I wrote and indicator to plot HSTOP and LSTOP.
Then after reading what you wrote a second time, I added a myShift input.
The chart shows one plot with myShift = 0 and one plot with myShift = 3.
You can see price does penetrate the plots with myShift=3.
Is this what you have in mind?
_TRO_HL_dpaterso T4 Indicator attached.
_TRO_HL_dpaterso.zip (3.21 KB)
Good (Sunday) morning all!!!
Avery:
Are you TRYING to kill me??? Let me make you aware of something: my hangovers tend to last AT LEAST two or three days lately. Why am I telling YOU this? Because when I checked the thread this morning and saw that chart og yours it sent me into ‘sensory overdrive’ with all those ‘dots’ and I ‘tied one on’ on Friday night!!!
OK:
Seriously:
Thanks for posting!!!
I have attached a chart from Deltastock that I ‘coded’ in VB for their platform. Take a look. THAT is what I had in mind for MT4. (It’s just the top lines you’re looking at for now). The lines are nothing more than Pivot Points / Levels (Wilder just called them something different for the RTS and I’ve added a few details of which are contained in my previous posts). My RTS ‘sysdicator’ (good word hey???) draws the lines for the current day - 1 i.e. I’m showing the pivots for the current trading day is all. There is no need for a ‘shift’ variable or anything like that i.e. they are ‘stock standard’ Pivot Points / Levels.
Hokay.
I have been ‘approached’ on more than one occasion via PM’s or email to ‘rate’ the different sections in the book in order of importance so I’m going to give MY opinion below (everyone feel free to add to or disagree with my ‘ratings’).
I would say that the very FIRST section to read and ‘note’ would be SECTION I: ‘BASICS’ because the ‘BASIC TOOLS’ described here are used throughout.
Next would be SECTION IV: ‘THE DIRECTIONAL MOVEMENT CONCEPT’ / ‘THE DIRECTIONAL MOVEMENT SYSTEM’ as the information contained in this section is also used throughout. This section needs to be UNDERSTOOD so read it as many times as you have to!!!
Next would be SECTION X: ‘CAPITAL MANAGEMENT’ / ‘CONCLUSION’ and when reading this section be sure to factor in leverage as I have done with my own ‘version’ of Wilders capital management i.e. MY money management rules.
Next would be SECTION IX: ‘THE COMMODITY SELECTION INDEX’ (I don’t use the CSI as described but rather the ADX/ADXR values for reasons as stated previously on the thread).
At this point I would move on to the actual trading systems.
For me: my results are (at the moment) being generated by trading the systems below (listed in order of ‘consecutive successful trades’):
SECTION VII: ‘THE REACTION TREND SYSTEM’ (and my ‘variation’ thereof) (to be used MAINLY in ranging markets i.e. where ADX/ADXR < 20 and MAYBE between 20 and 25).
SECTION III: ‘THE VOLATILITY INDEX’ / ‘THE VOLATILITY SYSTEM’ (and I don’t see the reason to note either the CSI or ADX/ADXR value with this system because it’s based mainly on the ATR and will reconfigure itself to the current volatility and directional movement).
SECTION VIII: ‘THE SWING INDEX’ / ‘THE SWING INDEX SYSTEM’ (only used in a trending market i.e. where ADX/ADXR > 25 and THE HIGHER THE VALUES THE BETTER).
At this point you should be able to trade with the above systems and make some nice profits.
I WOULD NOT, however, stop here i.e. each of the sections in the book contain additional information ‘in general’ i.e. information that is NOT ‘specific’ to a particular trading system and some of this information is INVALUABLE e.g. SECTION V: ‘THE MOMENTUM CONCEPT’ and SECTION VI: ‘THE RELATIVE STRENGTH INDEX’.
This works for me!!! Hope this helps.
Oh and one LAST thing: MY ‘sysdicators’ ARE SUPPLEMENTAL to the book i.e. if you have not studied the systems and gone through them and ‘worked’ them then my ‘sysdicators’ are going to be of very little value to you and to be honest I’m not interested in ‘teaching’ these systems to anyone who has not done the initial ‘legwork’ of trying to understand the systems by putting in the effort (and believe me it’s obvious when someone has not done this and is trying to ‘busk’ their way through). There are quite a few people (myself included) that have actually put in the time and the effort and these people grasp the workings of my ‘sysdicators’ ‘in an instant’ and that’s the way it should be. In addition to that of course my ‘sysdicators’ are Deltastock and GCI Financial ‘specific’ so by NOT trying to understand or ‘work’ the systems you’re ‘tying’ yourself to my two brokers (which for ME of course is not a BAD thing BUT would undermine the purpose of this thread).
