StableFX
If you’d like to follow along with the e-book version of the blog, click on the play button in the audio player below (at the bottom of the page).
Steady Now
We’re going with current indicators in our search, as it would appear that many new ideas, and even old ideas with a new twist, seem to be finding their way into our path of discovery. While this week’s indicator may seem a little daunting at first glance, we’ll break it down into something more simple, because, that’s what we do here. Good plan, right?
Short List
This indicator came up on a short list of research possibilities, which is kind of nice, as we can get mired down with endless opportunities as we seek viable candidates from a variety of sources. There are so many fascinating indicators which are continually added to our list. We’re very fortunate to have so many tools at our discretion.
Don’t Stop Contributing
Keep on sending us your indicator suggestions. Over the past couple of days we’ve received a few good ideas and one that was actually reviewed by VP awhile back when the original NNFX series was still in production. We may do one of our “bonus” blogs and videos based on the fact is that this was requested a few times. We won’t let the cat out of the bag just yet, but keep watching for it. In the meantime, send those cherished morsels to stonhillindicator@gmail.com.
Reel Vid
Per our protocol, we’re going to record the necessary data stream; however, we’ll have made the necessary tweaks to the indicator which coincide with what we’re showing you in the blog. Makes sense, right? After all, we’re trying to remove confusion, chaos, and disorder from trading. Take a look, come back to the blog and make sure you’re subscribed to the Stonehill Forex YouTube channel, so you don’t miss new material.
Balanced and Composed
Just the title of this indicator should evoke images of calm, ease, and smooth sailing. When we started digging into it, we found that it could be made simpler by applying a few of our usually tweaks, but that’s just us. There is actually more than one way to use the StableFX indicator. By the way, this indicator was originally an MT5 repainting entity, which was subsequently converted to an MT4 indicator, and the repainting coded out, hence the mention of “nrp” in the file name.
Derivation and Deviation
This appealing little tool is a derivation of the CCI indicator and developed in 2023 by an MT4 coder; however, looks different, and has additional settings that the conventional CCI indicator does not have. Furthermore, it is combined with moving averages to create signals. There are two moving averages – but we took one of them off as we found that it gets a bit too busy and a little confusing. To make it even more interesting, there is a zero line as well – which we removed to further simplify things. That’s why this tool can be tweaked in all kinds of different directions.
Steady On
As mentioned, we are going to make a few changes. We’ll post the default view (with brightened signal lines) and then display the version we’re going to discuss. We’re going to change the color of price to alpine white, keeping those easily distracted on task, including us.
Kind of busy, but we’ll clean it up by removing one of the moving average lines and the zero line. Like this…
Settings
The only settings we used for testing were the CCI setting, the “p” setting, and the first period and method settings. We did not use the second moving average, nor “c1, c2, and c3” settings. They appeared to make no changes to the signal lines, and we could not access the indicator’s code.
CCI: The main variable of this CCI derivative. The default setting is 34. By the way, the CCI signal line is yellow.
p: A smoothing, or reactive filter applied to the CCI signal line. Larger numbers smooth it out, and lower numbers result in quicker reactions to price. The default setting is 6.
period: The number of periods to create the red moving average line. The default value is 61.
method: This variable changes the type of moving average line. There are four choices; 0 – simple, 1 – exponential, 2 – smoothed, and 3 – linear weighted. The default value is 0 – simple.
Advantages
* Multiple approaches to use this indicator.
* Various settings for additional control.
* Uses a well known indicator, but better.
We’re Gonna Get Pips
Signal identification was reduced to only the CCI signal line and one of the moving averages. While there may be other ways to use the second moving average, we felt that it just “muddied” the water. The default settings were a little slow on the exit, but by making changes, you may find more success in using this both as an entry and exit indicator.
While there were only a couple of areas of congestion, the overall signal identification process was fairly straight forward.
How We Use It
Long signal: When the yellow CCI line crosses and closes above the red moving average line. Entry is on the open of the next period.
Short signal: When the yellow CCI line crosses and closes below the red moving average line. Entry is on the open of the next period.
Trials and Tribulations
If you’re new to these studies, we recommend looking at some of the older blogs to understand how we conduct our testing.
The six pairs we recommend testing are…
EUR/USD
AUD/NZD
EUR/GBP
AUD/CAD
CHF/JPY
CAD/SGD
The markets we test our indicators are the:
EUR/USD (Euro/US Dollar)
BTC/USD (Bitcoin/US Dollar)
XAU/USD (Gold/US Dollar)
SPX500 (S&P500 Index)
Timeframes and Results
We’ll run the StableFX indicator on the EUR/USD, BTC/USD, XAU/USD, and the SPX500 using the default and tweaked settings across the daily and 4-hour timeframes on the MT4 strategy tester.
We focus on three metrics;
Total trades
Win/Loss ratio
ROI (return on investment)
The Results Are In
Below are the spreadsheets from our tests.
Results and Reactions
Generally speaking, the tweaked values were very consistent. Overall, we were pleased. Of course, gold traders would be riding high, even on the default settings – always a bonus. Remember, the results we post are not necessarily the highest in any category because that’s just not helpful beyond the date of the blog. Market conditions change and you need to be vigilant of that. Never stop looking for better indicators for your algorithm.
Money Management
Money management is based on the NNFX risk profile. That information can be learned in the Advanced Course.
Resources
We’ve made the StableFX indicator available for download on our site from the indicator library. When you’re ready to get it, click HERE.
We’re Here For You
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Our only goal is to make you a better trader.
BTW – Any information communicated by Stonehill Forex Limited is solely for educational purposes. The information contained within the courses and on the website neither constitutes investment advice nor a general recommendation on investments. It is not intended to be and should not be interpreted as investment advice or a general recommendation on investment. Any person who places trades, orders or makes other types of trades and investments etc. is responsible for their own investment decisions and does so at their own risk. It is recommended that any person taking investment decisions consults with an independent financial advisor. Stonehill Forex Limited training courses and blogs are for educational purposes only, not a financial advisory service, and does not give financial advice or make general recommendations on investment.