The parabolic trend line is included in these subjective exits and I will not waste time elaborating on it.
[B]We conclude this topic.[/B]
I am going to slow down posting now, since moving home is uppermost in my mind and being right now.
any women or men
back to lesson!
[B]TOPIC 11
TRADING WITH INDICATORS
THE MMACD SIGNAL LINE[/B]
I will start by posting the computer program for this one.
That allows the readers to participate. 
What you need to do is delete the [B]MMACDnew.[/B]
After having deleted it, you now instal the following programâŚ
indicator A_MMACD ;
input p1 = 3, p2 = 50, trigger = 9;
draw zeroline(âzerolineâ, solid_line, dark_magenta,2),
mmacd(âMMACDâ, solid_line, blue,2),
green_histogram(âmmacdgreenâ, Histogram, dark_green,2),
red_histogram(âmmacdredâ, Histogram, red,2),
black_histogram(âmmacdzeroâ, histogram, black,2);
vars shortav(series), longav(series), signal(series), res(series), i(number);
begin
zeroline := makeseries (front(close), back(close), 0);
shortav := ema(close, p1);
longav := ema(close, p2);
mmacd := ((shortav-longav)/longav)*100;
signal := ema(mmacd, trigger);
res := mmacd - signal;
green_histogram := res;
red_histogram := res;
black_histogram := res;
for i := front(green_histogram) to back(green_histogram) do begin
if green_histogram[i] < 0 then green_histogram[i] := 0;
end;
for i := front(red_histogram) to back(red_histogram) do begin
if red_histogram[i] > 0 then red_histogram[i] := 0;
end;
for i := front(black_histogram) to back(black_histogram) do begin
if black_histogram[i] <> 0 then black_histogram[i] := 0;
end;
end.
This is the last of the computer programs I will be giving you.
[B]We now need a programmer to convert this GFT ctl program into MT4 code.
Who is prepared to do this? [/B]
IronHeart
Hi Tymen,
Perhaps if we could have a picture of the new MMACD and an explanation of the green, red and black MMACD histogram lines, then I might be able to help.
(no promises though) 
What does it look like?
Well here it is >>>
Here we basically have the whole kit, kat and ka-doodle!! 
The 3 vital parts of our trading methodâŚ
the GMMA
the MMACD
the Bollinger bands.
Yes, it looks crowded on this chart. 
But the GMMA is here to give an overall picture of what is going on, and, once we see that, we can delete it.
The signal line gives us another exit and re-entry method.
But beware, because we are dealing with an indicator - therefore lagging.
[B]When going long on the MMACD, the trading areas are the green histogram areas.
When going short on the MMACD, the trading areas are the red histogram areas.
The initial entry is given by the MMACD crossover with the zeroline.
After that exits and re-entries are given by the histogram.[/B]
I donât use MT4 otherwise I would help. I use another less well known platform. From what I see, is the signal line simply a 9 period EMA of the MMACD line?
Do you remember the tandem BB bubbles I showed you?
Here it is again with the GMMA in a separate window to give overview of what is going on >>>
Now lets look at the trade >>>
We are trading short here, shown by the MMACD below the zeroline.
The first entry is given by the MMACD crossover with the zeroline.
After that exits and re-entries are governed by the red histogram.
I have shown the trading areas in orange.
The 1st pattern is a BB bubble and the exit given by the histogram is not as good as the simple exit method.
In the 2nd case, a BB sausage, the exits are about even.
tymen, my question is
can we predict the direction of the price action from the point P or K
That is exactly correct!!
[B]Exercise for you!! [/B] 
Scroll thro a whole series of BB bubbles in varous timeframes and locate point P on each one.
Note the price direction after P.
Is there a common pattern?
I say there is (meaning yes to your question).
but which way is it? - thats for you to find out!!
Unless we take special measures, we can be hit by complexities in these trades.
Take a look at this one >>>
Here we have a short trade, starting with the MMACD crossover of the zeroline.
We enter into a BB bubble, then another smaller BB bubble, then onto a BB sausage.
