Eric Johnson

Here are the forex.com Metatrader overlay indicators and profiles. If you find a forex.com USA platform with stocks and commodities, that is a benefit. These are extremely busy charts for many pairs, but they are organized into charts that have somewhat correlated pairs. They look somewhat like the busy chart 2 posts back. To scan them flick through them looking only at the extreme separations. Backfill and edit them as in the previous post. I also have the 5 minute profiles here. They are the same layout as the 1 hour, but I put different notes on them. Disregard or delete any of the chart notes. You can make measurements of separations by clicking and dragging the cross hairs. 5 min correl g second.zip CORREL FXF 1 latest.zip CORREL FXF 2 latest.zip correl one 5 minutes.zip FXF Overlays.zip

Here are the indicators and profile for the overlay charts seen in the last post pics. These are a limited list for most standard Metatrader platforms. I run these on Oanda MT. To make your own overlay charts, drag the custom indicators from the Navigator menu to a selected chart. The first one will appear in a lower window. Drag the pairs to overlay onto the same lower window. If you double click on the colored line, it will show you the name of the pair (or mouse over, but could be mislabeled) I always have my Native chart indicator show up in white. Backfill is a job in MT, you may have to make individual charts and backfill them separately with the page up key. These are a limited list of pairs, are weakly organized, and are kind of old news for me. The advanced, but complex indicators are in the next post. These are OK for an intro to overlays, but the EJV is far more important to learn to use. Line overlays not FXF.zip INDIVIDUAL Correlations and mega.zip

I built my general correlations on charts similar to the example of the EUR/USD GBP/USD that I posted previously as an example. It is hourly bars converted into a 2 SMA line chart, overlayed. I am looking for the basic visual confirmation that the pairs tend to travel up and down in similar patterns over months. More importantly, I need to confirm this with the EJV indicator, this lets me know that the pip difference is cycling in a range. I want the range to be consistent enough to base trades upon when the pairs are far separated. Day bars are not enough intraday detail. I am not looking to trade absolute historical separations a few times a year and hold them for months. I want to be able to reverse strong hourly trends, that have run long and short, on normally correlated pairs. These have the combined factors working to put on the trade in the direction of the spread coming back together. Highly correlated pairs are best, because the trades pay off quicker. I can trade non correlated pairs also, I just need to see that on my indicator EJV, that the expansion and contraction pip range is consistent and looks tradeable. I am looking for a few factors for a good trade. I use the line overlay charts as a radar for possible wide spread pairs, that normally cross. I then check them on the EJV to make sure that the distortions on the line overlay charts are not misguiding me. If the EJV histogram looks good for long term range oscillation, I evaluate entering the trade. On the EJV histogram I look for a few factors. First is the speed or angle of separation. If it is fast and wide, the chances of it coming back together some, are good. I do not trade the histogram back to the zero line, I exit trades at support and resistance lines once I am in the profit. These lines can be on the histogram, or in one of the pairs, but I close both. The second factor is the historical magnitude of the separation I go back at least 12000 hourly bars and set the histogram (shrink) to fit in the display window. I want to be near my historical extremes, with a recent rapid expansion for ideal trades. Then I should confirm on the 5 minute EJV histogram that the pairs are also looking separated in the same manner. That confirms that the market is ready for an immediate contraction. These trades are hundreds of pips profit, or drawdown. The precision is necessary. I will post soon my advanced line overlay charts to make more clear their look, along with more screen shots of the EJV and what I am looking for. For now I will post another line overlay chart. Each color represents a different pair, and you can see how some pairs can be spotted as usefully correlated.

Here are the EJV Metatrader profiles and indicators (bulk pack) for the forex.com FXF extension platform. It is to help people experiment with. Backfilling may need to be done with individual charts. Deactivate the auto scroll and use the page up key to backfill the proper time period. There are unnecessary indicators in the pack, and some for regular Metatrader platforms. Make sure you unzip to the proper level to paste into the Metatrader program files. JM HOURLY STACKS 1.zip RANDOM HOURLY JM.zip RANDOM HOURLY SECOND.zip STACKS 5 min JM.zip RANDOM JM 5 MINS.zip RANDOM 5MIN II.zip indicators.zip

Here is the brief details for the Metatrader profile and indicator pack. First of all, if you unzip all of the indicators and bulk paste them into your personal program files-metatrader- experts-indicators, there is a chance that metatrader may make some of your standard indicators not accessible, this is a bug in MT. Too many indicators installed can make the lower ones gray out and not available. I promise this is not BS for some kind of virus. I recommend a fresh download demo account of Forex.com USA version to try these installs. The profiles may or may not work on other MT versions. The profiles get unzipped and files located, and pasted into the MT profiles folder, restart the platform. Dump all of the correlation overlay indicators if you want less indicators installed. I also have a multi line correlation chart open on the platform, if you do not like it close it, it is a nice total market movement radar. Also the alerts are set the way I like them, you can set them or remove them to your liking. The ADX have the DMI lines still on them, this can make the indicator hard to read, just change their color to none if you do not like them. I use them for DMI expansions, something I have not covered for reversals. My format notes. If the ADX 60 has a bold yellow line, it means that the currency responds well to the 60 ADX trades. The blue notes are regarding my opinion on rating of the RSI reversal trade (AA,BB, CC, for example) . For ADX 14 reversals and 14 RSI combo reversals, the note says ADX reversal. There are many personal level settings, do your own backtesting and customization. Daily pivots and MA's are on the chart, just remove what you do not like. I just post this for guidelines, but it is the actual setup that I use. Good luck with what ever style interests you. RSI REVERSAL FORMAT M5.zip indicators.zip

Here is where the market scientists part of the forum comes in. You are going to learn to control the graphic display that is normally automated by the computer. If you follow the logic, you will see why I did the EJM programming to set enable capturing specific measurements. Here are the input parameters with defaults Pair1 = "GBPUSDFXF"; **!!! Always the currency of the greatest numerical value Pair1_digits = 0.0001 ; * leave this alone if not a Yen pair If_yen_pair_0.01_not_0.0001 = "X" ; * change the above “digits value” to 0.01 if yen pair Pair2 = "EURUSDFXF"; Pair2_digits = 0.0001 ; * change the above value to 0.01 if yen pair P1WeekOpen = 1.61; * GBPUSD current price level – disregard “ week open” idea P2WeekOpen = 1.42; * EURUSD current price level Scale_factor = 5000; * this is the vertical stretch of the display histogram For_yen_try_50_not_5000 = "X" ; * if one or both of the currencies are a yen pair change the scale factor to the 15- 100 range Lookback= 4000; *number of bars back histogram is displayed, important for not bogging down computing power on the charts, also can adjust the total number of bars on the chart from the main MT menu tools, options, charts I will begin the details of setting up a workable chart. I will soon release the profiles that I have set up to save time and for examples. The reason for keeping the highest value pair as #1 is that when it comes time to place the trades you need to know the direction. If the histogram is above the zero line, sell pair #1 buy pair #2. If the histogram is below the zero line, buy pair #1 sell pair#2. Yen pairs have different decimals, so I had to program in compensation for them. Do as the * instructions say. If the pair #1 is a yen cross, change the digits to 0.01 for pair one. You can have pair #2 be a non yen pair, or a yen pair also. You set the week open value to the present price now. After you display the histogram, it is here that you adjust the up and down orientation of the histogram. Only use pair one and move it a few pips. For instance if the histogram was above the zero line too high, I could change the number from 1.60 to 1.65 . Each chart must be independently tuned. You want a lookback of at least 12000 bars. This placement of the histogram to zero line is aiming to have the histogram oscillating above and below the zero line over the last 6000 bars in general. You will probably need to set the scale factor first. Both of these are general setting estimates, you are really looking for fast and far separations. They will show up better if you adjust your settings properly. Once set up, I adjust lookback to 4000 to save computing power. The scale factor I set by scrolling back 12000 bars (and setting the lookback to 12000 temporarily). I reduce vertical stretch scaling (scale factor) until the highs and lows fit on the chart. I know they are highs and lows because they keep continuing to the zero line eventually. Work with the week one (P1) open value to center at times. It is possible that the pair just changed real pip ranges as seen on the day bars ( had a major range change). Usually with scale factor adjustments down by 1000 at a time, the chart looks useable. Any histogram with a Yen cross can be scale factored from 15- 100 units range. I know this sounds complex, but with practice is not that difficult. My preset templates will be helpful also. Oh yes, Meta trader backfill. Sometimes I need to make individual blank charts with the correct time frame. Then I turn off the auto scroll. Use the page up key to backfill the chart, then the histogram will backfill when the program is restarted. So with all of that detail, I will soon post what to look for with your set up charts. I have 1 hour and 5 minute chart profiles I will release to get you started. I am sure I will want to edit and add to this page, but I wanted to give a taste of where this is headed. My coding programming I am sure is far from properly copywrited or refined, it has been tested and used, hope it is useful. ''JM_Vari-BEST lookback yen 10 INVERSE positive up.zip

