Spud's Lab Accident | Forex Indicator Download - MT4/MT5 Resources
One night, I was working late in the lab, and suddenly my eyes saw a creepy sight...
(Lyrics provided by Monster Mash)
This started as an experiment with MACD and has actually been backtested well enough to put here in case you might want to forward test this super simple system. It may need some tweaking, but in a nutshell:
M5 Chart EUR/USD
MacD (color) 5,13,1 (no level)
Stochastic (%K only): 100, 3, 3 low/high simple levels 76.4 and 23.6
Stochastic (%K On;y): 14,3,3 Low/High Simple (Stochastic in the same window)
Long entry validation (all validations must be true):
1. 100,3,3 (yellow)%K line must be lower than 23.6%
2. Before entering the market, the 14,3,3 (red) %K line must have passed below the 100,3,3 %K line
3. MacD bar must move up (color change) - signal bar
4. There must be at least 4 MacD bars moving down (opposite colors) before our signal bar
Short entry validation (all validations must be true):
1. 100,3,3 (yellow)%K line must be above 76.4%
2. Before entering the market, the 14,3,3 (red) %K line must have crossed above the 100,3,3 %K line
3. MacD bar must move down (color change) - signal bar
4. There must be at least 4 MacD bars moving up (opposite colors) before our signal bar
Must exit:
When we get 4 MacD bars of opposite color in a row as our trade (we have to exit on the close of the 4th bar) or we have to exit based on the opposite entry signal.
theory:
100,3,3 Stochastic simulates price movements, except that it converts prices into a range between 0-100%. Therefore, when the price is close to 100%, the price is exhausted and rising; when the price is close to 0%, the price is exhausted and falling.
MacD and 14,3,3 stochastics keep us away from oversold and overbought markets.
The MACD 4-bar rule prevents zigzag moves.
Overall, this system is capturing price at the end of a trend and looking for reversals...with very little risk as this is a hit or miss strategy with tight stops. The overall pip value gained from a successful trade should overcome the small losses caused by mistakes. Drawbacks should be minimal. The challenge is to exit before we have to in order to maximize the PIP benefit.
Aggressive trading - use MACD bars sparingly, ignore crossovers, use crossovers below 38.2 or above 61.8.
Stop Loss - Entry candle low/high +0-20 pips.
The image below is an example of a long and short trade. The green line is the entrance and the red line is the must exit. You can exit with positive PIPS at any time, but you must exit when a signal is received.
I've also included indicators and templates.
(Lyrics provided by Monster Mash)
This started as an experiment with MACD and has actually been backtested well enough to put here in case you might want to forward test this super simple system. It may need some tweaking, but in a nutshell:
M5 Chart EUR/USD
MacD (color) 5,13,1 (no level)
Stochastic (%K only): 100, 3, 3 low/high simple levels 76.4 and 23.6
Stochastic (%K On;y): 14,3,3 Low/High Simple (Stochastic in the same window)
Long entry validation (all validations must be true):
1. 100,3,3 (yellow)%K line must be lower than 23.6%
2. Before entering the market, the 14,3,3 (red) %K line must have passed below the 100,3,3 %K line
3. MacD bar must move up (color change) - signal bar
4. There must be at least 4 MacD bars moving down (opposite colors) before our signal bar
Short entry validation (all validations must be true):
1. 100,3,3 (yellow)%K line must be above 76.4%
2. Before entering the market, the 14,3,3 (red) %K line must have crossed above the 100,3,3 %K line
3. MacD bar must move down (color change) - signal bar
4. There must be at least 4 MacD bars moving up (opposite colors) before our signal bar
Must exit:
When we get 4 MacD bars of opposite color in a row as our trade (we have to exit on the close of the 4th bar) or we have to exit based on the opposite entry signal.
theory:
100,3,3 Stochastic simulates price movements, except that it converts prices into a range between 0-100%. Therefore, when the price is close to 100%, the price is exhausted and rising; when the price is close to 0%, the price is exhausted and falling.
MacD and 14,3,3 stochastics keep us away from oversold and overbought markets.
The MACD 4-bar rule prevents zigzag moves.
Overall, this system is capturing price at the end of a trend and looking for reversals...with very little risk as this is a hit or miss strategy with tight stops. The overall pip value gained from a successful trade should overcome the small losses caused by mistakes. Drawbacks should be minimal. The challenge is to exit before we have to in order to maximize the PIP benefit.
Aggressive trading - use MACD bars sparingly, ignore crossovers, use crossovers below 38.2 or above 61.8.
Stop Loss - Entry candle low/high +0-20 pips.
The image below is an example of a long and short trade. The green line is the entrance and the red line is the must exit. You can exit with positive PIPS at any time, but you must exit when a signal is received.
I've also included indicators and templates.
Attachment to original post (2)
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