so im taking some of this week off and relaxing watching movies being a bum haha.
Is anyone trading this system? I would like us to post charts of trades taken, so we can see what went good or wrong. I’m traveling right now so will not have time to use this system until next week, nevertheless, on Monday will start posting some charts of trades taken, would like to know if someone is planning on using this system as well.
Hope it’s OK with you pipynotstockings.
yeah ill post mine to and explain them its probably easier that way 
Strength 
this is my favorite part. statistics! yay!
if you havent noticed yet this is just a entry exit system based on the macd in conjunction with price action.
and this ladies and gentlemen is called MARKET PROFILE
(see attached picture called MP2.png)
In this picture you see the market differently then the normal bar chart way this way it shapes the market by price through time by period… for each period :)… emmmm good stuff…
why it important to view the market this way… because notice how the periods look… they look sort of like this
(See attached picture called BC3.png)
when you look at this… this is a normal distribution chart aka a bell curve…
this group area by number in percentage of occurrence. the hump here in the middle is called the VALUE AREA while the top called the Sell tail is the unfair high which gives it the name sell tail because when you hit the top you should short sell the probability because it is an extreme or an outlier…
and the bottom called a buy tail for exactly the same yet opposite reason of the sell tail.
so if people are watching these tails what’s their purpose…
(see picture BC1.png)
Notice at the top the sell tail is noted as the advantageous long term sell position… whats that mean it means that you found the area were it would be most to the advantage of the long term seller to enter a position. same with the bottom… that means outside of the 70% value area… is were the long term trader has power. inside the 70% value area the short term trader has power.
This is a normal trading day
(see attached MP1.png)
Im sure you can already see the implications of viewing the market like this.
but pipy this is good but i use mt4 i cant do this well i didnt write this code BUT ive attached a Ex4 file that will do this for you in mt4 just place it in your indicators folder.
ok pipy why does this stuff matter…
well the way i see it strength can be derived from the attractive power from the outliers to the value area when macdcross crosses in an extreme and moves toward value area.
will continue next post…
well actually i cant attach the ex4 file because babypips wont let me and i dont know the code so well figure something out. but for now you can look at the pics i attached.
well actually i cant attach the ex4 file because babypips wont let me and i dont know the code so well figure something out. but for now you can look at the pics i attached.
you can right click it on the ex4 file and
click send to
then click compressed file
this will convert it to a compressed (zip) file so you can attach it to your post that way
you are the man!.. soooooooo i attached 3 of them the one levelsensor uses alot of cpu and ram
market profiler v2 i think is best
level_sensor_116.ex4.zip (3.38 KB)
market profile.ex4.zip (5.81 KB)
market profiler_v2.ex4.zip (5.54 KB)
Alright chaps…just wanted to say cheers mate for all the hard work that you’re doing. This is a class site in my opinion with educated and informed discussion, nice one…
I work in the city and know a fair bit of finance theory, but this has been enlightening to say the least! Am making my first forays into the forex world.
Pipy I got all of what u say about the trading levels of 0.5 to 3%…this all makes perfect sense as prices diverge from the cross the trend gains momentum until the gains reach an optimum of the 3% and then dwindles away…all those hours of testing uve done to confirm this figure is brilliant…
However if anyone can just enlighten me on the scaling issue id be grateful (pip i know i emailed u about this but i thought id throw it open rather than bothering you)
specifically…the formula is D/P *100. Now if you introduce a scaler of 10, 0.1, 0.01 whatever, ur actually changing the percentage so that its no longer 0.3%., its 0.03% or 30%.
But doesnt this change the whole model? If you’re changing the scales but not changing the histogram that means that for the same data set nothing has changed, only the numbers on the side. Why have any numbers on the scale at all? if ur just going to trade on the cross and ur artifically changing the clevel indicator to make it READ -5 to 5 (even though eg on USD JPY its like 71 to -60) even though the histo wont change, what are the numbers there for?
Does anyone see what i mean, or shall i just jog on?!
cheers
Oz
[QUOTE][Does anyone see what i mean, or shall i just jog on?!
/QUOTE]
i see exactly what you are saying and im glad you asked because it has been on my mind too, but I haven’t been able to word it. I think you are onto something. it does seem to be the histogram in relation to itself rather than the specific levels are what is important another words the change of clevel in relation to itself, but i hope pippy can answer this and help clarify it for us.
thanks
I work in the city and know a fair bit of finance theory, but this has been enlightening to say the least! Am making my first forays into the forex world.
Pipy I got all of what u say about the trading levels of 0.5 to 3%…this all makes perfect sense as prices diverge from the cross the trend gains momentum until the gains reach an optimum of the 3% and then dwindles away…all those hours of testing uve done to confirm this figure is brilliant…
the .5% to 3% from the initial build applies to equities the reason for this is initially should be used for entrance if the equity is moving in consolidation you wont get false buy sell signals 2% is the best level in equities because this shows power from an extreme to move to the value area or from the value area to an extreme. where you exit of hitting a price level from that level of significant crossing…
forex is different cause these rules dont apply because in FX price change because the macd - sig line wont give you a variable that hits those numbers consistently, and even when it does you would exit on a predefined target from 2% in forex price moved more harsh in trends because its a trendier market with lots of manipulation. tho we wont get into that. but in forex the best entry exit is by not assigning a norm sl /exit and tps like most.
this system says lets look at a bell curve as percentages. as price moves up and down this bell curve it builds the value area and extremes as this accumulates you know when you enter and exit due to %ages so we take this same bell curve and we put numbers on it… this is the idea… at the top of std 2 to the value area known as 95/2 or 47.5% section of the bell curve were the accumulation of PA sits. on the top of std2 we place the number .5 and in the value area we place the number 3… so if price is comming from an extreme from below and hits .5 then moves to the value area it will hit 3… this is the same idea modified from the paper refining the MACD… the windows frames exactly are what? well it varied based on the clevel we define… a larger frame is like stretching the bell curve out longer than it was before. making it longer… this means that IF you keep .5 to 3 it move 3 from the value area to below the value area and .5 higher off the extremes making the chance that if its moving up and hits .5 it will move to 3.
However if anyone can just enlighten me on the scaling issue id be grateful (pip i know i emailed u about this but i thought id throw it open rather than bothering you)
specifically…the formula is D/P *100. Now if you introduce a scaler of 10, 0.1, 0.01 whatever, ur actually changing the percentage so that its no longer 0.3%., its 0.03% or 30%.
in this way you see that its not really a percent as it is if you dont modify c level but if you do you have to change and clevel is now 10 than to keep those % you need to x’s the clevel by that number to get what the same number would be. so with clevel =10 take .5 * 10 = new .5% clevel now .5 is now 5 but this wont increase your chance of success but clevel = 10
and still being .5 to 3 will because you decrease movement area which in turn takes only a piece of the momentum movement thats the strongest and thats where you live and trade… when we talk about understanding MP and PA youll see where the power for the trade exists so you can set your window to those settings then place the .5 to 3 in to increase likelyhood of success…
But doesnt this change the whole model? If you’re changing the scales but not changing the histogram that means that for the same data set nothing has changed, only the numbers on the side. Why have any numbers on the scale at all? if ur just going to trade on the cross and ur artifically changing the clevel indicator to make it READ -5 to 5 (even though eg on USD JPY its like 71 to -60) even though the histo wont change, what are the numbers there for?
youor changing the window parameters but not the numbers window 10 to 10 you play .5 to 3 from 15 to 15 you play .5 to 3 from window = 100 to -100 you play .5 to 3 tho i wouldnt recommend it. the histo and numbers are there to help estimate TP and SL…
If lets say price is moving from an extreme to the value area and hits .5 moves to 1 then back to .5 then 0 we estimated wat 0 would be price wise and set a ST their we estimate what 3 is price wise and set TP there. if it hit .5 odds are it will move to back to value area if it turns that means that it will extend back down and that would mean its trending that direction or that its a normal variation trading day and it would extend back alot further than 0… usd/jpy can be modified to 10 -10 by putting double in the code like bkr said…
Does anyone see what i mean, or shall i just jog on?!
cheers
Oz
i hopes that covers it i hope this answers some questions.