I will now advance to my version of the JM Variance. I will rename it to the EJ Variance (EJV) for clarity form the original designers work. The attachments will still say JM Variance versions though; I do not want to disrupt the Metatrader profiles looking for my working title files. From the picture you can see a yellow line chart, this is a 2 EMA overlay of the hourly bars of the EUR/USD. The white line chart is of the NZD/USD. This was created by dragging my custom indicators from the navigator menu onto the same lower window. ****** An early and IMPORTANT note, my preferred Metatrader is the forex.com USA (not UK, but that will work). It has the most currency pairs, stocks, commodities, and indicies available that I like to work with. Even then, there are different versions of the USA platform, they all have the currencies that work with the FXF extensions on them. Only the overlay line charts and profiles that I give are platform dependent. I have some of the line chart overlay indicators for normal Metatrader available and will try to clearly post these. My JM Variance indicators (EJV) are not specific and accept either format of currency input in capital letters. For example EURUSDFXF is valid for a forex.com platform. For most all other platforms the input is EURUSD. The bottom window of the picture shows the pink histogram. This is the EJV indicator. It shows the true pip difference between the EUR/USD and NZD/USD. Due to the prices of each pair being on different scales there is some work to be done to set up a useful chart that does not auto scale. That is part of the challenge. The overlayed line charts are very unreliable. They rescale as you scroll them, introduce more lines, and even change on different monitor resolutions. They are useful, but I will cover them in a different post. I will get into the nuts and bolts of the EJV indicator in the next post so you can better understand why it is a useful tool.

I will try my best to be useful with the questions. Honestly I got deep into the chart technicals not really even knowing what a "hedge fund" really was. So I hope others will accept the invite to add knowledge. I say hedging because if you are working with 2 positively correlated pairs, even if both of them rise, if I am short one and long the other there should be a hedging effect. I do not care where they go, just that they come back together in pips and correlation. I think spread betting is a slightly different type of arbitrage, but I am fuzzy on that technique. I have seen systems that use leading and following indicators, and some of Jason Fielders work, I think that mine is different. Do no I do not use leaders. I do establish a top pair to sell, and a bottom pair to buy. As for my time periods, I prefer to trade hourly based charts, and the trades can last for days to weeks. I can trade 5 minute bars also, but do so less these days with mega trends like the EUR/USD declines. I will show a chart as an intro. This chart is to give a beginner the allure of correlation trading. It is far from the whole story, and far from the advanced charting I will soon move to. The picture shows the GBP/USD chart in red line EMA form. The top window is the green bar chart of the same GBP/USD. The yellow line chart overlay is the EUR/USD with a similar proportional accuracy. For months you can look back and see these pairs separate and come back together. If you could just measure the separation maximum averages, and trade them back together, you could not lose it seems. I mean, if the red is on top, sell it and buy the yellow on the bottom until they come together. This is a simplistic and distorted view, but the basic concept is true. It just takes some advanced tools to see and measure clearly. I do appreciate the questions, let me know if I can be more clear.

