Yes this is part of an automated strategy, that is why I place so much importance on being able to statistically define things. I think understanding these concepts is very helpful in discretionary trading too though.
I have been running this system live for a few months now after forward testing for over a month with good results. When I first started out trying to develop an automated system I wasted alot of time trying to find the perfect trading signals, ie stop and reverse, always in the market type strategies like most new traders. I had some success with that but it was likely due to curve fitting, the strategies always eventually fell apart in forward testing. It wasn't until I started really focusing on when NOT to trade that I finally started developing some truly profitable strategies.
I currently use 4 range based timeframes, 34, 21, 13, 8 (on EURUSD)
Edit: Forgot that most of you guys trade ES rather than forex, I also trade ES/YM occasionally, on those I use a simpler strategy with only 2 timeframes, 8 and 3 range because there is much less noise and less movement compared with forex market
Last edited by sefstrat; July 12th, 2009 at 02:59 AM.
Since several people have asked me about it, I created a simple SNR indicator based on keltner channel. It is posted in the downloads section.
Here is a screenshot comparing it with the my proprietary SNR indicator, you can see that they are very similar.
The blue line is a moving average of the white line, when blue line is sloping up that means the market is trending. When it is low or sloping down that means there is alot of noise or noise is increasing so it is probably not a good time to trade.
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