Pipy its clear that a tremendous amount of research has gone into this system. Ive been trading bonds for years and and I can your scholarship.
Many thanks for your reply.
To be honest there are just some inconsistencies I cant get my head around. I really dont want to be the new annoying guy (too late!) that spoils the party but Im a reasonably intelligent guy with a fair bit of finance experience and I just want to be able to understand this system so that I can invest in it. Because I like it a lot. Its only fair that we give it some respect by taking the time to figure it out rather than following it blindly given all the work you’ve put into it.
In the post previous you first say that 0.5 to 3% is originally applicable to equities and that we cant use it for forex. Yet we are using for forex and you dont explain later what the correct numbers are, if indeed there are other numbers
There is clearly something inherent in the histogram irrespective of the 0.5 to 3% that needs to be taken account of. I think this is clear in your head but alas not yet in mine
I dont understand how you can scale a figure but get “more data in”. If you change the MAs to 12, 26, 9 then that will change the histo for sure, but a scaler for c level will not change the data set…i cant see how more data gets included…all that happens is that you make the numbers look better. None of the bars change, how can this be a basis for the model? To me it doesnt make sense. Making the axes say -5 to 5 by changing clevel to 10 or 20 or 30 doesnt change anything, to my mind
Clearly i need to be asking different questions. I like the look of this system, its financially sound but at the moment im still at a bit of a loss. If it has clicked with everyone else then I apologise for taking up this room on the board and if anyone could explain this point to me in a private message then it would be much appreciated
Thanks a lot
Oz
Many thanks to all, and of course especially to pipy, for this super thread I came across with just today. I think that Chris is a real trading “guru”, probably also thanks to his familiar story and the possibility of dedicating himself to this “science-art” full time and as a professional. Probably many of us would like to have this possibility too…
This is not my case, and being able to make some mid-term option trade in the evening, and just let my MT4 run in background during office times (just shooting a furtive glance when the boss is far away 
), I am really attracted by the possibility of building up EAs and try to automate the art (of getting opportunities…). I know from other threads that other people like the idea too (brk1969…!).
So I think I will try to automate a bit this system, as far as possible, given that is really a sort of “complete science” (complex, therefore) of trading. I am pretty sure not to incorporate all the features (the “advanced” pipy’s lessons) and not to be able to reproduce the kind of flexibility that is granting an experienced guy like pipy the optimal profits out of the system.
I hope this way also to clarify some aspects of the method that, after re-reading the thread are not yet very clear to me for two reasons:
[ol]
[li]I’m not a “Yankee” :D, and therefore I had some hard time trying to interpret some not very “plain English jargon”.
[/li][li]There are still some theoretically unclear issues, like the longly debated (last time by chaudmo) scaling problem. This demonstrates that pipy is really first of all an “artist”, and that for him reading graphs and indicators is much easier than for most of us.
[/li]
[/ol]
There are several things to be better formalized in math or algorithm, trying to learn from arts. But perhaps this will also help a general clarification of some aspects.
What do you think about the feasibility?
For instance: the first thing that can be discussed about the scaling problem is that, adjusting Clevel for getting a -5 / 5 scale is really quite arbitrary, because it does not depend just on currency pair and timeframe chosen, but also period of time and lenght of the time (lenght of the X-axis) considered.
Examples: in my hands, on a H4 chart of EURUSD, with indicator’s (MACDC) parameters (36,78,27), a Clevel of 5.0 is needed to keep the -5.0 < MACDC < 5.0 if I consider the period Oct 23 / Nov 21 (today). If I then change the x-axis range to include just the last week (anyway more than 30 bars), the same Clevel parameter gives as a result a Y-scale ranging from -0.25 to 1.04, and therefore should be changed. By keeping Clevel = 5.0 for EURUSD/H4, MACDC would have never reached levels < -3.0 or > 3.0 at least from April to middle August 2008.