Hello, I am starting a thread regarding the idea of trading positively correlated currency pairs. I read the extensive postings on other threads and have developed some tools that I find useful. I have been trading these new tools successfully for about a year now. Basically I first developed my own ideas and charts, then adapted some of the ideas from the other posters. I will have to see how this works with posting links to other trading forum websites. I was going to post this in context to a mega thread dealing with this subject. I was limited in my posting options, so I will post it on this website. I will begin with a nice customization of another person’s work to show where my work diverges from their main thread. The idea of the JM Variance was posted early in the major thread here by the developer JM1941. http://www.forexfactory.com/showthread.php?t=160912&page=29 It had more floating variables and intensive displays than I wanted for my systems. It was abandoned early on in their thread, and was replaced by a stochastic system. I do not care for the stochastic system much, due to stochastic flattening at tops and bottoms. I want precision and accuracy, avoiding rescaling, and light programs that I can run on multiple charts. Hedging can involve hundreds of pip draw downs, and something like a flattening stochastic can be costly. As far as I could tell, most of the posters found their results to be moderate and mostly resigned to demo trading and further development. My development focused on trying to get clear measurements for when positively correlated pairs are separating enough to trade back together. Here is a parable to give an idea of the challenges and task. If I were going to mechanically measure the ocean ripples at two different bays over long periods, I would have to set up measurements. First the tide levels would have to be compensated for. These are the major daily bar trends. Next the individual waves would have to be filtered or compensated for. These are the hourly trends and chop. Finally one could get down to trying to get accurate measurement and comparisons of the ripples created by the wind (5 minute charts), and contrasting them to the other bay, in real time. So I went to work reprogramming the JM Variance to be able to compensate and freeze some variables, so I can measure what I choose. After this is presented, I will go on to share my extensive correlation charts and profiles. I do not use the standard numerical correlation websites for choosing positive pairs. I find that a visual overlay chart is better for this. I am well aware of the distortion factors. For the reason that a 2 pairs move apart (hence show low correlation) before I want to trade them back together; numerical correlation charts are not my preferred method. For distance of separation and speed of separation, I use my version of JM Variance. Correlation (hedging) trading is a fairly complex endeavor. I have taken it to many levels, including trading currency pairs against indices, stocks, and commodities. The draw downs can be staggering, the news drastic, and trades can last for weeks. It is not something to quickly jump into. The concepts of scaling, tuning and measuring are not a precise science. The wild cards like the Swiss Euro intervention can throw off historical correlations, possibly for all Swiss related pairs. I stay with correlation trading because it is a good way to use minimum lots to get very long pip gains. I have tripled accounts in a few months. I also can rest in hopes that the offset correlations are strong enough to compensate for major market swings, and my drawdowns hopefully minimized. Also I have confidence to ride long trends and reversals, because I am somewhat hedged. These concepts hopefully will become clearer as I show charts and strategies. There is a real beauty in just watching my open trades fluctuate until they are well in the profits. I have a real confidence that the correlations will bring the pairs back together as they have thousands of times before.

MACD upper lower #5 This is a MACD upper and lower level alert. ---------------------------------------- Here is the RSI alert, it has the basic overbought and oversold alerts. It also has the ability to choose the bar close with value zero, or median bar value 4 (entered in the “ apply to” input). My special addition was to allow the alert to sound once, or repeat by choosing true or false on the inputs. The program does work, but at times Metatrader has difficulty properly processing alerts and the repeat is slow to deactivate. ,,RSI-Alert reversal sys4 repeat alarm option.zip #MACD upper lower alert mine 5 repeat.zip

Envelope ADX 4 alert combo This is a nice indicator alert that I put together to filter conditions. If the price is outside your preset ema envelope, and is above the ADX preset level----- then and only then should you get an alert. Note Metatrader has problems shutting off repeating alerts at times, and can delay alert starts occasionally. -------------------------------------- ADX ultra 2 tuned This is an advanced ADX indicator that lets you choose an alert for the ADXR level above. It also allows an alert if either of the DMI cross above your preset level. ----------------------------------------- ADX alert play blue 4 a simpler alert only alerting for the ADXR crossing above your preset. ENVELOPE ADX 4 alert.zip ADX. alert play blue 4.mq4.zip ADX. alert ultra 2 tuned .mq4.zip

I am posting these ideas a bit quickly, I hope that any questions can be responded to with clear reference to the strategies being presented. Also I would like to give people a chance to take a look at the historical accuracy of the setups. That is where the excitement starts. To add more indicators to the pile is not that interesting. The accuracy and profitability of each strategy is what should motivate developers and traders. I will continue with the RSI 14 and first add an ADX 14 (not ADX 60). Hence to be referred to as the RSI ADX 14 Reversal setup. The idea is to wait for the ADX to go above the 62 level, and the RSI to go above the 76, or below the 24 level. Then use the price bar level when those conditions are met, to establish an assumed level of return (ALR). That means to begin adding reversal positions gradually assuming that price will eventually return to your ALR level. This can be seen on the photo RSI ADX 14 reversal. Also shown on the photo is the introduction of a peripheral, but interesting MACD usage. The MACD is a 2, 30, 30. You can see that I marked (many months ago) levels on the histogram. I can use these levels to establish ALR levels, or reversals that I stack and trade to exit at the 50 ema. The idea for developing ALR levels is to go back historically and look at how they preformed, draw downs, and worst case scenarios to avoid. I posted a photo of what to avoid with this set up. Again it is a tight channel breakout. Also formations, news, gaps, or weekend openings should be considered reason for caution. Here is my list of pairs that trade well with this RSI ADX 14 set up. AUD/CAD, AUD/USD, AUD/NZD (wide spread), EUR/CAD, EUR/CHF, EUR/GBP (enter late and light), EUR/JPY, GBP/JPY, and silver USD is worth taking a look at with these settings. This is on the profile I will soon post.

