FREE EA - Zig and Zag (FIFO Compliant Ya!) (FREE EA - Zig and Zag (FIFO Compliant Ya)

That's it!

Some of you may have come to this topic through the link I posted in the first topic "Free EA - Piggy n The Middle" and some not.

Here is the link to my first thread: http://www.forexfactory.com/showthread.php?t=587001&goto=lastpost if you haven’t visited it yet. It is a grid EA thread that I created inspired by the Remon Reffat strategy, but it is not similar to it in many ways. If you want to visit, you can read more about it.

During the saturation phase of my first EA, I started using the level 3 ZZ Semafor indicator, which I believe is a very useful indicator in many applications. I'm developing this particular EA and it's at an advanced stage enough for me to post here, I hope it replicates what traders should be doing when trading with indicators as close as possible.

For those of you who know me, I don't like metrics at all. My background is in Elliott Wave Theory and the Gann Trading Method and a few other strategies that involve very few indicators at all, unless you consider drawing trendlines on indicators.

In this EA, I first started with level 3 Semafor and tried to replicate the actions of identifying the following.

1. Identify the highest highs
2. Wait for the swing low, then wait for the final swing high
3. Re-entering after breaking out of the swing low
4. and the opposite of the buy situation.

Unfortunately the 3 Level Semafor redraws very badly, but I did manage to fix that. I also managed to make it trade reasonably well, but not to any degree of satisfaction worthy of being released in FF or trading in a live scenario.

Too...what have I done? I opened MT4 and looked through the codebase to see if there were any indicators worth using. I like to study indicators in their raw nature and see what they can do on their own. I still think most of it is garbage! However, I filtered the indicators on MT4 based on 5-star and declining ratings. I never got to 4 stars, maybe 4 1/2. Downloaded again and again, I don’t know how much I downloaded. Probably around 50 or so to start with and making a note of where to start, as if I don't find anything else I'll continue to see if there's anything worth pursuing for good metrics.

I wouldn't say what I found was some kind of golden indicator. This is not the case. Most indicators require proper evaluation to decide which currency pair to use with them, not just the time frame. From the OOTB (out of the box) setup I found that using the GBPJPY currency pair on the 5 minute TF works best in my opinion.

System (default setting)

1. Level 3 Semafor is identified by number (3) as HH or LL
2. Another indicator is another Zig Zag indicator called StreamAmp ZZ. This is an indicator for entry signals.
3. Entry to Buy: Semafor (3) The high and crossover from blue to orange must occur within the predetermined range from the bottom. Looking back 1-10 candles from the current bar is the default setting.
4. Entry to Sell: Semafor (3) lows and the crossover from blue to orange must be made from the top crossover downwards. within the predetermined range. The default setting is to look back 1-10 candles from the current bar

Since version 1 of this EA, I decided to edit this POST 1 with version 2 since the original EA has the same closing and opening conditions. Although v2 works well, there is no doubt that it is a better system.

I think the default settings work best for GBPJPY's 5 minute TF.

*** Please note that I left the breakeven point option on this EA but did not find it entirely profitable in testing.
*** If you do not want to use this setting, you should set it to the same as your Take Profit.

I've attached everything you need to set it up. Note that you don't need an indicator on the chart to achieve this. It will only slow down the backtest, although you should run it a few times with the indicator turned on so that you understand what is happening and how the EA trades.

I personally follow GBP/JPY more than any other currency pair. I've noticed that the GBPJPY setup doesn't perform well on other currency pairs. Also, I do think that the 5 Minute TF is the best TF to use, although you have the ability to change almost anything you can experiment with.

For more information, I thought it would be useful for you to know about some of my trials and errors in this regard.

1. Too many lookback candles can trigger bad trades
2. Not enough lookback candles will trigger fewer trades and may trigger better trades on different TFs.
3. I believe the best setup is to backtest your currency pair and TF for the best trailing stop, and only use this setup!
4. For GBPJPY on the 5 minute chart I think the value is 60 pips

I think that’s it!

What I want to do is find another or maybe two indicators to filter out bad trades. I'm willing to try anyone's idea as long as you can prove to me that it works. Otherwise, I will spend too much time on any published ideas.

If you are going to be involved in the development of a filter indicator, I will need a running screenshot of the indicator of your choice, and I would like to see where it can avoid full stop loss trades on both sides of the trade without making good trades.

I don't expect to have 100 screenshots for every scenario, but at least show me screenshots of buy and sell conditions that won't trade with your chosen indicator, and let me know that you've checked a fair number of backtest conditions to show that you don't think it will interfere too much with profitable trading.

Happy Pippi!

Hopefully this thread will be as good as my first one, if not better!

Let's Make This Work!

Daniel