Look’in Spiffy
We were plugging through a bunch of indicators by examining them visually and paused at this week’s contestant. We mused, “Where had we seen this?” Sure enough, we’ve profiled a couple of other indicators that looked very similar and wondered if this was something that was repackaged as a new or renamed tool.
Under the Gun
We lined up all three of them together and noticed there were differences, so we had Niels check the code and was able to confirm that they were indeed different, so we decided to press on with confidence. We’ll have a snapshot later to show you what we saw.
Easy Sleazy
The math in this was deliciously simple. It’s a comparison of;
EMA value of close – EMA value of high
and
EMA value of low – EMA value of close.
So we’ve got a direct relationship of price over specified periods of time. Let’s roll on.
Really?
There are both MT4 and MT5 versions readily available out there, so whichever flavor platform you’re using, it’s there for you. The version we’re using was coded by a guy who goes by the name of Peeter Paan and has a publishing date of 2019.
Moving Pictures
Let’s take a look at this; however, we opted not to display the default colors of blue and white because it’s not very intuitive with respect to long and short. Unless…you’re one of those individuals who use blue and white for their candle colors…then it makes total sense. For the rest of us, I’ll just double tap them to the easy-to-understand green and red.
What The???
Looks familiar, right? Well, we happen to profile two other indicators that have very similar visuals. They are the Average Sentiment Oscillator (middle), which goes by just ASO and was profiled in September ‘23 and Leman Trend (bottom), profiled in September ‘24. Check this out…
At first glance, these look pretty close with respect to signals. But they’re not, because having indicators with different math each confirming the other leads to a higher degree of confidence trade. Crikey, that’s some good stuff.
Settings
For this indicator, there are three settings, and you will be using all three in your testing adventures.
Close period: Uses the close price for the specified number of periods in the calculations. The default setting is 5.
Low Period: Uses the low price for the specified number of periods in the calculations. The default setting is 13.
High Period: Uses the high price for the specified number of periods in the calculations. The default setting is 34.
You Again
For those eagle-eyed community constituents, did you happen to notice those numbers in the default settings? Yep, that’s correct. None other than members of the Fibonacci sequence.
Do they mean anything with respect to a universal insight to an unseen force of nature alluding to something significant?
They’re just numbers that the designer/coder probably just stuck in there for the “cool factor”. They don’t necessarily mean they’re the worst, the best, or mediocre. It’s just a place to start.
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 green signal line crosses over the red signal line and is “on top”. Entry is in the last 30 minutes of the trading day.
Short: When the red signal line crosses over the green signal line and is “on top”. Entry is in the last 30 minutes of the trading day.
Jump Around
Let’s get down and jump around as we point out the signals.
Dang, that’s actually not too bad. Except for that bit of flippity-floppity action on the left side of the chart, the rest of it was pretty solid. Not bad on the default settings. It’s going to be pretty interesting to see how the testing shakes out.
“Num-bahs”
If you’re a Southie, you know what’s up. If not, check out the older blogs to understand how we conduct our testing. Below is the data from our testing.
Solid State
Our results from testing were quite encouraging. We’ve got great metrics across the board. Even the EURUSD and SPX500 did quite well, and we didn’t even post anywhere near the best results, so there’s lots of room for improvement. BTC and XAU continue to do well given recent price history. Have a ball with this one…we did.
Resources
This little gem is available at the Stonehill Forex library at the low, low, low price of zilch. When you’re ready to get it and add it to your testing arsenal, 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.