I will be presenting a variety of tools for scalping 5 minute (later 1 hour) bars. I find that the advantage of having many tools to choose from is the following. The markets change daily, a trader may have to wait many hours for trending trades. When trends do form, the trade opportunity may be negated or compromised by many factors such as overnight wide spreads, or soon coming announcements. This kind of waiting and rejecting trades can lead to traders entering borderline or weak setups. It is best to have a variety of well researched trades to choose from, the best setups, along with the best pair spreads. Although these setup ideas are related, each component has a high probability of success if traded independently. The additional tools are for confirmation and screening. It is nice to think that a single squiggly line indicator and some simple price action can see the future for highly leveraged precision scalps. I find that a combonation of filters and confirmations are worth the time to investigate and learn to use. Now I will add the RSI to the ideas being presented. This is a basic oversold and overbought oscillator application of the 14 RSI. The advantage is identifying the currency pairs that trade well with it, and later adding the ADX as a reversal tool confirmation. On the picture you will notice I show a ATR 10 indicator on the bottom. The RSI 14 has the 76 and 24 levels marked. When the indicator touches these levels, look for a 10-15 pip price reversal. This is a weak scalp, but often works as shown in examples B, C, D, and ran for many pips. The stronger method is to use the price level of the RSI touch as an “assumed price return level”. This means that I will gradually begin stacking reversal positions, expecting price to return to the RSI touch level. If you look at the photo the assumed price return levels are shown on example A,F, and G with the colored horizontal lines. Notice that the drawdown for example F was near 100 pips. You could have barely gotten the 15 pips on the touch of the 24 RSI level, or better stacked gradually for a return to the assumed price return level. Notice how the bottom ATR indicator can help evaluate the strength of your RSI trade. If the ATR is above the .12 level reversals are generally stronger. You can see in example F that the ATR level was very low and to be cautious. Avoid tight price channel breakouts. The ATR can be used to see another kind of breakout to avoid. If the ATR has been very low for an extended period of time, the breakout of volatility can have weak reversals. I grade and text on my charts the quality of RSI reversal potential. It is a school style A to F scale. Here are my top picks. AUD/CAD A, AUD/JPY A, CAD/JPY B, CHF/JPY C (make sure is in oscillating conditions), EUR/AUD B, and EUR/JPY C. I posted an example of a channel breakout that RSI reversals should not be used on. This technique, like the others can involve large drawdowns, so do your own historical review and order sizing. I will soon post the RSI alert. This reversal strategy will have an ATR added to it to catch more moves and long trend reversals.

Here is another general tool that I found for pairs that trend well. This is the idea that the 60 ADX can be used to ride a trend when it is above the 16 level. When the price on an up trend, comes down to the 50 ema; check to see if the ADX is more than 16. If it is, there is a good chance that the price will continue above the 50 ema at least 15 pips. Remember that the inner dotted envelope is 18 pips on the picture. There may be a drawdown, but you can add to your position if you have searched the backfill and this looks like a working strategy. On the picture you can see examples of this continuance strategy with the white lines labeled A,B,C. For the Red line D , you may notice that the ADX has fallen, and do not make the Trend Hook trade by entering long. Above the 28.40 (varies) ADX level is a warning that the trend is near exhaustion, so do not look for trend continuances. Here is a short list of the few currencies that trend well to get the idea and effectiveness for this strategy. NZD/USD , AUD/USD , NZD/JPY There are many others, I just encourage others to really look over their historical 5 minute charts before using this strategy. Tweak your levels to currency also. I have 2 nice ADX alerts that I have made, I will post them soon with setup advice. There is more details to using the ADX for true oscillation reversals coming also. Eventually I will release the large profile that I use that has all of these systems integrated, currencies custom tuned levels, and labeled for strategies used.

