These have been optimized for the cryptocurrency markets, but also seems to work really well in commodities, futures, and forex. A crossover with the closing is treated as a buy or sell signal. The 4 lines provided have different sensitivities and therefore can be treated in combination or separately. This seems to be highly effective in trending markets as a trend follower, and in a ranging market the signals can pretty reliably be reversed for profit. I made this code private because it is still a work in progress and I am interested in hearing people's thoughts and experiences with it for further developments. This is well on the way to becoming a holy grail!
Can you explain your strategy for using this? Thanks.
mcbw_
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Hi @kardia, forgive me for the (very) late reply but I just saw your comment at the top.
To help you and everyone reading, you can essentially use these lines in a similar way as moving averages and have much better results. Let me explain more.
I have designed these lines to only have crossovers with price when price is starting to change direction, and should not have crossovers otherwise. This means that these crossovers are typically high probability and low whiplash. If price is stuck in a range then these lines try to stop moving so all your trades may be at break-even, helping prevent whiplash. There are 5 lines that all behave a little differently and have different time horizons. I designed it to work on all timeframes and all instruments and often use the green, pink, and red lines in my trading. Here is a break down on how I use these three lines.
The light green line - is designed to help you with staying in trades that are going in your direction very quickly. When you're in a breakout trade and what to stay in it till the end without sacrificing any profits. This is good on all timeframes whether it is a daily chart breakout in the commodity markets or a 1 min chart breakouts in the cryptocurrency markets.
The pink line - if you blindly use this line as a crossover system the backtests of the pink line are actually the best performers in swing trading the forex markets of all the lines in this indicator. This helps me catch mid-sized moves and allows the trades to breathe a little bit without sacrificing too much profits. Normally I use this as a "filter" to help build confluence for momentum moves. For example, if I am using the QQE or Zero-lag MACD crossover signals as entries to trades I will only take the long trades when price is above the pink line, or short if price is under the pink.
The red line - this is the most powerful line in this indicator to trade in my opinion and the opinion of my most profitable colleagues and students. When price crosses this line there is a very high probability that price will continue to stay on that side and continue in that direction. I have seen this line used very well in the cryptocurrency markets, forex markets, and option trading stock markets. My personal favorite for this line is when I see a nice chart pattern and want to act on it but want more confluence. For example, if there is a really nice head and shoulders pattern forming and the right shoulder is just crossing under the red line I will absolutely catch a great short there.
The teal line and purple line - I know many people that do but cannot speak to these from regular experience.
Version 3 is already out, you can find it on my page!
When does version 4 come out?
I have been working very hard on version 4 with all sorts of new advanced technology and it should be coming out by the end of 2020 or start of 2021 and will have a very small annual fee.
Let me know if you have any more questions, best regards.
Gunslinger2005
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@mcbw_, The light green line - is designed to help you with staying in trades that are going in your direction very quickly. When you're in a breakout trade and what to stay in it till the end without sacrificing any profits. This is good on all timeframes whether it is a daily chart breakout in the commodity markets or a 1 min chart breakouts in the cryptocurrency markets. <<<< you gonna say how it helps?
luizcpg
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I would like to have access to your indicator.
Thanks
-Luiz
wpatte15
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Umm, not to pop your bubble or anything, but those are moving averages...
mcbw_
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@wpatte15, Hey, nice job for noticing the similarities. Some parameters of this script are rooted in moving averages. However, these lines provide remarkably better signals than moving averages!
wizeguy88883
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@wpatte15, What are the four moving averages used in this indicator? There is a longer term pair and a short term pair. I like the results of using the faster long term line with the slower moving short term line using the 4 hour timeframe.
mcbw_
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Feel free to check out the updated (better) version of this idea here: