Is Your Trail Stop Smart Enough?

Let’s evaluate the 2 trades that transpired today.

Trail

4% gains for the day, not bad, right?

The two routines, 95 End Line Trader and 94 Green River Trader picked the best spots.

What was missing? The free trade.

Let me explain.

Say, I had widened my idea from one specific routine (93 Weight Breaker) to all the trades – namely to adjust the stop loss to 1 pips positive upon exceeding 8 pips in gains  to cover the commission…

I already have the following trail stop piece, that puts a trail stop 1/2 fluctuation size back from the current 30-minute high/low upon exceeding 20 pips in profits…


for(i=OrdersTotal()-1; i>=0 ; i–){
if(OrderSelect(i,SELECT_BY_POS,MODE_TRADES)==false)
{
Print(“Access to orders list failed with error (“,GetLastError(),”)”); break;
}

if (OrderType() == OP_BUY && OrderMagicNumber()!=exempt_magic_number )
if (iHigh(symbol,30,0)-200*Point > OrderOpenPrice() && (iHigh(symbol,30,0)-FSize/2*10*Point > OrderStopLoss() || OrderStopLoss()==0) )
{
Print(“bUY sTOP lOSS ATTEMPT “, OrderTicket());
if (!OrderModify(OrderTicket(), OrderOpenPrice(), NormalizeDouble(iHigh(symbol,30,0)-FSize/2*10*Point,6), OrderTakeProfit(), Red))
Print(“Error setting Buy trailing stop: “, GetLastError());
}
if (OrderType() == OP_SELL && OrderMagicNumber()!=exempt_magic_number)
if (iLow(symbol,30,0)+200*Point < OrderOpenPrice() && (iLow(symbol,30,0)+FSize/2*10*Point < OrderStopLoss() || OrderStopLoss()==0) )
{
Print(“sELL sTOP lOSS ATTEMPT “, OrderTicket());
if (!OrderModify(OrderTicket(), OrderOpenPrice(), NormalizeDouble(iLow(symbol,30,0)+FSize/2*10*Point,6), OrderTakeProfit(), Red))
Print(“Error setting Sell trailing stop: “, GetLastError());
}}


 

What if I added the free trade…?

if (OrderType() == OP_BUY)
if (iHigh(symbol,30,0)-FSize/4*10*Point > OrderOpenPrice() && (iHigh(symbol,30,0)-FSize/4*10*Point> OrderStopLoss() || OrderStopLoss()==0) )
{
Print(“bUY sTOP lOSS ATTEMPT “, OrderTicket());
if (!OrderModify(OrderTicket(), OrderOpenPrice(), NormalizeDouble(OrderOpenPrice()+10*Point,6), OrderTakeProfit(), Red))
Print(“Error setting Buy trailing stop: “, GetLastError());
}
if (OrderType() == OP_SELL)
if (iLow(symbol,30,0)+FSize/4*10*Point < OrderOpenPrice() && (iLow(symbol,30,0)+FSize/4*10*Point < OrderStopLoss() || OrderStopLoss()==0) )
{
Print(“sELL sTOP lOSS ATTEMPT “, OrderTicket());
if (!OrderModify(OrderTicket(), OrderOpenPrice(), NormalizeDouble(OrderOpenPrice()-10*Point,6), OrderTakeProfit(), Red))
Print(“Error setting Sell trailing stop: “, GetLastError());
}

 

Trade 1:

Trail01

With the Free Trade add on, and with making this routine exempt from the Fluctuation Stop Loss Fitter, the trade would had gone to its target making 38.4 pips in gains instead of 11.4 pips, yielding $952 instead of $282. The maximum heat on this trade was 2.2 pips because of the otherwise perfect entry.

Trail02

Now, for the second trade, which I closed prematurely, the alternate route could had been the following: once the free trade is running there is no danger of losing on the trade. Two possible outcomes: when changing nothing, the 1/2 fluctuation trail stop could had closed the trade at 1.1676, or 16 pips away from the high, for 25 pips profits instead of 3.5 pips, which would had brought the profits from 185.15 to 1,322.50 – or route 2, on top of the free trade, better target choice – the Guard rail, fluctuation Maximum away would had brought the total move length to 39.9 pips, or the profits to 2,110.71.

Needless to say, this auto trading routine had worked perfectly also in terms of getting the entry right, which was 1 pip below the Green River high. The heat was less than 1.5 pips.

$3,062.71 was the potential gain for the 2 trades without increasing their initial sizes, which comes out to be about 26% gains for the day.