Well,
It’s Sunday night here and getting ready for the week.
After updating my ADX/ADXR worksheet I find that at present there is ONLY ONE pair that has both an ADX < 20 AND ADXR < 20 and would you believe that it’s USD/ZAR!!! Would you ALSO believe that AUD/NZD is STILL ‘top of the pops’ i.e. the highest ADX and ADXR ratings!!!
Anyway: this all got me to thinking. I don’t see why you cannot use the RTS (with my extra levels) in a trending market as well. Why do I say this??? Because let’s just say that a pair is trending up right??? If you’re LUCKY enough to get a retractment to B1, B2, or LBOP (or EVEN LSTOP) you can pretty much ‘bet your ar*e’ that at at SOME point S1 is going to get hit not so??? In addition to this: if S1 is NOT hit it’s going to move UP the next day so your TP target is going to increase i.e. more profit. Anyone agree here???
Also: the ‘perfect Wilder storm’:
For long trades with the RTS (opposite would obviously apply to short trades):
You could EVEN introduce some EMA’s if you like I suppose e.g. 8 EMA and 21 EMA i.e. buy at B1, B2, and LBOP (and again maybe at LSTOP if ‘luck’ is on your side) and sell (TP) at S1 only when the 8 EMA is above the 21 EMA (again the opposite would apply for short trades). Remember also the significance of the 50 EMA and 200 EMA!!!
You could EVEN use something like Linear Regression Channels (14) (see attached chart of AUD/NZD. In VERY bad taste I know). Using the RTPS ‘Reaction Trend Pivot System’) and only taking long trades i.e. only buying at B1, B2, LBOP, or LSTOP and selling (TP) at S1 you would have taken profit every single day by the looks of things!!!
(Man oh man: this is no longer ‘creative juices’ but ‘creative nectar’ flowing here)!!!
Obviously you’re only going to get into a few trades this way i.e. you’re ‘betting’ on a retractment during the trend BUT I would say that these would be ‘higher than average probability’ trades wouldn’t you???
And I suppose the above would really apply to ALL of the systems in ‘the book’ with the possibly exception of the VS i.e. is there a point to taking short SI System trades (whether it be an entry or a stop and reverse) if the trend is up???
Play around folks. Don’t detract from the ‘core’ of the systems but play around!!!
And for those interested: in SPITE of AUD/NZD and thanks mostly to the RTS I’m up on average around 30% for the month and today is only the 18th!!!
Made an attempt at your indicator.
I can’t tell from your chart… are the values DAILY VALUES plotted on a higher frequency chart?
Since you are using a pivot calculation, I made the assumption that you ARE using daily values so I made another version.
I’d better see the Doc!!
:eek: :eek: :eek:
I don’t know if I mentioned this on this thread sometime previously but this is the site that I use to check what the opening prices on a Sunday are going to be i.e. what’s happened since Friday night’s close:
Oz Forex Foreign Exchange | Inter-Bank Spot Rates
(Also useful sometimes to verify the prices you’re being quoted by your broker i.e. the rates quoted are the live Inter-bank Spot Rates).
Why is this important to me:
Well: ‘for starters’ I know that AUD/NZD has moved ‘south’ over the weekend!!! Also: the USD has gained a bit of ground over the weekend.
I think I got it!!
You can use the chart period or specify whichever one you want.
Example shows D1 values plotted on H1 chart.
Good (Monday) morning all!!!
(I had another dream)!!! (Well not really but this IS the first thought that ‘crossed my mind’ when I woke up this morning)!!!
I MAY have found a more ‘scientific’ method for the RTS ‘BOS’ sequencing:
Using Linear Channel Regression:
Method 1:
In THIS ‘scenario’ you would use STOP ORDERS because the price would normally be ABOVE or BELOW the RTS levels.
Method 2:
In THIS ‘scenario’ you would use LIMIT ORDERS as per ‘normal’ and this would probably be the ‘preferred’, ‘safest’, and most profitable method.
Method 3:
(Geez: been trying to add this third one the whole morning)!!!
In THIS ‘scenario’ you would use LIMIT ORDERS as per ‘normal’ and this would also be a ‘safe’, and profitable method although profits may be smaller.
