Free Chapter Tuesday-- Gann Simplified
This week’s free chapter is from Gann Simplified by Cliff Droke. Be sure to check back next Tuesday!
Gann’s Chart-Reading Technique
Gann was a big believer in using financial charts to judge the soundness of common stocks and commodities. “All of the information that affects the future price of [stocks and commodities] is contained in its fluctuations and you need nothing more than its record of prices,” he used to say. Most of his work was based around various ways of interpreting the chart, and without it, his forecasting success would have been largely impossible.
Friday, May 07, 2010
Thursday, May 06, 2010
Momentum EA Puts Up Shocking Numbers
Submitted by Jason Fielder on April 1, 2010 – 9:05 pmNo Comment.
Every once in a while, I have what I’d like to call a “moment of clarity”. Recently, I was thinking about how to use what MetaTrader has already given us (in the way of indicators) to build a complete system with. As I was thinking about what indicators to put together to logistically create a new system, I thought to myself — “why not make a system simply with two of the SAME indicator?”. Thus, the “Momentum Cross” system was born. As it was being coded and tested by my system developers and myself, I didn’t know what to expect. The results shocked me, and I felt like I just HAD to share it with all of you.
As some of the other trading labs, the rules to this system are relatively simple as well. I only use one indicator, but I use two of them (with different settings):
#1 - Momentum indicator with the setting of “1″ on Close price
#2 – Momentum indicator with the setting of “8″ on Close price
NOTE: For the long and short examples below, when I say “#1 momentum indicator” and “#2 momentum indicator”, look at the above #1 and #2 for reference.
For a long: The #1 momentum indicator is currently GREATER than the #2 momentum indicator. The previous candle must have the #1 momentum indicator SMALLER than the #2 momentum indicator. So, as soon as they cross on the current candle, if the current candle is a LONG candle (current close is above current open), then go long as soon as the 2 indicators cross.
For a short: The exact same entry rules for a long (#1 momentum indicator going above #2 momentum indicator on THIS candle, etc.). Except, if the current candle is a SHORT candle (current close is below current open), then go short as soon as the 2 indicators cross.
It seems odd and awkward to have 2 different momentum indicators, and having to compare the values on each tick. So, to make things easier, we took the liberty of the “weekly indicator” to build you a FXI-MomentumCross indicator!! This will allow you to have a MACD-style indicator that is simply the 2 momentum indicators on top of one another. Check the weekly indicator for this week if you would like this indicator (optional to run this system, not required).
When I tested this, I tested 2 different variables:
1) Left the “fast” Momentum indicator at 1, but tested the “slow” Momentum indicator (everything from 3 to 10). The “8″ setting was consistently best, so ALL the tests were run with a “1″ in the fast momentum setting, and a “8″ in the slow momentum setting.
2) Tested the stop loss and take profit, at a 1 to 1. On the hour, tested everything from 20 to 60. On the 4H, tested everything from 50 to 150. And on Daily, everything from 50 to 300.
We tested on both a short term timeframe (everything from December 2009 to present date), and a long term timeframe (everything from January 2007 to December 2009). Check the results in the video below to see me walk through how this system performed, and what to look for.
First, the EA link. But before that…
VERY IMPORTANT: The Expert Advisor That Is Given To You In This Trading Labs Is Provided AS IS And For EDUCATIONAL PURPOSES ONLY. If you decide to trade this EA on your account and it blows it up to smitherines, we can NOT be held liable. It is a tool, and all tools in this world can be considered dangerous. Just be careful, and if any losses at all occur on your account, remember…you have been warned. It is NOT our fault if either this system doesn’t perform, or the EA doesn’t perform as expected. – With that being said here you go!
1) Click HERE To Download This Expert Advisor. Save it somewhere easy to find, such as your desktop.
2) Move the Expert Advisor into your “MetaTrader 4 Directory\experts” folder.
3) Re-start your MetaTrader 4 if it is already running.
4) You may now use the Expert Advisor for your testing or trading purposes. You should be able to see it in the “Navigator Window” now underneath the “Expert Advisors” tree.
Here is a listing of the variables (as well as their default values):
– Momentum Settings –
MomentumSlow = 1 <– Slow Momentum Value MomentumFast = 8 <– Slow Momentum Value MomPriceFast = 0 <– Applied Price — 0=Close;1=Open;2=High;3=Low;4=Median;5=Typical;6=Weighted MomPriceSlow = 0 <– Applied Price — 0=Close;1=Open;2=High;3=Low;4=Median;5=Typical;6=Weighted – Trading Options – StopLoss = 25 <– Trade Stop Loss TakeProfit = 25 <– Trade Take Profit LotSize = 0.1 <– Lot Size Per Trade MagicNumber = 123456 <– Magic Number (make this number unique) – EA Options – ShowAlerts = true <– Show audio/visual alerts on each new order ShowSystemStats = true <– Show total system profit (over history) on the chart
Wednesday, May 05, 2010
New Trade - WDC
WDCWestern Digital Corp.
Buy to Open300@$42.79
WDC 2010 OCT 46.00 PUT
Buy to Open3@$6.70
Bought shares of WDC$42.79
BTO Oct 2010 46 Put+$6.70
Total amount AT RISK$3.49or 7.1%