Trail03

End Line Theory

the market prints an end line (white ones)

now you have a support and a resistance box

you play whichever gets touched first for an entry

EUR1181

for examplar…

while (j2<500 ){
j=j2+FMinimumSampleSize;
if (iFractals(Symbol(),0,MODE_LOWER,j2))
while (j<j2+22){
if (iFractals(Symbol(),0,MODE_LOWER,j2) && RSI2[j2]<8 && stoch[j2]<30 && stoch[j]>44 && High[j]-Low[j2]<FMax*3*10*Point && High[j]-Low[j2]>FMax*10*Point/divider && RSI[i2]>15) break;
j=j+1;
}
if (j2<j+12 && iFractals(Symbol(),0,MODE_LOWER,j2) && RSI2[j2]<8 && stoch[j2]<30 && stoch[j]>44 && High[j]-Low[j2]<FMax*3*10*Point && High[j]-Low[j2]>FMax*10*Point/divider && RSI[i2]>15) break;

j2++;}
if (iFractals(Symbol(),0,MODE_LOWER,j2) && RSI2[j2]<8 && stoch[j2]<30 && stoch[j]>44 && High[j]-Low[j2]<FMax*3*10*Point && High[j]-Low[j2]>FMax*10*Point/divider && RSI[i2]>15) {LowFractalTime_2=iTime(NULL, 0,j2-1); LowFractalTime_1=iTime(NULL, 0,j-1); direction[j2]=1; }


the end line support and resistance boxes are now part of the God Awesome Indicator

that is due to be released by the last day of September, 2018


could this be a basis for an automated trading routine?

anything could be, but writing this would be a breeze

Using the 88-Luftballons SA

The market turns in one of 2 ways:

  1. By making a Head and a Shoulder
  2. In a rising/falling wedge

The 88 Luftballons MT4 indicator can help you find the first condition. (The God Awesome indicator can help you with the second one, that involves plotting terminal waves.)

The SA in the title stands for Sync and A-Sync.

I call a Low/High Synchronized if it is both short and medium term oversold/overbought.

The Sync Lows/Highs have a visual representation of an 8-Ball.

The 8-balls are tough cookies, they are hard to break, and they could all be Heads potentially.

To turn them into actual heads, you need an A-Sync reading following in close behind (11-14 samples are used for the 30 minutes charts).

The A-Sync reading has two visual representations. One is the black arrow that is plotted at the weight (HL2) value of the 30-minute bar. The other is the red/green text starting with “RS” (Right Shoulder), repeating the HL2 reading with numbers.

88_4

If you look at the picture above, the first thing you would spot – most likely are the white-out areas. These go from the HL2 value to the recent high/low, and they are 8 periods wide – to make them as visible as possible. They mean to get your attention to the areas where there was a divergence made by buying/selling.

There is one more thing that you can figure easily: where the stops were placed.

88_5

88_6

Both on the upside and on the downside the stops were within 10 pips distance from the previous high/low. This may be a useful information about the current market players.

As for the lines, the green line shows the limit of the push achieved by the purchase at the right shoulder – with 2 hours time limit given.

The red-orange line of course is the 2-hour achievement of the right shoulder provider bears.

The idea of the colors is that the red line is a potential sell, the green line is a potential buy.

The last image shows how that 2-hour print becomes an active sell further down the road. You can also see that the 8-Ball lines / Sync values can be optionally plotted in a form of a mesh, and the actual numbers are an additional option.

88_7

If you are interested in purchasing this or any other of my indicators or an automated trading routine, feel free to contact me: macdulio@yahoo.com

Bonus image:

The terminal wave, as Mr. God Awesome can find it…

EUR1158

Full Color Jacket: 88 Luftballons SA + God Awesome V1.1

EUR1159

How To Determine the Fluctuation Size?

1. Open the chart of the instrument you want to be gauging for.

2. Switch to 30 Minutes

3. Plot a Kijun-sen by adding Ichimoku indicator to the chart

DOW

(you can flag None for all the other items, so they don’t get displayed)

4. Find periods where the Kijun-sen runs flat

5. Click on the target marker (crosshair) icon

6. Start measuring where the Kijun-sen has been flat for 3+ periods and price seems to be finding resistance.

DOW2

DOW3

Based on the above readings, 1/2 of the fluctuation zone is somewhere between 42.00 and 53.00. With a few more measurements, I would conclude the FSize (Fluctuation Zone Size) to be 51.00×2= 100.2

Meet Mr. Morten Market

Atlas3

Yes, the market is an Atlas ball. If you did not know this, from now you would.