The ‘ideal’ scenario for the above methods is that the lines themselves are ‘flat’ or horizontal i.e. not ‘sloping’ in EITHER direction and ADX and / or ADXR is below 25 UNLESS you are going to use the RTS in a trending market in which case you would only take long or short entries as I described in a previous post to this one.
Of course your TP is up to you or you can follow the RTS TP / exit rules.
Now none of this follows the RTS rule or ‘noted phenomenon’ of ‘three-days-up-two-days-down’ as described in ‘the book’ BUT the very ‘concept’ of the channels is that the price WILL trade between the upper and lower lines ‘pretty much’ on alternate days or periods.
Also: none of the above is detracting from the RTS itself i.e. you’re still using exactly the same ‘concept’ i.e. all you’re really doing is (possibly) using a more ‘current’ or ‘accurate’ method for the ‘sequencing’.
For more information on Linear Regression Channels do a Google search using the phrase: ‘trading with linear regression channels’ and see what you find.
Oh, by the way: SUCCESSFUL AND CONSISTENT TRADING THIS WEEK EVERYONE!!!
Edit:
As a matter of fact making use of Linear Regression Channels (let’s call them ‘LRC’s’ from now on shall we i.e. that’s a ‘full load’ to type everytime) may even be able to ‘beef up’ the profitability of the TBPS i.e. only take trades as indicated by the MF AND in the direction of the channels!!! Maybe???
Hey Dale, interesting stuff about the linear regression above. After trying it out for a day or two, do you still think it has merit? I’ve been reading up on the RT system over the weekend, and I’m pretty sure I have it down pretty well now. One thing though, do you really think the “B, O, S” labeling really matters much? I know in our chat the other day when you talked about the “bastard version” that includes the S2 and L2 levels you never mentioned the day labeling so I wasn’t sure if you still used that part of the system all the time. Since I don’t really have much time to maintain and watch trades throughout the day, I’m probably going to takes trades based on where the candles close because for an hour or two after the “delta close” is the best time for me i.e. a break in between classes to look at the charts. So if a candle closes right above or below B1, I can set orders at LBOP, B1, and B2 with TP at MID or possibly S1.
Also, I hope to be trading live at Delta by thursday or friday. I withdrew the funds from my Oanda account and I am ready to sign up with Delta, I just need to find a bank statement to submit to them so they will approve my account.
Hello,
Geez: I was getting worried!!! No posts from anyone except me this week so far!!!
Well: I’ve added the LRC’s to all my charts I definitely think they have merit and I’ve a few orders place based on this ‘addition’ so let’s see what happens. In my ‘research’ into the use of the LRC’s I found on more than one website that the combination of Pivot Points / Levels and LRC’s is a ‘valid’ ‘trading system’ i.e. where the upper or the lower LRC line crosses a Pivot Point / Level then that’s where to place your order(s) from what I understand. With these ‘trading systems’ you would TP at the LRC mid point. Now think about this for a minute: our RTS is Pivot Points / Levels as we have discovered so again we’re not ‘messing’ with the ‘core’ of the system so nothing should change OTHER than the fact that you have a very clear indication of the existence of a trend or the absence thereof and how you ‘play this’ is of course up to you.
I DO think there is a CERTAIN merit in the ‘BOS’ sequencing and I can see the ‘logic’ behind it i.e. you buy or sell and then ‘hold’ for a day or two and this SHOULD have an impact on the amount of profit you make i.e. normally it would (should???) be greater. The success that I’m having with the RTS as you know is based on taking profit ANY DAY that the corresponding B1 or S1 is hit. Does this minimize the amount of profit that I’m taking??? Probably. Is it ensuring that I am INDEED taking profits and not losses??? I think so (even although the profit on a trade MAY be less had I waited for another day or two i.e. ‘done nothing’ on an ‘O Day’). That’s my ‘take’ anyway.
Dale,
Is it possible to make about 20-30% per month consistently by just trading the “main systems” in the book…ie only trading at midnight when the new daily bar appears?
Thanks,
Balaji
Hi,
Yes I think so with the possible exception of the VS. The reason I say this is because the VS gets you into trades that may alternate between big profits and big losses so you may, for example, open a trade at the beginning of the month and that trade could very well sit in a loss for a quite a while until turning to profit and then once it’s in profit you have the added problem that if you exit the trade early i.e. before waiting for a VS SAR then you cannot be sure just how long it’s going to be before you get another VS entry signal. I do belive that a combination of the RTS and the SIS you should manage it quite easily if done correctly.
Hey,
Anyone out there who has a ‘fundamental’ knowledge of fundamental analysis???
