GKD-C RSX VDI w/ Floating Levels [Loxx]Giga Kaleidoscope GKD-C RSX VDI w/ Floating Levels is a Confirmation module included in Loxx's "Giga Kaleidoscope Modularized Trading System".
█ GKD-C RSX VDI w/ Floating Levels
What is the VDI (Volatility Direction Index)?
The Volatility Direction Index Index (VDI) is a technical analysis indicator developed by Loxx. It is designed to help traders and investors identify potential trend reversals, confirm existing trends, and recognize overbought or oversold market conditions. VDI is a momentum oscillator that measures the volatility and price direction of an asset over a specified period.
Here's a step-by-step breakdown of how to calculate VDI:
Choose a period (n) over which to calculate the VDI, typically 8 or 10.
Calculate the true range for each day:
True Range = max
Calculate the directional bias for each day:
If (Today's High - Previous Close) > (Previous Close - Today's Low), the directional bias is positive.
If (Today's High - Previous Close) < (Previous Close - Today's Low), the directional bias is negative.
Calculate the VDI for each day with a positive directional bias:
VDI Positive = * 100
Calculate the VDI for each day with a negative directional bias:
VDI Negative = * 100
Calculate the n-day sum of positive VDI values (Sum_Positive_VDI) and the n-day sum of negative VDI values (Sum_Negative_VDI).
Calculate the final Volatility Direction Index Index value:
VDI = (Sum_Positive_VDI - Sum_Negative_VDI) / (Sum_Positive_VDI + Sum_Negative_VDI) * 100
This VDI value can then be plotted on a chart over time to help traders and investors visualize the momentum and volatility of the asset's price.
VDI oscillates between -100 and +100. Positive VDI values indicate bullishness, while negative VDI values suggest bearishness. Values near the extremes (+100 or -100) can be considered overbought or oversold, potentially signaling a trend reversal. Traders often use additional technical analysis tools and techniques to confirm signals generated by the VDI.
What is the RSX?
The Jurik RSX is a technical indicator developed by Mark Jurik to measure the momentum and strength of price movements in financial markets, such as stocks, commodities, and currencies. It is an advanced version of the traditional Relative Strength Index (RSI), designed to offer smoother and less lagging signals compared to the standard RSI.
The main advantage of the Jurik RSX is that it provides more accurate and timely signals for traders and analysts, thanks to its improved calculation methods that reduce noise and lag in the indicator's output. This enables better decision-making when analyzing market trends and potential trading opportunities.
What is RSX VDI w/ Confidence Bands
This indicator calculates the RSX VDI and then wraps that calculation with uppper and lower floating levels, similar to Donchian channels. There are three types of signals: Levels cross, dynamic middle cross, and signal cross.
Additional Features
This indicator allows you to select from 33 source types. They are as follows:
Close
Open
High
Low
Median
Typical
Weighted
Average
Average Median Body
Trend Biased
Trend Biased (Extreme)
HA Close
HA Open
HA High
HA Low
HA Median
HA Typical
HA Weighted
HA Average
HA Average Median Body
HA Trend Biased
HA Trend Biased (Extreme)
HAB Close
HAB Open
HAB High
HAB Low
HAB Median
HAB Typical
HAB Weighted
HAB Average
HAB Average Median Body
HAB Trend Biased
HAB Trend Biased (Extreme)
What are Heiken Ashi "better" candles?
Heiken Ashi "better" candles are a modified version of the standard Heiken Ashi candles, which are a popular charting technique used in technical analysis. Heiken Ashi candles help traders identify trends and potential reversal points by smoothing out price data and reducing market noise. The "better formula" was proposed by Sebastian Schmidt in an article published by BNP Paribas in Warrants & Zertifikate, a German magazine, in August 2004. The aim of this formula is to further improve the smoothing of the Heiken Ashi chart and enhance its effectiveness in identifying trends and reversals.