Of course a skilled “live trader” like pipy or you other guys can easily “adjust” to the varying market conditions, and even skip to consider the values of the indicator (actually you “follow the shape”, also visually). An EA (and a hobby trader relying on it because cannot follow the market real-time) cannot…
Is it possible in your view fixing a standard? Or can we find a math formalism able to substitute this -5/5 interval (and the related 0.5% - 3% trading range) with something independent from scales?
Just an input. Sorry if I will not show up very regularly, due to many other duties…
FS
Hello guys, my first post! Im Phillip…ive been looking in detail at this thread and it has piqued my interest! I am 29, equity research analyst so unlike you guys I dont have much experience in Forex but im working hard! Ive been trading equities for a while and I have a masters in Finance so I know a little theory
First of all Pipy great work…I thought at first you are a finance professor! Ive worked a lot on MACD and my final dissertation was on Black scholes pricing with MACD and its clear you have a large body of knowledge. Like many academics, you have the ideas clear in your mind but, if you permit me in saying, perhaps would help everyone if you explained them with more clarity. (I say this as a someone who had to change his thesis n times due to bad explanations - apparently good maths was not enough :=((( ) For instance your discussion on probabilities I liked a lot, but seriously chris I have to cut and paste the words into sentences myself to even figure the thread of the discussion!
You’re doing a awesome job in giving us all this system, im sure i speak for all when I say that there is much potential in this system and I hope you persevere because people like you giving this knowledge can change even peoples lives so thank you so much. (this sounds strong, but seriously thanks!)
I have read this thread maybe 5 times and the scaling issue I still cannot fully grasp…
The price action c ratio is a good development…i think this helps to reduce the white noise of the market in shorter timeframes. Maybe the confusion is due to the % issue
Obviously to 0.5 to 3 is an empirical range, but for equities…But, all the great research you have done shows that the 0.5 to 3 is not applicable to forex. This is where people (ME!) are confused I think. You keep on saying 0.5 to 3 but actually you are scaling this. You cant multiply by 100, say that its X%…then multiply by something else and say its still a percentage unless the c vlaue is different for different currency pairs
You keep saying 0.5 to 3 but I dont understand. I myself took 4 years of data for Cable and EUR/USD to backtest (because i like the idea of the system! took me a whole day, i couldnt remember any of my EMA) and i cannot find any timeframe (obviously there might be…in 5 min data, 10 min data…but this is just noise for me) where there is a C range of 0.5 to 3. Even now i can look at my cable chart and its like 0.7 to -0.4 or something. (BUT OF COURSE, I WOULDNT FIND ANY VALUES, U SAY YOURSELF THAT THIS IS FOR EQUITIES. But then you maintain the 0.5 to 3%? there is some inconsistency. (clearly not for you given how succesful it is for you!!)) But the system says I just multiply these by 10? but of course the data fit then 7 to 4.
So say I times USD/JPy by 3.1415927 just to get 5 to -5 . (Or maybe i say in my head i want to see 3 to -3, in which case i dont even need numbers or to change the Clevel parameter, i just imagine i see 3 to -3, i trade on the cross and then exit when the histogram reach the top…you see what i mean? i dont see this myself but maybe someone does…
Now you are well within you’re rights to say "hey guys, f*ck off! (sorry!) , its my system and now im sick of explaining!! but you are clearly one of the good guys and im sure you would like us all to understand. So maybe the solution is to show us how the c value relates to SPECIFIC currency pairs, GBP/USD, EUR/USD etc etc. to be honest I dont know the answer, only that I feel it is the histogram itself and not any numbers . ( That is why sometimes you say 0.5 to 3, sometimes you have said “trade on the cross” which is not the same exacvtly)
The fact is that for you the numbers dont mean much anymore throug your experience. But for us yes.
I would like to help in any way I can, ur obviously a good honest guy and if you could help us to understand this system I could be eternally grateful
Many thanks Chris
Phil