Simple, pure mechanical H4-System, EA ne is required
Hey traders!
I want to introduce a very simple system that requires no explanation or judgment.
All you need is an H4 chart and the DeMark indicator (attached). Do not change parameters. Use as is.
Entries (I only describe long entries):
If you see a red circle at the top of the bar, this is your entry level.
You place a long order at the top of the bar + 4 pips + spread.
Stop loss is located 3 pips below the last blue circle.
You only use the current red circle. If there is no more than the last one, ignore it.
The red circle shows a bar with two bars with lower high points on the left and two bars with lower high points on the right. Therefore, the circle appears three bars later at the earliest (because the indicator waits for the two lower high bars on the right + the current bar).
Two possible exits:
1. Stop loss, that is, trailing stop loss
2. Exit when the next bar with a red circle appears (see description below)
I think the best way to describe it is to look at a chart.
You'll see a yellow check mark where the first bar with a red circle appears. The top of the bar is your entry level. The circle appears on the bar with the yellow arrow, which this time is also your entry bar, as it breaks the red circle setting the height of the bar. Remember, you can only see circles after 2 completed bars!
Okay, now we're pretty long. The initial stop loss is located 3 pips below the last blue circle. The next bar is another red circle bar (the long settings bar), but we don't know that yet! As the bar opens, the circle appears three bars later. Now comes the exit rule: we wait for the close of this bar and close the position as soon as the next bar opens. In this case, it means that the trade has been closed through the yellow horizontal line. The bar before you see a very long bar has a red circle (marked with a light blue tick) and then the trade closes at the open of the next bar.
This time it looks silly as we close the old trade and go long again. The light blue checkered bar is a long setup bar above which 4 pips (+spread) will trigger a long trade. This trade is very good because you can see the next red circle is at a very high level and we don't need to exit early. As soon as each new blue circle appears, we move the stops to them. In this case, you will see a light blue cross on the bar where we were stopped. The opening of this bar happened to cause the blue circle to appear three bars before it became visible, and our stop was moved to this position. Now we're even.
But this time we have a brief setup. The white tick shows the first short setting. Enter a short trade 4 pips below the lowest point of the white grid bar. Therefore, we are stopped (3 pips below the short setup bar) and reverse the position here (4 pips below). Now we have a short trip and the red circles are just for stops. So our initial stop is very high above.
Unfortunately, there is a new blue circle at the bottom of our entry bar. But we can see that three bars later. The exit rules state that I have to wait for the close of the current bar and close the trade on the open of the next bar (white cross). That's a small loss.
I wish I could explain how this idea got stuck in my crazy brain... ;-)
If someone could make an Expert Advisor for this I would be very grateful as it is 100% mechanical. Additionally I want to test some other parameters. If the DeMark parameter LevDP is set to 3,4,5,6... instead of 2, maybe the system will work better. But remember, if you use for example if LevDP is 5, then you can see that the circle is not after 3 bars, but after 6 bars! LevDP defines how many bars on the left and right must have lower highs! If you can write an EA, please consider it!
It's also possible that it's better to use 6 pips as a buffer for placing trades, rather than the 4 pips I describe here.
That's it! Thanks for the comments, ideas and help!
More
Detailed information about the Hannover DeMark indicator can be found in this thread: http://www.forexfactory.com/showthread.php?t=37073
I want to introduce a very simple system that requires no explanation or judgment.
All you need is an H4 chart and the DeMark indicator (attached). Do not change parameters. Use as is.
Entries (I only describe long entries):
If you see a red circle at the top of the bar, this is your entry level.
You place a long order at the top of the bar + 4 pips + spread.
Stop loss is located 3 pips below the last blue circle.
You only use the current red circle. If there is no more than the last one, ignore it.
The red circle shows a bar with two bars with lower high points on the left and two bars with lower high points on the right. Therefore, the circle appears three bars later at the earliest (because the indicator waits for the two lower high bars on the right + the current bar).
Two possible exits:
1. Stop loss, that is, trailing stop loss
2. Exit when the next bar with a red circle appears (see description below)
I think the best way to describe it is to look at a chart.
You'll see a yellow check mark where the first bar with a red circle appears. The top of the bar is your entry level. The circle appears on the bar with the yellow arrow, which this time is also your entry bar, as it breaks the red circle setting the height of the bar. Remember, you can only see circles after 2 completed bars!
Okay, now we're pretty long. The initial stop loss is located 3 pips below the last blue circle. The next bar is another red circle bar (the long settings bar), but we don't know that yet! As the bar opens, the circle appears three bars later. Now comes the exit rule: we wait for the close of this bar and close the position as soon as the next bar opens. In this case, it means that the trade has been closed through the yellow horizontal line. The bar before you see a very long bar has a red circle (marked with a light blue tick) and then the trade closes at the open of the next bar.
This time it looks silly as we close the old trade and go long again. The light blue checkered bar is a long setup bar above which 4 pips (+spread) will trigger a long trade. This trade is very good because you can see the next red circle is at a very high level and we don't need to exit early. As soon as each new blue circle appears, we move the stops to them. In this case, you will see a light blue cross on the bar where we were stopped. The opening of this bar happened to cause the blue circle to appear three bars before it became visible, and our stop was moved to this position. Now we're even.
But this time we have a brief setup. The white tick shows the first short setting. Enter a short trade 4 pips below the lowest point of the white grid bar. Therefore, we are stopped (3 pips below the short setup bar) and reverse the position here (4 pips below). Now we have a short trip and the red circles are just for stops. So our initial stop is very high above.
Unfortunately, there is a new blue circle at the bottom of our entry bar. But we can see that three bars later. The exit rules state that I have to wait for the close of the current bar and close the trade on the open of the next bar (white cross). That's a small loss.
I wish I could explain how this idea got stuck in my crazy brain... ;-)
If someone could make an Expert Advisor for this I would be very grateful as it is 100% mechanical. Additionally I want to test some other parameters. If the DeMark parameter LevDP is set to 3,4,5,6... instead of 2, maybe the system will work better. But remember, if you use for example if LevDP is 5, then you can see that the circle is not after 3 bars, but after 6 bars! LevDP defines how many bars on the left and right must have lower highs! If you can write an EA, please consider it!
It's also possible that it's better to use 6 pips as a buffer for placing trades, rather than the 4 pips I describe here.
That's it! Thanks for the comments, ideas and help!
More
Detailed information about the Hannover DeMark indicator can be found in this thread: http://www.forexfactory.com/showthread.php?t=37073
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