Let me tell you why I ask:
I have just noticed a few things ‘out of the ordinary’ taking place so far today:
As you all know I’m no expert in fundamental analysis (as a matter of fact I ‘suck at it’ BIG TIME) SO: are these ‘divergences’ indicative of anything or is what I’m seeing just ‘wishful thinking’ on my part ala AUD/NZD???
Can the reaction trend system be used to trade currencies?.
In the book, it states that “random price movement appears to take longer to increase than it does to decrease” - this applies to commodities right?
Currencies are traded against each other so i am unsure to whether the same principle applies for the currency market aswell.
If you have been using reaction trend system for currencies, how successful has it been(on average)?..win/lose ratio.
Also - how do you work out whether the first day is “B” or “S” day?..i am asking this because im not sure how to work out the general trend(up trend or down trend)…ie im not sure whether to use the highest high or lowest low. - the ADX indicator fluctuates so much during a sideways market, it is not possible to see a clear trend direction.
How much money do you risk per trade? (in %)
Thank you
Good (Wednesday) morning all!!!
balaji3003:
IF your questions are directed at me then I’m afraid that you’re NOT going to be pleased with my answer(s) to you.
I have gone to GREAT lengths on this thread to post details of what ‘modifications’ to the systems are needed SPECIFICALLY for forex pairs; what my % gains have been with the various systems; how to begin the ‘BOS’ sequence (ADX has nothing to do with this); and what my money management rules are i.e. ‘how much money I risk per trade’. All you need to do is read the thread.
One thing that KEEPS coming up on ALL the threads:
WHY are people SO concerned with the win / lose ratio and / or the number pips made??? WHO CARES!!! We’re NOT in this to make pips!!! We’re NOT in this to attain the highest win / lose ratios!!! We’re IN this to make $$$!!! People get ‘stuck’ on this ‘number of pips’ or ‘win / lose ratio’ for what reason I don’t know!!! Remember: NOT ALL PIPS ARE CREATED EQUAL e.g. a 1 000 pip movement on EUR/USD is nowhere NEAR the $$$ value of a 1 000 pip movement on GBP/JPY or Soybeans or Silver!!! If I start the month with a capital balance of $500 and I end the month with a capital balance of $1 000 then I’m happy no matter whether the 100% gain on capital was made with a win / lose ratio of 1:50 or with a 10 pip nett gain!!! Remember: IT’S THE $$$ THAT COUNT!!! ‘He’ who has the most $$$ WINS NOT ‘He’ who has the most pips NOR ‘He’ that has the highest win / lose ratio!!!
Dale, I’ve been spending more time looking at linear regression channels, and I do think that it would be a better “compass” for the RT system trades. My main problem with the RT as it is written in the book is which day is designated as your previous significant high/low point. Should you start looking when the ranging period starts (adx and adxr both under 25) or at some previous point? Also, I have noticed that the B O S sequence can sometimes get messed up when you do it like it says in the book. I think this is because the system is based on the “three days up, two days down” thing mentioned on page 72 and 73, which doesn’t seem to happen as much nowdays, just from my looking at some charts of low adx/adxr pairs recently.
Also, I was wondering what settings for linear regression you were using for your RT entries. To me, what seems to work pretty good is to set the linear regression lines to start at where the range seems to start (first day in a sequence where adx/adxr values are below 25) and then possibly extend the lines by adding 1 to the value every day.
Not trying to get away from “the man’s” systems or anything, but if you use linear regression by itself like I mentioned above, you seem to get pretty good results selling off the top line, buying off the bottom, and taking profits at the midline. The trick seems to be setting the linear regression to start where the range starts, and then adjust it every day by adding 1 until the adx/adxr values start to climb back above 25 and you no longer want to use an anti-trend system.
Yo!!!
‘The book’ says to go back two or three weeks and SOMEWHERE AROUND THERE find a significant high point or significant low point and start the sequence from there and it does not matter whether the instrument of pair was ranging or trending BACK THEN ONLY what it’s doing now. Also remember that the ‘three-days-up-two-days-down’ ‘phenomemon’ I don’t think is supposed to be taken ‘literally’ as it were. In other words: remember that you’re looking back HISTORICALLY i.e. you’re seeing the bars AFTER they’ve closed. You’re (we’re) trying to trade a ranging market so EVEN IF you have FIVE ‘down days’ in a row it does NOT mean to say that DURING those five ‘down days’ the RTS levels were not hit. Remember: they’re Pivots and 99.999% of the time price will trade to, and stop, and turn again at one or the other Pivot i.e. at one or the other RTS level.
