Eric Johnson

Hi, I am new to the forum, but have been working on indicator combinations and trade testing them for years now. I began this project using bollanger band compression/squeezes and trading the price range breakouts that followed. Then I started using John Carters trade the markets squeeze system. I began adding indicators to give more technical perspective on squeeze conditions that would lead to price breakouts on different time frames and paint barring them. I will share a few that I have been working with, in hopes that others have some ideas. First is the trade the markets squeeze, bollanger 20,2 and keltner 20,2 or 1.5. When the BB enters the keltner channel, a signal is generated. I use Quotetracker, so you know my indicator source. Next I added a choppiness index 14. It paintbars over 65. Then I have a bollanger bandwith lower indicator set 10,0.5 . It paintbars at less than .005 Of course I have an ADX 14,14 painbarring at less than 15. Finally I have a new toy that was interesting to me. It acts like a short term trigger for change. It is a market facilitation index set to 5. It is spikey and has 2 operating ranges so the paintbarring is a bit tricky. It is as follows, main less than .0001 set color, and main less than .0007 set (new)color and stop. It can be viewed in both ranges on a multi year MSFT chart. I am observing the effect of the down spikes only. What would these paintbars look like in useful terms? They occur at times when the market goes into resting. They show up at different intervals, often in combination. I found breakouts particularly powerful when combined with a 50 and 21 EMA crossover. The goal is to observe powerful combinations of paint bars, usually hiding the indicator. At this stage these are tools for creative development. For a trading system you can check out http://www.tradethemarkets.com or I posted a some details on the BB squeeze indicator thread. Market perspective is profitable.

Hi, I have duplicted most of the TTM squeeze for Quotetracker. I will do my best to give a brief overview. The squeeze is generated as you show, using BB 20,2 and keltner 20,1.5 or 2 . They seem to make adjustments for what market they are trading (forex, stocks, etc.). The entry is after a squeeze, and there is a 21 and 8 EMA crossover. Then confirmed by 2 TTM colored bars confirming direction. They are generated by a 6 and 8 EMA crossover. Then they wait for the pullback to the 8 EMA to enter. In volitile markets they are using box channel breakout stops after a squeeze. Also there is a momentum indicator/oscillator 5,22 . It is used to confirm entry direction by color of bars. It is also used to predict breakout direction. Finally it can signal early exit if momentum reverses. For stops and profit taking watch some of their videos. They scale out and use 2 opposing colored TTM bars for exit. You will see they use scalper alerts, I use small keltner channel price breakouts and other things. They have a video showing how they generate theirs as confirming trend highs and lows. Their value indicator is a very fast moving oscillator. I am using a Bressert DSS , but think this is uncommon. This system has a few things you need to have the details straight to use it well. I have watched every one of their videos for the last 4 months, I like what I see. For charts and info see http://www.tradethemarkets.com for new people to the idea.

I wonder if those TTM paint bars are the same as John Carters work? If they are then I was able to assemble most of the squeeze system for quote tracker. Those TTM color bars are based on 6 and 8 EMA crossovers. Carter displays the 8 and 21 ema on chart, and use them to confirm an entry after a squeeze. They like to enter after a pullback to the 8 EMA. All of the previous strategy follows a bollanger/ keltner band squeeze. I like the system very much. It looks decent on QT, I have the parameters if anyone wants them. I will wander a bit, if anyone wants to talk about indicators that generate market "squeeze" conditions that can be paintbarred.

Really enjoy the creativity and expertise of these posts. I am not a progammer, but have used combined multiple indicators to show useful information. It would be useful to build a system that isolates a specific bar as piviotal to a predictable follow through. For me the idea of identifyable "footprints" or markers that can only be seen with proper tools is where my development has gotten interesting. I am not sure it is so easilly uncovered in the micro time frames, as there is much "noise" there. I have found indicator combinations that show a marker on a new up trend 50% level, that can be used to extrapolate tops (even years ahead of time). It does isolate a specific bar that reaches this price level. I am not sure if it is a result of fund buying, or a special pattern not observed without the indicators. When I saw it consistently, it made me think of a marker for the elite with the tools to see and use. This is a bit unfounded, because it works on minute bars also. My attempted conribution is that on the micro bid /ask level, I am not sure there is much transparency into true intent. I think on slightly longer time frames there is a balancing, and maybe a clearer insight. Perhaps using super fast oscillator combinations would be another way to give value to bars, then looking for anomilies using paintbars etc. Anyhow, glad every one has their specialty and it fuels creativity.

As I read articles trying to isolate the working definitions; I find the idea that a tick is just a single lot transaction, and can vary in share size. Also I find the idea that a tick has to do with a change in price, and volume is measured as how many shares were traded at that price. It is amazing for me to consider that a single (share) trader of the DIA could be counted as one tick, but I am learning. Perhaps this is the source of the confusion. The link below gives the business definition of a tick as the change in price. Perhaps it is not the same for charting. http://www.allbusiness.com/glossaries/tick/4942617-1.html My pracitical interest is in the difference in quote feed charts. There can be major differences in the bars, or highs or lows. Is it junk data, way out fills and spikes, or different parameters for what makes a valid tick? Even backfill historical data can look different then when it was first given live. Even for drawing fibonacci retracements, I need to know where a good top and bottom are. Anyhow glad for the discussion, ideas, and hope others join.

This is a most interesting subject. I did some research when investigating tick spike filters. Investigating what parameters do the exchanges use to filter valid trade range. For example what was the high and low of the day, if there was a way out market order filled? This effects my technicals. Here is a link on the subject of what is a tick and how is volume measured. It also covers constant volume charts. http://www.tradingmarkets.com/.site/eminis/how_to/articles/-75249.cfm Here is the essence of my point, pasted from the article. Tick charts" form price bars by measurement of price changes rather than size of trades executed. In other words, if the ER2 price moves from 700.00 to 700.10 to 700.20 to 700.10, that would be four ticks in formation of a chart bar. If the tick chart setting is "500" per bar, it would obviously take some 500 price changes to complete each bar on that specific chart. Within that series of five hundred price changes would be an unknown quantity of volume. Some tick chart bars would have more or fewer actual contracts / shares represented than other similar bars elsewhere on the chart.

I believe that each tick represents a price. At a given tick there can be any amount of trades at that price. When sales move to a new price tick, then volume or trades begin counting again. Example 512 tick chart volume will show the sum of 512 individual price volumes. For a one minute chart it is just the total of the trades at any price in that time period. At given intervals or light trading, there should be times when the volume is not exactly the same on the different type bars. For example if the price of trading stayed at one price for 5 minutes, and volume was light; you would only get one tick bar, but 5 one minute bars. The one tick may have 50 for volume and the minute bars should divide up the 50 according to the time traded.