This is a very nice complex unreleased indicator that I built only for VT trader. I wish I had the time to duplicate it for MT. Only read this section if you are interested in VT trader for forex. It has been many months since I built it, and the instructions are on the brief side. It actually has room for 2 sets of envelopes. Also the ADX is not included on these charts yet or built into the alert. If you get this alert working it should allow you to just leave the program in the background scanning for trades. The alert lets you preset a filter for time (or bars passed) for price above or below the 50 ema. Then the alert sounds when price is in your preset range for the Trend Hook trade (with no ADX). There is attached an environment import for VT trader , it is the .vtnev file. Do not use this if you are already set up. If you are new to VT use this- it will overwrite everything, but you will be set up. Use the alert only .vttrs file to only try the alert . That is imported via the platform you should already have set up with my environment. To import go to the technical analysis panel; trading systems builder; import tab, browse for download. Once it is imported to your platform it can be applied to a single chart by right clicking on the chart; attached trading systems; add. Make sure it is the simplified #4 the previous versions are not the same. Then to set up the properties/parameters look for the option with the inner MA envelope (set alarm value) . This is the level above or below the pink line (50 moving average) that the alarm will go off. Then below that you find the alert inner margin shutoff value, this is the value that limits the zone that the alerts operate in. So for example the alerts may only work between 1 and 5 dollars away from the pink line, you adjust this. Near the very bottom of the parameters menu you find the bars back alert time section, this is you setting for how many hours you want to pass before your alerts are active. So each bar is worth 5 minutes. Three hours is 60 bars, i recommend about 70 bars. Close box with OK A few notes. You can only have one alert working on one chart , delete the old one if needed. Also click on the alert name to modify it. For the new alert, due to the programming language, the best way to set the alerts is in a range of 1 to 4 dollars off the pink line. For an up trend use the params enabled tab and select above inner alert and graphic (by checking) uncheck all others. What happens is that the alerts will not go off until 3 and a half hours have passed. When they do, you set the properties so you are not alerted until the price is about 5 dollars above the pink line. Your trade is below the pink line so you are alerted a bit earlier. This is somewhat different than the old alert system (if you use it make sure you use the #6 version of the envelopes alerts); with the old version for an up trend you would have used the lower inner margin settings for an up trend. I think that both the upper and lower alerts can be left on for this alert, and it will scan multiple charts. simplified_timed_alerts_4 alert only.zip timed VT alerts.zip

I can see that I need to correct my deviation numbers for the first post. I added an extra zero. Corrected would look like .18 deviation is approximately 18 pips. I need to give a name to the first strategy posted so I will refer to it as, “ Trend Hook”. Here is the first alert indicator I will refer to it as the MA envelope alert. It can be modified to suit many purposes, and many moving averages. I will say that it took many versions to get an alert that did not slow down the program as it repeated. Turn off the alert or volume to prevent the repeat from distracting you. When attached to a chart the default will make the alert settings display as a white envelope. Change your color settings to none to not have the display. The idea is to notice a lengthy up trend in progress. You want to be alerted when the price passes below the 50 ema around 6 pips to get ready to go long, enter trade when the price drops around 18 pips below the 50ema. You select TRUE for the “ alarm lower price below” option. Here are the parameter settings. The main menu tools –options-events allows for muting the alert sound The above and below alert settings activate the alerts for price passing outside the alert envelope. - LookbackCandles = 150; amount of historical candles computed, be safe and make it more than your moving average number - MAperiod = 50; - MAmethod = 1; this is the option to choose a SMA is zero EMA is 1 , smoothed MA is 2, linear weighted MA is 3 - AppliedPrice = 0; method of bar calculation, 0 is close of bar , median of bar is 4 - DeviationPercent = 0.06; Remember deviation notation .06 is approximately 6 pips, set this level to give you time to prepare for the trade. - AlertCandle = 0; this can be used to alert if for example third preceding candle crossed your alert level setting is then 2 - ChartAlert = true; - EmailSubject = ""; I have not tested the email capacity As with many of my coding projects, I may have improved on others work, or done my own modifications and have tested all of them. They may not be super refined, or properly copyrighted to identify my changes. Please use and share them freely. ##BEST ENVELOPES ALERT 3 time reduction.zip

The old thread has so many detailed ideas on it, many that are not related to the new developments that I will present. There will be plenty coming to consider, it has been a busy year programming and developing.

