Subjectivity
When we see words such as “perfect” or “ultimate” we tend to become somewhat skeptical. After all, absolutes in anything are few and far between in our trading lives. Barring taxes and death, of course. You can count on those. Does that mean something can be on the better side of good? Of course. After all, you’ve found us, and we’ve put out some pretty decent indicators while filtering through a pretty large pile of filth. You’re welcome.
Looky Looky
We came across this indicator during one of our many searches and what immediately caught our eye was the fact that it was a price overlay two lines cross. There aren’t as many of this type, so naturally, we dropped everything else and took a closer look.
Is There Anybody Out There
There wasn’t much to go on with this indicator at first. Initially we only had the .ex4 file which of course would not permit us to look behind the curtain. Fortunately, Niels was able to find an .mq4 versions which gave us access to the inner workings since we’re always curious to see not only how things work, but more importantly, why. And, he took out some “extra” coding which really wasn’t necessary to make it quicker off the line when testing. Thank you, sir! Oh, and it came out in 2020 by a mystery coder. So thank you person, whoever you might be.
Why, oh Why?
The main calculation of this indicator is as follows:
If the close is larger than the last line value then current value = lowest low of x periods, else current value is the highest high of x periods. This creates the signal lines and gives us those lovely signals when the two lines cross. Cool, eh?
Imagery
The default view isn’t too bad, but it doesn’t show well in a screenshot. We’ll present it anyway and then show you what we did to make it friendlier to your eyeballs.
There’s a lot going on in this image that is somewhat difficult to see. Candles can be coded blue and red if you make some changes to their properties, and we’ve got the two faint signal lines with even more faint crossing point signals. Now, let’s take a look at a brighter version and remove the excess candle coloring.
Here, we changed the signals lines to yellow and aqua and made them solid. We also thickened up the signal points, although they’re a tad difficult to see. So, we’ll turn down the brightness just a smidgen.
Okay. Better. Now the lines are more balanced. The color settings here are as follows:
We’ll zoom into the “Short & Long cross signal” so you know what we’re talking about, as it is still somewhat difficult to see in our published images. The screen version actually looks pretty clear on the default settings (except the candle part).
We’ve identified the long signal line, the short signal line and the sweet spot…the actual signal. In this case, it’s a long.
Here is the short signal, identified with the red “dot”. Bada bing, badda boom.
Or Not
Yes, I know this might be overkill, but what if you got rid of the signal lines altogether. It just might clean up your charts even further because; the more digital spaghetti on your screen, the more difficult it can be to see what’s going on. So, how about this?
You Do You
Whatever you decide on the visuals, that’s totally okay with us. Let’s move on to the settings.
Settings
There are four variables; however, you’ll only need to bother with just two for your trading purposes.
SlowLength: The “slow” portion of the signal line calculation. The default setting is 7.
SlowPipDisplace: As far as charting goes, it doesn’t have much impact. However…and this is kind of a big deal — by leaving the settings to 0.0, it functions the same across all symbols. If you change it, it doesn’t. Your call.
FastLength: The “fast” portion of the signal line calculation. The default setting is 3.
FastPipDisplace: See SlowPipDisplace setting.
Advantages
* Quick acting.
* Could make a decent exit indicator.
* Easy to test.
How we use it.
One of three actions need to happen in the last 30 minutes prior to the close of the trading day. They are; opening, maintaining, or closing, a position. This is when you make your trading decisions, and not actually wait for the close at 1700 EST, because we trade on the daily time frame.
Long: When the aqua signal line crosses over the yellow signal line (and/or a green “dot” appears). Entry is in the last 30 minutes of the trading day.
Short: When the yellow signal line crosses over the aqua signal line (and/or a red “dot” appears). Entry is in the last 30 minutes of the trading day.
Darn Toot’in
Let’s all take a gander at the signals (on the default settings) and see how we did.
Pretty good, no? There was one more thing we wanted to point out, which may hope those of you who tend to jump the gun or, worse, anticipate without cause. There are areas where the lines appear to “kiss”. Unless you get the “dot”, you don’t have the signal. Check this out…
Even though the market was somewhat volatile, this bad boy kept you in all the way to the top. Now, that’s service with a smile.
Numerology
If you’re new to these studies, we recommend looking at some older blogs to understand how we conduct our testing. Below is the data from our testing.
Nicely Done
The results speak for themselves. However, one thing we noticed was that the slow length integer needs to be larger than the fast length integer, otherwise results may not be accurate. EUR and SPX500 did well and of course with BTC going nuts, the results we posted were nowhere near what maybe possible. Now go forth, and master your universe.
Resources
You can get the indicator from the on-line library at no charge. When you’re ready to get it, click, HERE. Also, be sure to subscribe to the Stonehill Forex YouTube channel for the technical analysis videos. Sign up for the Advanced NNFX Course HERE.
Our only goal is to make you a better trader.
*Our published testing results are based on money management strategies employed by the NNFX system and depend on varying external factors, which may be different between individuals and their specific broker conditions. No guarantee, trading recommendations, or other market suggestions are implied. Your results and subsequent trading activities are solely your own responsibility.
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.