As far as the LRC’s are concerned: I’m ‘with you’ on your idea of finding ‘roughly’ where the instrument / pair started trading in a range. What I’m currently testing with LRC’s (14,100) is to find a pair that’s trading in a range and placing my buy or sell orders at the FIRST OR CLOSEST RTS level that falls OUTSIDE of the LRC’s and then following the RTS through for an exit. In other words: if my B2 is the closest RTS level AND it’s OUTSIDE the LRC i.e. BELOW the red line in our case then that’s where I’m placing an order and if it gets hit then I’m making my TP S1 as per the RTS and adjusting that every day if the TP has not yet been hit. Yes: I’m making fewer trades of course BUT I’m ALMOST ensuring that if my TP i.e. S1 in this case is NOT hit on the ‘correct RTS day’ and price moves against me then the next day, even although S1 has moved CLOSER to me, if I manage to TP then I still make a profit as opposed to either breaking even or having to close out at a loss when I’m required to close out as per the system. I hope that makes sense.
You guys seem to be having the same problem as I had with the book (and no offense is meant here i.e. this is meant to help not ‘hinder’): I don’t know if it’s because the information is presented in such a ‘dense’ or ‘concise’ form or what but sometimes you need to read each sentence as if you were back in ‘kindergarten’ because it’s REAL easy to miss a word or something that can change the whole outcome of your understanding of what you’ve just read.
Also: I am currently ‘experimenting’ with using ADX/ADXR(7) again to detect a range. The reason being that these RTS trades appear to be relatively ‘quick’ trades so you want to know ASAP when a pair has started trading in a range and you also want to know ASAP when a pair has started to trend. I’m currently not sure whether I’m on the right track or not i.e. only time and experimentation (and resultant profits of course) will tell.
Again: every day I find more and more that you need to ‘see’ the systems ‘as a whole’ i.e. take a ‘broader view’ of things e.g. don’t JUST look at the ASI or the RTS levels BUT ALSO take into account the ‘slope’ and ‘direction’ of the ADX and where +DI and -DI crossed because that is also a ‘key’ level (take any instrument or pair, see where +DI and -DI crossed, and look at the closing price on that day keeping in mind the ‘extreme point rule’ and you’ll see that most times that level is either support or resistance). Just one example of course but you get the picture.
Edit:
I thought I’d attach a chart of USD/ZAR (ADX/ADXR < 20) ‘for good measure’.
Hey Nick,
Seeing that you and I are ‘playing around’ with LRC’s here is what APPEARS to be the MOST ‘foolproof of the lot’ and I thought you might be interested or at least take a look:
LRC’s (14,100).
ADX/ADXR > 25 (the higher the better of course).
RTS.
SIS.
Take SIS entries (whether based on HSP’s or LSP’s or SAR’s it does not matter) ONLY in the direction of the LRC’s AND (here is the ‘key’) EXIT at the closest RTS level that will result in a profit being made (or if you’re feeling ‘adventurous’ scale out the position over multpile RTS levels!!!
In other words: you’re using the SIS for entries (and SIS entries are 99.999% ‘accurately in the right direction’ INITIALLY I find), you’re ONLY taking entries in the direction of the current trend, and you’re taking profit at specified levels as per the RTS. Given the numerous entry signals provided on a daily basis by the SIS this should generate nice consistent daily profits EVEN ALTHOUGH you’re not using the SIS to ‘trade the trend out’.
This of course is NOT ‘trend following’ and works on a similar principle to the TBPS except that the profits are bigger, you’re NOT entering at market, and there are no HUGE stops to spoil you day (account)!!! On the OTHER HAND: the LRC’s sure look a like a MAJOR ‘compliment’ to the TBPS i.e. only taking TBPS entries when indicated BUT in the direction of the LRC’s.
I suppose that all of the above once again just proves the old adage that ‘the trend is your friend’ (as ‘coy’ as that may sound after all this time)!!!
Take a look.
Edit:
On FURTHER closer inspection it would seem that by decreasing the period for the LRC’s they become more ‘sensitive’ and / or ‘reactive’ to a trend direction change. Could it be a way to ‘filter out’ some ‘false’ SIS SAR’s???
(Just one thing for others following this thread: Linear Regression Channels or 'LRC’s are NOT just a set of parallel trend lines i.e. their values are calculated by using a (fairly???) comples algebraic equation. I mention this because I think that they have more ‘substance’ than just a set of parallel trend lines).
