*** IMPORTANT NOTE to ALL readers first:
This thread has NO indication about entry or exit nor does it provide ANY signals! (live or not)
but is for testing reasons and discussing results ***
Goal: Finding an indicator that shows the turning point within a chart.
This is not that easy as it looks. Taking a chart and looking back - everything seems obvious.
Finding a signal that indicates where the price is really turning would be a nice help.
With that signal we could take a short at *around* the highest point and wait until the low
signal comes up to sell the short and to take a long instead. And vice versa.
Have tested in the last two years a signal on the Dax which seems to work.
Criteria:
a) Working with price on a VWAP band which starts every trading day new at 0 on full futures trading hours.
b) Looking at occurences when price is crossing the VWAP band boundaries.
c) Checking with the underlying Ichimoku cloud if the signal is valid or not.
d) Validation for a signal needs a move of more than 1% change since last signal.
If a valid signal is created - the trade will be closed / and a new one in the opposite direction will start.
This wil happen on the next bar after the signal (within minutes) - so the absolute maximum might not be reached.
A trade might run several days - so the margin levels of overnight and over the weekend need to be checked with
the broker.
Looking into some charts with next posts.
GFIs1
The following 3 users say Thank You to GFIs1 for this post:
Sounds interesting your new project and I´m curious to your further posts!
Have I understand it correct, it´s a daily VWAP and you enter above/below high/low of the 3 hour chart? And if so, why not entering at 1 hour or 30 minute chart?
Looking on a 1h chart we see the ZigZag which indicates the biggest Hi/Lo of a leg.
The signals are not showed. These signals are detailed in the 3 minute chart as shown above.
Same leg down from above chart is on the right of the hourly chart here (+ 1,19% short).
Within 8 trading days this year we can see the following results (maximum is NOT tradeable as discussed in first post):
Short leg from december 28: 1,53%
Long leg 1,21%
Short leg 1,19% (see details in previous post)
Tradeable around 100 +80 + 80 = 260 points
This looks quite positive.
It is a VWAP BAND... which starts every day newly.
The signal is generated in a 3 minute chart (post 3) - if a boundary of the band is "killed" the system
shows the signal which must then been verified with the other criteria to see if that IS a turning point.
So entering is possible on the next bar of the 3 min. chart.
Last pic is only to show the legs in a bigger picture of 8 trading days.
GFIs1
The following user says Thank You to GFIs1 for this post:
The VWAP band is the essential and main trigger of the signal.
But there are a lot more generated signals that do not show the highest or the lowest point in a chart.
So additional help was needed to filter out these non valid signals and to see only the
turning points to end/begin a new trade. This of course in real time and not lagging by hours.
Here comes the Ichimoku cloud handy in to see if the triggered signal is valid or not.
But the time frame on this use is very essential: as a daily Ichimoku cloud is showing
a very different cloud than on a 30 minute chart - the optimal timeframe had to be found and
tested out.
Optimal timeframe is a three minute chart to see the VWAP band along with the
Ichimoku cloud. Best results came from this combination.
GFIs1
The following user says Thank You to GFIs1 for this post:
Questions about the SL settings answered:
As long as the signals are accurate and valid - a stop loss is easily set in a very tight range.
We think of not going higher on the price "Hi" or not to go lower on a price "Lo". With these
extremes that should not been touched again a SL of 10 points as disaster stop in case of
a turning on a wrong signal seems adequate.
This is restraining the loss to a absolute minimum. If the signals are well the stops will never
be in use.
GFIs1
The following user says Thank You to GFIs1 for this post:
Do you use only the first VWAP StdDev band boundaries and has the Ichimoku cloud to be red for a short trade or do you just considering KijunSen and/or TenkanSen for entry? I´m attaching todays chart and the cloud seems to be bullish at your short entry. Or did you enter prior to posting at the 3 minute candle from 10:51?