We are whipsawed in and out of the trade. :eek:
This is definitely no good. 
Some of these whipsaws will actually produce a loss.
Now what good is that?!
Furthermore, the short trades are shown in the orange areas.
But who knows if they are going to be only whipsaws?
And just losses!!?
How do we solve this dilemma? 
WellâŚ
âŚin our persuit of maximum pips, we would like to trade all of the BB patterns.
âŚHowever, this may not be possible without incurring some losses - and possibly big ones too!!
NEXT POST
We note in the previous post that the MMACD crossover [U]occurred in a BB squeeze.[/U]
This is a word associated with the BB that you [U]must [/U]knowâŚ[B]SQUEEZE[/B]
[B]John Bollinger,[/B] inventor of the BB, states in his bookâŚ[B]Bollinger on [/B][B]Bollinger Bands [/B]on page 67, that many trends originate in the [B]squeeze.[/B]
Logically then, the trend immediately breaks out into either[U] a BB bubble[/U] or [U]a BB sausage[/U] resulting in immediate profit.
Such is the case in the previous post.
After the MMACD crossover occurred in a [B]BB squeeze[/B], the trade entered [U]a BB bubble[/U].
The trade will go smoothly if we complete the BB bubble and [U]forfeit [/U]the rest of the trend!!
[B]Sad but safe!! :p[/B]
SoâŚ
[B]We assume that a MMACD crossover will occur in a BB squeeze.
We then trade the pattern (bubble or sausage) following and only that pattern and no more!![/B]
After that we must wait for a new MMACD crossover.
Lets apply the above rule to the trade we just looked at.
This means we trade only the 1st bubble and forget about the 2nd bubble and the sausage.
Here is the outcome >>>
The entry is given by the MMACD crossover in the squeeze.
We trade short - the MMACD is below the zeroline and we have a red histogram.
We exit the trade when the red histogram goes green.
Note the exit point.
Note now the exit point given by the simple exit method (the 1st candle free from the BB) - this is shown in the blue box.
The simple exit method gives a superior entry.
Hi Tymen,
Having read your previous threads and never contributed I figured it was probably about time to acknowledge your continued contribution to the quality of free training that the Forex community provides for both experienced and new traders alike. This is an evolving thread (as always!) but one that is now begining to hint at a final system which is akin to one that almost all traders are looking for - A mechanical trading system with clearly defined entries, exits, re entries and demonstrable track record of profitability. I look forward to the conclusion and hopefully joining in with some live trading after.
I wanted to clarify one or two points if I could though.
The question of SL has been covered and questioned during the threadâs progress. However, the original message was to close an existing trade on a MMACD cross and open a new trade in the new PA direction. As we are now only trading with the longer term trend and not taking each cross as a signal, is the trade still to be canned only on a MMACD cross? On general back testing, this seems like it could give losses anything between a pip or 2 right up to 60/70 or more pips on some pairs. Have you looked into what the maximum likely hit you could take on this exit method might be as a big loss on the first few trades could kill a new starterâs confidence in the system.
The second question I have is about timeframes. You are using M20 as your entry TF. MT4 doesnât have M20, is M15 ok or do you think that it may produce too many false signals?
I guess all will be summed up superbly in the final PDF but there's nothing wrong with keeping the information flow going throughout IMO.
Cheers Tymen
Mystictymen,
If the MMACD crossover occurred out of a BB squeeze should we make an entry?
I have conflict between the signals,
I am in the short trade. Simple exit method tells that I must exit, but MMACD crossover has crossed the zero line (downtrend its 1H eur/gbp)
Which one has more priority Simple exit method or MMACD crossover?
I dont know should I continue to hold my short trade or i must exit?
thanks for anyone advice
Hey all,
Here is the latest and greatest MMACD indicator.
As always, fully editable colours and widths, etc etc.
Enjoy.
MMACD.zip (1023 Bytes)
1 Like
thank you alot IronHeart, you are genius!
would you also code tymenâs custom BB please?