Standard Heiken Ashi candles are calculated using the following formulas:
Heiken Ashi Close = (Open + High + Low + Close) / 4
Heiken Ashi Open = (Previous Heiken Ashi Open + Previous Heiken Ashi Close) / 2
Heiken Ashi High = Max (High, Heiken Ashi Open, Heiken Ashi Close)
Heiken Ashi Low = Min (Low, Heiken Ashi Open, Heiken Ashi Close)
The "better formula" modifies the standard Heiken Ashi calculation by incorporating additional smoothing, which can help reduce noise and make it easier to identify trends and reversals. The modified formulas for Heiken Ashi "better" candles are as follows:
Better Heiken Ashi Close = (Open + High + Low + Close) / 4
Better Heiken Ashi Open = (Previous Better Heiken Ashi Open + Previous Better Heiken Ashi Close) / 2
Better Heiken Ashi High = Max (High, Better Heiken Ashi Open, Better Heiken Ashi Close)
Better Heiken Ashi Low = Min (Low, Better Heiken Ashi Open, Better Heiken Ashi Close)
Smoothing Factor = 2 / (N + 1), where N is the chosen period for smoothing
Smoothed Better Heiken Ashi Open = (Better Heiken Ashi Open * Smoothing Factor) + (Previous Smoothed Better Heiken Ashi Open * (1 - Smoothing Factor))
Smoothed Better Heiken Ashi Close = (Better Heiken Ashi Close * Smoothing Factor) + (Previous Smoothed Better Heiken Ashi Close * (1 - Smoothing Factor))
The smoothed Better Heiken Ashi Open and Close values are then used to calculate the smoothed Better Heiken Ashi High and Low values, resulting in "better" candles that provide a clearer representation of the market trend and potential reversal points.
It's important to note that, like any other technical analysis tool, Heiken Ashi "better" candles are not foolproof and should be used in conjunction with other indicators and analysis techniques to make well-informed trading decisions.
Heiken Ashi "better" candles, as mentioned previously, provide a clearer representation of market trends and potential reversal points by reducing noise and smoothing out price data. When using these candles in conjunction with other technical analysis tools and indicators, traders can gain valuable insights into market behavior and make more informed decisions.
To effectively use Heiken Ashi "better" candles in your trading strategy, consider the following tips:
Trend Identification: Heiken Ashi "better" candles can help you identify the prevailing trend in the market. When the majority of the candles are green (or another color, depending on your chart settings) and there are no or few lower wicks, it may indicate a strong uptrend. Conversely, when the majority of the candles are red (or another color) and there are no or few upper wicks, it may signal a strong downtrend.
Trend Reversals: Look for potential trend reversals when a change in the color of the candles occurs, especially when accompanied by longer wicks. For example, if a green candle with a long lower wick is followed by a red candle, it could indicate a bearish reversal. Similarly, a red candle with a long upper wick followed by a green candle may suggest a bullish reversal.
Support and Resistance: You can use Heiken Ashi "better" candles to identify potential support and resistance levels. When the candles are consistently moving in one direction and then suddenly change color with longer wicks, it could indicate the presence of a support or resistance level.
Stop-Loss and Take-Profit: Using Heiken Ashi "better" candles can help you manage risk by determining optimal stop-loss and take-profit levels. For instance, you can place your stop-loss below the low of the most recent green candle in an uptrend or above the high of the most recent red candle in a downtrend.
Confirming Signals: Heiken Ashi "better" candles should be used in conjunction with other technical indicators, such as moving averages, oscillators, or chart patterns, to confirm signals and improve the accuracy of your analysis.
