THE JOY OF CANDLESTICK TRADING - a Learning Experience

Beginner Questions
63

Where did you get that Sweetpip?

64

To Sweet Pip :

So glad you got the Keltner channel going. When I saw your first post, I was not sure what to do - except to post the formula.

Congratulations for some hard work on your part. :slight_smile: :slight_smile: :slight_smile:

[B]Now for the record, I shall post some Keltner channel formulas :[/B]

[B]
Version 1[/B]

Formula #1
Name: The 10-Day Moving Average
Formula: MOV( (H+L+C)/3, 10, Simple )

Formula #2
Name: Upper Keltner Band
Formula: MOV((H+L+C)/3,10,S) + MOV((H-L),10,S)

Formula #3
Name: Lower Keltner Band
Formula: MOV((H+L+C)/3,10,S) - MOV((H-L),10,S)
[U]
All three formulas must be plotted.[/U]

[B]Version 2[/B]


By tymen1 at 2008-03-12

65

[B]And now, for the final result of the 5 minute chart - although you can see the result already on the earlier 25 minute chart :[/B]


By tymen1 at 2008-03-10

[B]Next post I will introduce you to an amazing principle that I think many of you may know about already - but maybe you have never thought of using it.[/B]

This principle will then work in with the [U]5 minute chart, a MACD[/U] and the [U]Keltner channel[/U] to allow precise entries.

66

Great thread Tymen keep up the good work.

67

Iā€™m lost but keep posting and I will find a way. Always admire the time you give to us, keep teaching.d

68

Hi tonymand, I found it on the MQL4 codebase website. It doesnā€™t look like Tymen1ā€™s example with his being a solid gray matter so I presume his is like that for demonstration purposes (being that heā€™s doing his examples in a Paint program). These are the band lines like what is illustrated in the articles he provided links to.

I canā€™t seem to upload a file like I can a picture :confused: so hereā€™s a link to where I got it from:

Keltner Channel - MQL4 Code Base

Hope that helps :slight_smile:

69

It doesnā€™t look like Tymen1ā€™s example with his being a solid gray matter so I presume his is like that for demonstration purposes (being that heā€™s doing his examples in a Paint program).

Yes that is correct Sweet Pip.

It comes on the chart as an upper, middle and lower band.

But for the sake of clarity, I have :

  1. Removed the grid lines on the chart.
  2. Coloured the Keltner fully in grey to make it clearly distinguishable from the Bolinger bands. (Done in Microsoft Paint - standard with XP)
  3. The BB are in blue so that they can be seen.
  4. My arrows pointing to important matters are in bright pink.

[B]The Keltner middle band will soon be visible - it is coloured yellow to contrast against the grey.[/B]

Next post tomorrow.

70

Iā€™m following this thread along as well, thanks for your effort!

71

I think this is a great thread and the reason there arenļæ½t many responses is because your explanations are so good that no one needs to ask questions.

Iļæ½m just impatient and itļæ½s hard waiting so long for the next post! :slight_smile:

72

Hey Tymen,

Gotta say I love your system.

As a newbie I was cautioned about smaller time frames.

I was using the 1hr as my smallest increment, but I find Iā€™m a little too jumpy for that. I would enter and at times it would start backing up 5 pips then 10 then 15, and Iā€™d jump out - mild losses but they add up when you do 5 in a row.
Since Iā€™ve been using your system on the 5 min that has pretty much gone away, I find it suits my personality better. Iā€™m still using 1hr but pinpointing entrys with the 5 min.

I understand the use of MACD and BB but not the Keltner. I can hardly waitā€¦

Thank you very much.

73

Many thanks again to all those posters who are encouraging me to go on. Thanks to Tonymand, Sweet Pip, Daydreamer65, Dobro, Max99, Cdawg, VulcanClassic - I acknowledge you all.

Now I am going to show you something that I thought was amazing when I discovered it.
But I am sure you people know about it already.

Have a look at the picture below >>>


By tymen1 at 2008-03-11

>>> this picture introduces you to the world of vectors - magnitude and direction.

One of the vectors represents the [U]direction [/U]of the Bolinger middle band.
Another one represents the [U]direction [/U]of the MACD.

These vectors are then added together to obtain a RESULTANT which, if you look carefully, is the direction of the [U]price action[/U].

This works in [U]every [/U]case and on the 5 minute chart, is good for forcasting several candles in advance.

Thus knowing this, we are going to use this as a weapon in our entries.

The chart for entries will be a 5 minute chart with a MACD (standard settings), Bolinger bands (standard settings) and from these we can do a price prediction with the keltner channel.

[B]I will show more posts to explain how this is done.[/B]

74

Thanks Sweetpip

75

Tymen-
I am following along, too. Please go on. Many thanks for your generosity.

Thanks also to Sweetpip for dragging up that code!

76

Thank you Cbarnett808 :

The following picture shows several case senarios with the BB and MACD vectors. In each case the resultant is the direction of price action for the next few candles :


By tymen1 at 2008-03-11

[B]Next : to explain how this works with the Keltner channel.[/B]

77

Tymen,

Keep on trucking! We appreciate your lessons.

Thanks

78

Thank you Moneda (love your avatar!) :slight_smile:

Because the BB middle band can rise or fall steeply and the MACD can also rise or fall steeply, it means that the [U]resultant[/U], the price action, can also rise or fall steeply.

[B]So what has this to do with the Keltner channel?[/B]

The Keltner channel, like the Bolinger band has 3 bands - middle, upper and lower.

I will now explain how it all worksā€¦

[U][B]Procedure[/B][/U]

[B]Step 1[/B]

Once we spot the completion of a candlestick pattern (say the evening star) on the [U]main [/U]chart, we then open a [U]5 minute chart[/U] with the following indicators :

  1. A MACD (standard settings)

  2. Bolinger bands (standard settings).

  3. A Keltner channel with settingsā€¦period 5, factor 1.

That is all.

However, care must be taken with colours. The BB and Keltner must be clearly different - both the BB and Keltner have middle bands. Make the colours clear. eg one blue, the other red.
DONā€™T CONFUSE THE TWO!!

[B]Step 2[/B]

At the point of entry draw the MACD vector on the MACD indicator. (use line drawing facilities in your charting program).

At the point of entry draw the [U]middle [/U]BB vector on the middle band.

Now estimate or draw the RESULTANT. This will be the direction of the price action for the next few candles.
You can draw the resultant right over the middle BB if convenient - as long as everything is visible to you.

[B]Step 3[/B]

[U]The rules[/U]

If the resultant is going up (price action up) then enter at TOP keltner band.

If the resultant is going level (price action level) then enter at MIDDLE keltner band.

If the resultant is going down (price action down) then enter at BOTTOM keltner band.

[B]Next post - some real case senarios[/B]

79

Tymen - iā€™m staggered by the Vector analysis. Makes so much sense but I canā€™t belive iā€™ve never made the connection. Props to you!

80

Tymen,

Could you please post a chart shot with that entry?

Iā€™m just not sure how to draw the vectors, from peak to peak or extending the MA.

Awesome stuff.

81

Daedalusā€¦arnā€™t fibonacci fans a vector type tool? Have you explored using them? (Iā€™m at work right now so canā€™t play with them)

Just a thought :slight_smile:

82

Iā€™m just not sure how to draw the vectors, from peak to peak or extending the MA.

Coming tomorrow VulcanClassic