This is just me playing with different indicators, then playing around with their settings. My idea was to hit highs and lows. So First I wanted to find an indicator to map out those. I decided on Moving Average to do this. I set the first one on 1 length, source low and 0 offset. I wanted it to connect the lowest pivot points to be able to visualize the pattern better. I changed the color to something I would remember this is the low. I then created another moving average set at 1, high, 0. To visualize the pattern of the highs on each bar. I now can see the best high and low points that I would have liked to get in and out at.
What I wanted next was some sort of indicator line that would map throughout the chart that would go though those points that I wanted. I played with a few different indicators, I decided I mostly wanted one that measures volatility, so bollinger bands was what I ended up with. I played with the settings so the BB line runs through most of the MA points that I wanted. I played with the numbers a while till I got something I was happy with. My final settings were the length 10, source low, stddev 1.3, offset 0.
Again, I played with these numbers till I was happy enough. I found that 10 gave similar results as 12, but crossed some lines I wanted that 12 did not. I did the same for stddev. 1, I found moved the line more up than I wanted and 2 moved the line too far downward, so I played with decimals. I looked at the 3 lines and decided I only wanted to use the LOWER line, so I turned everything else off on this indicator. I changed the color of this line to green to mark it as buy.
I then created another bollinger band indicator and set this one to 10, source high, 1.3, offset 0. This one is to mark the upper pivot points, so I used UPPER line and turned all others off. I changed the color to this one to red to mark it as sell.
I then took a look and the patterns of the lines to figure when alerts should be set. The pattern I saw was when the green line crossed down on the lower MA, this was the best time to buy. When the red line crosses up on the upper MA, this was the best time to sell. So the settings for the alerts I have set are BB(low), lower, crossing down, MA (low), once per bar. And this will be the buy alert. The sell alert is set at BB(high), higher, crossing up, MA(high), once per bar.
I have not back tested this idea as I do not know how to do that. If anyone knows how to do that, I would love to see the results. I did visually go back a few weeks and see when it would buy and sell. I did not see and spots where it sold at a loss and most of the % changes I saw between the buy and sell were between 2-6% with trades ranging between a few hours to a few days. I have linked the alerts to a paper trading bot and I plan to revisit it in a week or two to see how well this idea works. It would be a good idea to try this in different types of markets as well. So far I have only really paid any attention to the 4 hr chart, buy I would like to test other charts as well.
I did try to do some research, but I could not find anyone else using the indicators in this way. Maybe I just don't know what to search for, or maybe people found this and found it doesn't really work. If anyone has seen this idea before let me know if it has an official name. Also if you try it and come up with other settings or an other kind of indicator that works better, let me know. Please let me know what you think.
What I wanted next was some sort of indicator line that would map throughout the chart that would go though those points that I wanted. I played with a few different indicators, I decided I mostly wanted one that measures volatility, so bollinger bands was what I ended up with. I played with the settings so the BB line runs through most of the MA points that I wanted. I played with the numbers a while till I got something I was happy with. My final settings were the length 10, source low, stddev 1.3, offset 0.
Again, I played with these numbers till I was happy enough. I found that 10 gave similar results as 12, but crossed some lines I wanted that 12 did not. I did the same for stddev. 1, I found moved the line more up than I wanted and 2 moved the line too far downward, so I played with decimals. I looked at the 3 lines and decided I only wanted to use the LOWER line, so I turned everything else off on this indicator. I changed the color of this line to green to mark it as buy.
I then created another bollinger band indicator and set this one to 10, source high, 1.3, offset 0. This one is to mark the upper pivot points, so I used UPPER line and turned all others off. I changed the color to this one to red to mark it as sell.
I then took a look and the patterns of the lines to figure when alerts should be set. The pattern I saw was when the green line crossed down on the lower MA, this was the best time to buy. When the red line crosses up on the upper MA, this was the best time to sell. So the settings for the alerts I have set are BB(low), lower, crossing down, MA (low), once per bar. And this will be the buy alert. The sell alert is set at BB(high), higher, crossing up, MA(high), once per bar.
I have not back tested this idea as I do not know how to do that. If anyone knows how to do that, I would love to see the results. I did visually go back a few weeks and see when it would buy and sell. I did not see and spots where it sold at a loss and most of the % changes I saw between the buy and sell were between 2-6% with trades ranging between a few hours to a few days. I have linked the alerts to a paper trading bot and I plan to revisit it in a week or two to see how well this idea works. It would be a good idea to try this in different types of markets as well. So far I have only really paid any attention to the 4 hr chart, buy I would like to test other charts as well.
I did try to do some research, but I could not find anyone else using the indicators in this way. Maybe I just don't know what to search for, or maybe people found this and found it doesn't really work. If anyone has seen this idea before let me know if it has an official name. Also if you try it and come up with other settings or an other kind of indicator that works better, let me know. Please let me know what you think.