KeyFinder - MetaTrader 5 Script | Trading Script Download - MT4/MT5 Resources

For a long time I used the Thomas DeMark system for research and trading, and used indicators from Bill Williams' fractal trading process.

My trading experience has found that one factor that leads to very poor trading results when constructing trends based on Demark pivot points and Williams fractals.

I analyzed these results and identified an important assumption made by the above-mentioned authors. I'm talking about using fractals or demark pivot points to build trends. When determining the dimensions of a point or fractal, both authors place a limit on the number of dimensions expressed by the "no less than" rule. Williams used the "no less than two bars" rule, and DeMarco did not limit the number of bars, but he also used the "no less than" rule. For the sake of clarity, I'll try to illustrate the difference.

Figure 1. Key points determined by DeMark using Williams fractals and their dimensions

Let's remove the "no less than" restriction and count the number of bars to the left and right that are lower/higher from the key point. The minimum value is the true size of the keypoint.

Figure 2. Real size of points

Using this approach, we significantly changed the appearance of the chart.

Figure 3. RTS Index Futures Contract Chart

Now it is clear what DeMarco means when he says that trend lines should be constructed from points of the same or close size. Furthermore, building trends through points in different dimensions produces random results, which is why failures often occur.

Figure 4. Trend example

In order to promote the "correct" way of setting up trends, I wrote a script for the increasingly popular MetaTrader 5 platform. This script displays key points on the chart and displays their dimensions.

It's easy to build trends using this script. An indicator is on the way!

About the script:

The script has only two adjustable parameters.

The script uses a loop to process the chart, that's why I don't recommend processing more than 1000 bars, as this can lead to very long processing times. If the script cannot calculate the dimensions of a point (for example, due to limitations on the number of bars to be processed), it marks the point with a colored ball.

I would be grateful for any feedback, suggestions and comments. Good luck with the transaction!

Attachment download

📎 keyfinder.mq5 (6.63 KB)

Source: MQL5 #12382