It is currently sitting idle – as per our stock picture.

Two forces shall try to press on it in the opposite directions in a minute.

Imagine two hands. One gives a push from one direction. The ball wobbles a bit and settles back down somewhere in its nest/pit.

The nest is approximately between the chartreuse lines – they represent the high points, the edges of the pit. Decision time, was the fore strong enough to push it over the edge? If so, the ball rolls.

I never had much faith in moving averages, I was not looking for moving averages. This is why I managed to find the right one.

The right one of course is the green river, that has been with me for a while. It is the 15-minute lema, or if you are on 30 minutes – like I am, it is the 414 sample high and low EMA.

The chartreuse is the edge of the pit. It is 1x Fluctuation Maximum away from the banks of the green river.

The fluctuation is instrument dependent and currently I figure it as 6/5 of  the Fluctuation Zone.

The Fluctuation Zone is a constant and volatility has no effect on it.

You get to change this value for your instrument in the latest LEMA 30.

EUR1152

_LEMA_30

My current thinking of the outer zones: bulls are strong in Zone 1; as soon as price is pushed over the edge, they have 26x 30 minutes of free play time to roll with it.

In Zone 2, if they manage to push the ball a bit outside of Zone 1, there is some extended time play to be had, but the ground is flat, which does not help the pushing force; bulls would have 7x 30 minutes to force the ball further without the slope.

As you can figure from all of the above, bears would have a hard time at the cusp of the pit to push it back into the pit part. The second picture shows such attempt that failed very recently.

For additional information, I placed the Purple Haze 3x Fluctuation Max distance from the Green River and the Icing 5x Fluctuation Max away.

How does it feel be in picture finally?

EUR1153

My God Awesome Indicator was updated accordingly.

The Shaping of Mr. Awesome

So, I need to make up my mind on what to include in the God Awesome Indicator.

The whole thing would start with marking up the terminal waves and using them for tone color changes.

EUR1134

I would have some options to change the sample size for the terminal wave finder part, an option to waive the small size restriction, to rule out an additional stochastic filter.

There would be optional entries and exits plotted.

Entries are the strike outs with Buy and Sell labels.

Exit conditions would be the arrows and of course, the color changes themselves.

I also would like to turn the very same indicator to an all you can diverge buffet.

EUR1135

There are stochastic and RSI divergences plotted with labels being optional again.

The green and white window looking squares are meant to high light the sharp turns – based on RSI, as I call them, sharpies.

 

After determining the most crucial parameter, which is the size of the fluctuation zone, projected calculations would become possible using a level of overbought/oversold swings for a good visual read on where the targets might be.

EUR1136

Those are the fine lines that end up in blue and red boxes. Currently I am not planning to include this feature in Mr. God Awesome.

About the labels:

Even if the fine line boxes would not be present, the first line would give an approximate target, L/T stands for long target.

The direction logic is a lengthy subject. I derive it from the last walk into the trees/snow barrier.

I think of the market as a snow plow and the RSI as a measure of velocity. I would discuss this in my upcoming book.

The 24U and 24D readings are the largest market swing lengths in to the upside and the downside in the last 24 hours (or so).

“U:” is a projected distance based on the last qualifying up-swing.

“D:” – you can guess this one.

“SAR” is a 4H PSAR, but it guesses the next value ahead.

“D.P.” is the location of the Deep Pink,  which is a long term EMA.

You by now understand the brown round things to be the forest / tree lines, and the big white chunk to be the snow barrier.

The dual colored lines are are the pacing based on the size of Fluctuation.

The rest of the lines would not make it into Mr. Awesome I think.

I intend to go on sale some time in September.

As I develop Mr. Awesome, I am also constructing a couple of auto-trading routines; one would open trades based on the buy / sell plots, another would be cropping trades based on the blue arrows and the shading change (terminal wave set).

EUR1137

You think you could use this? Oh, I bet you could!

And here is how the Green River, Mr. Maroon and the Guard Rails line up…

EUR1138

Terminal Waves by Macdulio

– If only there was a way of knowing when and where the market turns…

– You mean you want to plot the terminal waves?! I can do that!

EUR1114

One day, besides the curtain, this can be all yours!

Come back and get one of my “God Awesome Indicator”… when it would be pronounced ready!

EUR1115

At what cost? We’ll think of something. This is already secret in possession territory…

EUR1116

EUR1117

EUR1119

EUR1120