Hi, this is a refined version of a scalping reversal system that I had developed and posted previously. The post can be found here with many other alerts and indicators. http://www.traderslaboratory.com/forums/technical-analysis/7338-fresh-first-crossover-strategies.html I will present the basics again to assist in understanding the specifics. This has mostly been used to trade forex, but I know that I had adapted it for MSFT on one of the link posts. I will later present the confirmation and extended technical tools, along with alerts, indicators, and Metatrader profiles in coming posts. The Metatrader profiles are a plug and play presettings, just install the indicators in the proper folder of the program files ( experts-indicators). Most of my original work was done on VT trader. I also have some unreleased complex, but very nice alert indicators I made for VT. I stopped working with VT due to the inconsistent data feed. I have traded live and taught this system with profitable results. It is useful that you can review the back filled charts and see clearly the results. Due to this being part of a more complex system, I will decide about how many versions of the profiles, templates and indicators I will post. An additional note is that I prefer to use the USA (not UK but that may work also) version of forex.com Metatrader. If you are having problems with any of the profiles or specialty indicators use their free platform. They have some special attributes, like FXF attached to their symbols. Some of their platforms also have indices, stocks, and commodities to use this system with. It also offers many of the exotic crosses that I like to monitor. Also I trade on Oanda, for the reasonably tight spreads. This is a scalping system, so beware of the large spreads on some pairs especially in the low volume hours. The basics for the 5 minute scalp includes the 50 ema in magenta, and the 2 ema 50 envelopes (yellow). The inner envelope is set at the deviation of .018 (near 18 pips) for AUD or NZD crosses ; or .015 (15 pips ) for most all other crosses. The outer yellow envelope has the deviation of .036 for AUD or NZD crosses, .030 for most all other pairs. I have attached a 5 minute NZD/USD chart. There are a few ways to look for the trade set up. First is that if the price has been below the 50 ema magenta for 4 hours or more, when price first comes up to the inner envelope above the 50ema; trade short back to the 50 ema. This is shown in the down trends of “A” and “C” . As a confirmation that the downward trend is still powerful enough to make the short trade I introduce the ADX 60 (aka the Average Directional Movement indicator). If the yellow ADXR (main line- not the DMI ) is above the 12 level when the price crosses above the 50 ema, I consider it a valid set up. Of course the set up is basically the same for the upward trend. Price above the 50 ema for 4 hours, enter long when price falls to touch the inner lower envelope. The ADX rises with trend strength; it is not a normal oscillator indicator. Very important, make sure that the ADX level is still high from the major trend, not risen due to the reversal. As for many scalping systems, beware of market openings, major news, or post weekend trend continuances. Also be aware of powerful trend reversal formations like double bottoms, triangles, or tight channels. A late entry can be used. In an effort to find more trades, I show trend B. The price crosses the 50 ema many times, but the ADX level was still high when the price passed below the 50 ema previous to touching the lower inner envelope. As you can see, the long position trade back to the 50 ema was still profitable. I like to add positions to this trade as the price moves against me, as in trend B. Also it is good to leave some runner positions as in trend B, the price exceeded the 50 ema by 36 pips. I use the outer envelope as a general stop loss, but since I am incrementally adding positions, I am flexible with my stops, especially after a long trend, a fast bottoming reversal, and a high ADX level. I will later add other guides to assist with runners and exits at key levels. Daily pivots, 14 ema, 200ema, and a 650 ema. Other posts will follow with attachments and alerts, so watching the charts is minimized. There are also other confirmation tools and strategies that I will share. Questions and improvements are welcomed. I am also going to post a major thread on correlation trading with some advanced programming that I developed, so keep an eye out for that if that interests you.

VT trader and Quote Tracker have some nice tools for setting transparency levels (overlaying charts etc.) and paint bars. Then there is the subject of relative calculations for time frames. For instance the 250 ema on a 5 min chart, can resemble the 50 ema on the 60 minute chart (sorry I am travelling or I would post a list of actual corresponding pairs). So I can put bigger time frame awareness on my 5 minute chart with bigger ema numbers. This concept can be scaled into paint bar calculations, or even indicator calculations (by adding multiplyers to basic formula and resaving as a new modified indicator).

I walked away from TS years ago disgusted so my comments will be limited. One thing that I saw on e-signal that made me wonder.There would be on the one minute bar volume spikes, then they would reduced to look like normal volume shortly after. I wondered if they were covering the tracks of fund buying. The other thing that I researched at length is spike filters on the broker quote side, and on my platform. They filter out, far out market order fills. They can shape the stats of price OHLC. They can be adjusted on platforms like Quote tracker. Ninja Trader depends on your data feed provider. Backfill can look different than live fed charts. As I wrote else where I have seen large discrepencies for opening gap, closings on day charts. Anyhow good luck.

I keep Quote tracker on my computer to check the indices with the system I described above. I was just looking over the free backfill for MSFT and saw an example of what this system does so well. I took many of the indicator lines off and just left paintbars. The red line up shows where long term and short term indicators are showing the following. It is time for the market to lose momentum. This can either be a reversal coming, or 50% of a longer trend. In this case, near the white vertical line, it was an early warning that a 50% level had been reached. Notice how early it came in and how the market reacted, by doubling the level before making a major pullback. The green paintbar line up to the left shows a bottom nicely. The other red line up is not counted, because it was caused by a price gap. For advanced observation, the green lineup of July 08 is at the 50% level of the down trend that lasted for that year.

