Interesting things the group might like to try.
I have been doing a couple of tests finding what is best indicator to use as a trigger point for a buy or sell signal. The SA40 and all indecies all lack the volume aspect of the trade, even if you have some kind of volume measurement based on what you are trading this information is incorrect as it is the underlying shares that actuality determines the volume. I am working on an indicator that allows for a reference of all the underlying shares volumes to be brought into a calculation to help determine if you stay in a trade or get out. This is not working right just yet but I have found one thing that does work very well and adds more than 20 percent of the available points in any given day to be traded.
This is all based on the use of a 2 minute chart.
First you need something of a centre line and that can be an 8 period simple moving average. so a candle above the line is up trend and below is down trend.
Then you need a reference that will track that and show the high and low side. for this a simple moving average applied to the high of each candle seems to work nicely. So simple moving average 6 periods, applied to the high of each candle. So your normal buy and sell points would come only at the point that crosses the 8 moving average. doing it this way you loose 20 percent of the trade waiting for a confirmation crossing of the lines. Any entry is risky due to the unknown.
To correct this and improve the hit rate I have added a third moving average that improves the entry level by 20 percent depending on the length of the trade, this works especially well for days when nothing is happening and the trades are especial short in duration. So the last MA needs to be set as an exponential moving average of 11 periods, applied to the close of each candle, and the method of smoothing MUST be "End Point"
With this entry point for a long would be at the point that the 11 period line crosses the 8 period line, confirmation of the trade being a good one comes when the 6 period line crosses the 11 period line, the exit point is at the crossing of the 11 over the 6 at the top of the trade.
I traded this on Friday and made 58 extra points over the trades in the day than I would have if I had just used the normal entries. It also allowed for failed trade to be exited much earlier and costing much less.
G
only traded short no longs.
The IG account just has blood on the floor, if the market goes back up tomorrow I should recover nicely with the longs I have been adding every 100 points on the way down, not the best strategy but we will see.
G
