Finding an edge in averages and oscillators

One of the things I like a lot about doing fx research is the kind of ideas you can implement to test ideas and find exploits in the market patterns. Unfortunately my repertoire atm is quite small, but in seeing Rel’s work (TY :D) I’m learning about methods that I think are really cool. For example, a really simple idea is to try to trade an oscillator away from extremes, but  this limits you because you have to wait for extremes to occur and perhaps at that point it’s not really useful to trade using that knowledge. However, other things to try include creating dynamic lines and try to trade via crosses similar to MAs. Or perhaps three lines and trading when a certain pattern stack (x>y>z, x>y, z>y, etc). The reading of existing indicators exists for a reason I think (MA crosses, RSI/Stoch oscillators, Pivot projections (flat), Bollinger bands(dynamic)). Each is interpreted using it’s own legend so to speak and maybe what doesn’t work when read as a cross over works well if you could implement it into bollinger bands.

 

I mostly just wanted to post these pictures, but thought a little context would be nice to have.

start

 

 

2

 

I’m already starting to confuse myself a bit with what exactly this is measuring, but if I get this, it’s game over.

Not useful:

  • Predicting the point where any line will fail to make a higher high or lower low. Bounds are already known, and help predict max points, not min points.

Useful:

  • Knowing if any line will cross the 0 line.
  • Knowing if a point will reach at least some point above/below the 0 mark.
  • Somewhat useful is knowing if a line will be subordinate or dominant to another line, since if x must be subordinate to y, y must be at least x value.

My favorite 2 SB posts.. Hmm.. Can I find a similar pattern?

http://www.forexfactory.com/showthread.php?p=5910720#post5910720

http://www.forexfactory.com/showthread.php?p=5910928#post5910928

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4 thoughts on “Finding an edge in averages and oscillators

  1. Pingback: Archiving the pivot, thoughts on averages and trends | LGtrades

  2. fe

    LG, you posted two links to SB Posts. Do you know what these charts represent?
    I thought maybe the average TCD Long and Short on the y axis and hours (0-23) on the x axis.
    Hoever, i wrote a program to test it with Eur/Usd 2013 data. The result differs, but there’s nearly no difference between TCD Long / Short:

    Kind regards fe

    Reply
    1. lgtrader Post author

      Hey FE,

      He mentions in the post that it’s a tactical(TAC) TCD, not the simple delta long/short. I don’t recall the exact formula, but I believe he mentions it in the krelisk thread (shouldn’t be too hard to find). Try this and let me know hoe it goes.
      -LG

      Reply
      1. fe

        Thanks, currently Kreslik is down, but I will retry it later and look for the tactical TAC formula. I will let you know how it worked out.

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