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The only main diff that I see between the TRO Dynamic and the mystery is that TRO wait for retrace as mentioned here : NinjaTrader Support Forum - View Single Post - TRO Indicators
Enter Long when price drops to make new support then retraces back pass cyan line.
Enter Short when price climbs to make new resistance then retraces back down pass magenta line.
any clue as to which is good way to enter? wait for retrace after price drops to new support or climb to new resistance
Can you help answer these questions from other members on NexusFi?
I do not think that the indicator represents any strategy, and I do not attach any importance to the cross-overs. Do not think that SAR strategies can be traded at all.
The only thing I can see on the chart, is two trailing stops, one for a long position and the other for a short position. For long positions, the trailing-stop adjusts itself one tick below the candle, if a new High(5) (highest high of the last 5 bars) has been made, and vice-versa for short positions.
To become an effective method for adjusting the trailing stop, the concept needs to be modified. So you would not move your stop, if a new High(5) is made and the close of that bar falls within the (slightly extended) range of the prior bar.
Small Exercise
Plot a Donchian Channel with period 5. Enter long, if a new High(5) is made and enter short, if a new Low(5) is made. Also see approach of The Turtles and other trend following approaches. The crossovers look better than they are, as you always will enter at the wrong side of the candle. In choppy markets this strategy will post quite bad results.
Fat tail
I plotted Donchian channel with period 5, but sorry to ask this. How do I spot new High(5) (highest high of the last 5 bars) has been made, and vice-versa for short positions.
Whenever the blue horizontal line above the price moves up to a higher price or the line below the price moves down to a lower price. That's all the channel shows, is the high and low for the last 5 periods.
If you look at the chart below, you can see how to use a Donchian channel to enter breakout trades. So far there is no trade management involved. The chart uses a Donchian channel of period 5 and an EMA as trendfilter.
This system is not profitable, of course. The successful breakout systems of trend traders some 20 years ago used a long period Donchian Channel to enter trades and a short period Donchian Channel to exit. This assures that you do not get a cross-over system, but some neutral period in between the long and short positions.
