Hello all,
Please, which is the fastest indicator to detect a new trend. I was using MACD but I realize that it conflicts with other indicators like RSI most of the time. Any other one?
Best regards.
Femi
The indicator (if you’re looking for just one to simplify things) that reveals to you visually when a Market is slowing down, making lows and positioning for a reversal would have to be the “Simple Oscillator”. Use the Oscillator Bars instead of the Line and post your Oscillator “on” your screen (behind your candlesticks), do not post it on the bottom pane. Use this indicator on your 30 min. & 1 Hour Charts. Here’s how to work it. Let’s say the Market you’re following is dropping. Wait for the Simple Oscillator bars on your screen to touch down to the bottom of your screen from the “0” line and then they begin to move back up, shortly afterward, the Market will do the same. It to will touch down to the bottom of your screen an then begin to trade back up - this is where you get in. This Oscillator when placed “on” your screen (behind your candlestick’s) will show you just how low the Market will touch down to the bottom of your screen before the Market actually does so. Reverse, of course for an uptrend. Sometimes both the Oscillator & the Market will move in tandem, but the Oscillator is usually just ahead of the Market & oftentimes it is days ahead of the Market on the 30 min. or 1 Hour frames. Try it on a 5 min. chart to get the feel of it. But please, please, please be aware of the Momentum for the particular Market which you are following. Lately I’ve been combining this Indicator with the Parabolic SAR. Regards. Hopes this helps you.
Oscillators only warn of the possibility of a trend change so action should be delayed until price confirms. The first event will be a trend line break and traders will often act on this. Technically though DOW theory says that after the break of a trendline there has to be a peak, retracement then a break of the peak to confirm the new trend. This often happens though well before lagging indicators catch up though obviously it depends on their various settings. Remember that whatever you use, the earlier you make the call the more likely that the apparent trend change is false and you will be caught on the wrong side. Perhaps the most effective way in practice is to look for areas of a chart that indicates a high likelihood of a trend change. At this point reversal candlesticks are immediate, you may have divergence on your oscillator and then a trendline break in addition would be more than enough for me
If you really must have an indicator then the fastest I know is the Ergodic Candlestick Oscillator. It is very fast and it beats anything else.
This is a specialist indicator not found on most charts.
I have used it in my sharetrading.
But you should consider your time frame. A new trend in a 5 minute chart will be nothing in a 1 hour chart!
How can one get access to this Ergodic candlestick oscillator:confused:
To Tegasite :
If the Ergodic Candlestick Oscillator is not already programmed into your list of indicators on your charting software then you will have to find it on the internet - there are plenty of articles on it.
Then you will only be able to use it if you can program write it into your software. I cannot give you a formula here because different charting uses different scripts.
The oscillator comes from a book “Momentum, Direction and Divergence” by William Blau :
The script below is written in Bullscript taken from the Bullcharts stock charting program manufactured in Australia. It is somewhat similar to Metastock programming.
[citation=Momentum, Direction and Divergence, William Blau]
[target=Default; author=Blau, William; category=Oscillators|Candlesticks]
[horzline=0]
n1 := input(“Time periods 1”,11,1);
n2 := input(“Time periods 2”,4,1);
n3 := input(“Time periods 3”,5,1);
eco:=(ma(ma(C-O,n1,E),n2,E)/ma(ma(H-L,n1,E),n2,E))*100;
signal:=ma(eco,n3,E);
[name=ECO]
eco;
[name=Signal;linestyle=dash]
signal
[U]Warning[/U] - consider again your timeframe.
It is definitely the fastest trend change indicator in existance - only direct price action is faster. (Thats why I use candlesticks).
IMHO, You should also realize price - the only indicator that is capable to detect trend, if we could not use it then which indicator could have such an ability as they’re just derived from price.
There is no such indicator or “Holy Grail”. If an indicator reports a trend very soon, chances are that he’ll report a trend-change very soon…
Hey Tymen1, thanks for your response and willingness to assist in this forum(nice chart presentations and answers) but I dont have the slightest idea on how to write programs for indicators/EA…:o but know very well how to use already written one:D
I use interbankfx MT4 platform… dont know if you could still help out?
I dont have it in the list of my indicators… could you assist me on how to get one:)
I am really interested in this your candlestick trading strategy but dont know how to go about it… could you still throw more light into this or you could give me a link that will really help out.
Thanks men
I am slow posting these days on this forum because I am busy trading on the share market as well as forex cfd’s.
To Tegasite :
If you are using candlesticks then you should not be using a trend indicator like the Ergodic. The candlesticks themselves will tell you how to trade. I certainly do not use this indicator - it is redundant.
The price action of the candlesticks is quicker than the Ergodic. Let the losers use this indicator!
I am really interested in this your candlestick trading strategy but dont know how to go about it
The method is fully outlined in the thread where you saw it. What else can i say?
The idea is to trade the extreme of extremes in order to give you an edge.
The Bolinger bands are used bring about this edge.
Once the pattern is seen, combined with the BB, you have an extreme, with a high probability of returning to centre. The 1/5 min charts are used to make this extreme as extreme as possible.
A stop loss is then not needing to be set (caution) but kept in mind if things go wrong - unlikely. This shuts down one big problem, stop loss hunting.
I will be posting again with a new thread of my own in which I show several candlestick successful trades done with this method. They will be real trades done live, ie they are not tailor made just for this forum.
Right now I am just checking a few things. If you follow thro when I post, you will see how it all works.
My method is a semi scalping method - this is not suitable for everyone.
Thanks for responding atall, I have attached a live chart of the GBP/JPY 15 mins… check it out and see if you can get anything out of it regarding your candlestick system. Does this system work with GBP/JPY:confused:
I will also like you to check out this thread where I make my daily post trade of GBP/JPY using the cowabunga trading system using indicators:
http://forums.babypips.com/free-forex-trading-systems/6736-almighty-gbp-jpy-versus-cowabunga-system.html
Info on the cowabunga system can be gotten from:So You’ve Finished The School Of Pipsology…Now What? - Pip My System - Beginner’s Guide to Forex Trading, Free Forex Education, Learn to Trade Forex, Forex Training - BabyPips.com
The thread is:
http://forums.babypips.com/free-forex-trading-systems/727-cowabunga-system.html
Though its been a successful method but its relies totally on ‘lagging indicators’:rolleyes:
That why I will really appreciate it if you can make everything very clear to me regarding your candlestick trading style.
Thanks a lot for the post. Unfortunatelly I couldn’t find the ‘‘Simple Oscillator’’. Where can I download it from?
Thanks a lot
Keep in mind, even tho indicators lag, when a combination is used right, they tell a great story.
EVERY indicator should somehow by linked with momentum,
LOL, I bumped a 5 Year thread,
:30:
whatever you use, the earlier you make the call the more likely that the apparent trend change is false and you will be caught on the wrong side.