As studiers of market action, it is very useful to have a well defined terms. The reason for using an ambiguous term for an inquiry is to open the door for a variety of perspectives to be commented upon. Really what I am surveying is along the lines of, with the vast experience of the traders, what are the evidences that we have for unusual disruptions in market activity. Is there times to expect these disturbances? What are the mechanisms that trigger them? How have things changed? What are people doing to avoid or exploit these occurances? For new traders, what will the old school trades see you are jumping into. So far it has been a decent thread because people are coming up with shared experiences that give perspective on the dynamics and forces that move the market. There will be opinions of intent and justification for market interventions. People see things differently. That is why I like trading, people disagreeing make every order fill work. The more people disagree, the more liquid the market... The sharing of useful information is the focus.

Well said, I think the lines are blurry in the last bailout. Geitners dealings with AIG for funneling bailout funds and providing liquidity for some like Goldman were secretive. Not too hard to hide bulk orders for companies that do high frequency trading. It is rumored that threats to national security secrecy was invoked for these dealings and auditing Fed purchases. So yes, overt and covert funding could flow into the markets at key junctures. Normal market participants could get caught on the wrong side of the trade due to secrecy. Diverting funding to run around restrictions or publicity is not too unusual of a consideration. It is my understanding of how the Fed monetizing the debt, rebuying from large front purchasers after a week or so. I will ring the conspiracy bell one more time to be risky, but clear. I recall that there were large market shorting orders before 9-11. I do not think the origins were ever disclosed. If they were terrorists they would have been trumpeted as another reason to go to war. Really it is all a blurry subject. And more of an inquiry than a crusade for me. The thing that I have learned is that it is all printed money, many times removed from supply and demand. So give these markets room to swing wildly. Selectively abandon historical biases of what should be true market value. Actually for me I rely on the technicals more in normal trading. I am not sure if anyone really knows what the underlying assets are worth anymore. Hence at least people are familiar with technicals and revert to them. Market manipulation has been the theme of this time of intervention and selective choosing of market winners by the government.

I saw we have some similar threads linked lower on the thread page , some interesting posts there also. For the sake of my own research I looked up the following info about the plunge protection team. There are real processes and funds to intervene in market crisis. I just wonder if these days they use "preventative " intervention. Lets say if an obvious bearish head and shoulders formed on the S&P, maybe they would intervene at the neck line rather than at the bottom follow through. Perhaps guide a large channel breakout direction? Maybe just when they want to do some inside trading with fed funds? I mean Madeoff was a Nasdaq leader back in the day, it is not out of the question. washingtonpost.com: Plunge Protection Team My mother was the economist that produced the unemployment report for one of the US states. There is massive place for statistical misrepresentation. I think that governmental agencies may stretch the figures for GDP and unemployment numbers. This may not be evil, but it effects technicals, and can drive prices against them. This brings me to my final point. I agree that the media can be used to guide the markets. Living in Asia, near China, I suspect that their media and statistical numbers are more subject to political control. I post the following article for consideration, as China is a big player. Mish's Global Economic Trend Analysis: Nonperforming Loans in China Rise to "Trillions of Renminbi"

Nice work guys, so good to have code to fit the vision. Had an idea to compliment the system being developed. It involves Walter and Bemac's modified fantail volume weighted MA project. I found another application to use the volume sensitive indicator to confirm reversal areas. It involves the two outer fantail lines (shown as white and gray) BOTH exceeding the 14 pip 50ema envelope (yellow) . The red small arrows show when this condition is met, and I mainly pay attention to the first arrow that shows up, as a signal that there is conditions for reversal. These are 5 minute bars on the EUR/USD. Also notice how precise the timing was for the arrows, for the market to be ready to reverse. Also it work well with or without volume spikes. It does not work so well after a long channel breakout. I gives a few false signals now and then, but they do not usually occur with volume spikes. Below is where I posted more on this method and source code with audio alerts and possibly auto trade capacity. http://www.traderslaboratory.com/forums/24/walter-s-forex-trend-trades-2364-34.html Here is where I explained the complete system that integrates this tool. http://www.traderslaboratory.com/forums/f34/fresh-first-crossover-strategies-7338.html