In this implementation, you have the choice of AMA, KAMA, or T3 smoothing. These are as follows:
Kaufman Adaptive Moving Average (KAMA)
The Kaufman Adaptive Moving Average (KAMA) is a type of adaptive moving average used in technical analysis to smooth out price fluctuations and identify trends. The KAMA adjusts its smoothing factor based on the market's volatility, making it more responsive in volatile markets and smoother in calm markets. The KAMA is calculated using three different efficiency ratios that determine the appropriate smoothing factor for the current market conditions. These ratios are based on the noise level of the market, the speed at which the market is moving, and the length of the moving average. The KAMA is a popular choice among traders who prefer to use adaptive indicators to identify trends and potential reversals.
Adaptive Moving Average
The Adaptive Moving Average (AMA) is a type of moving average that adjusts its sensitivity to price movements based on market conditions. It uses a ratio between the current price and the highest and lowest prices over a certain lookback period to determine its level of smoothing. The AMA can help reduce lag and increase responsiveness to changes in trend direction, making it useful for traders who want to follow trends while avoiding false signals. The AMA is calculated by multiplying a smoothing constant with the difference between the current price and the previous AMA value, then adding the result to the previous AMA value.
T3
The T3 moving average is a type of technical indicator used in financial analysis to identify trends in price movements. It is similar to the Exponential Moving Average (EMA) and the Double Exponential Moving Average (DEMA), but uses a different smoothing algorithm.
The T3 moving average is calculated using a series of exponential moving averages that are designed to filter out noise and smooth the data. The resulting smoothed data is then weighted with a non-linear function to produce a final output that is more responsive to changes in trend direction.
The T3 moving average can be customized by adjusting the length of the moving average, as well as the weighting function used to smooth the data. It is commonly used in conjunction with other technical indicators as part of a larger trading strategy.
█ Giga Kaleidoscope Modularized Trading System
Core components of an NNFX algorithmic trading strategy
The NNFX algorithm is built on the principles of trend, momentum, and volatility. There are six core components in the NNFX trading algorithm:
1. Volatility - price volatility; e.g., Average True Range, True Range Double, Close-to-Close, etc.
2. Baseline - a moving average to identify price trend
3. Confirmation 1 - a technical indicator used to identify trends
4. Confirmation 2 - a technical indicator used to identify trends
5. Continuation - a technical indicator used to identify trends
6. Volatility/Volume - a technical indicator used to identify volatility/volume breakouts/breakdown
7. Exit - a technical indicator used to determine when a trend is exhausted
What is Volatility in the NNFX trading system?
In the NNFX (No Nonsense Forex) trading system, ATR (Average True Range) is typically used to measure the volatility of an asset. It is used as a part of the system to help determine the appropriate stop loss and take profit levels for a trade. ATR is calculated by taking the average of the true range values over a specified period.
True range is calculated as the maximum of the following values:
-Current high minus the current low
-Absolute value of the current high minus the previous close
-Absolute value of the current low minus the previous close
ATR is a dynamic indicator that changes with changes in volatility. As volatility increases, the value of ATR increases, and as volatility decreases, the value of ATR decreases. By using ATR in NNFX system, traders can adjust their stop loss and take profit levels according to the volatility of the asset being traded. This helps to ensure that the trade is given enough room to move, while also minimizing potential losses.
Other types of volatility include True Range Double (TRD), Close-to-Close, and Garman-Klass
What is a Baseline indicator?
The baseline is essentially a moving average, and is used to determine the overall direction of the market.
The baseline in the NNFX system is used to filter out trades that are not in line with the long-term trend of the market. The baseline is plotted on the chart along with other indicators, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR).
Trades are only taken when the price is in the same direction as the baseline. For example, if the baseline is sloping upwards, only long trades are taken, and if the baseline is sloping downwards, only short trades are taken. This approach helps to ensure that trades are in line with the overall trend of the market, and reduces the risk of entering trades that are likely to fail.
By using a baseline in the NNFX system, traders can have a clear reference point for determining the overall trend of the market, and can make more informed trading decisions. The baseline helps to filter out noise and false signals, and ensures that trades are taken in the direction of the long-term trend.
What is a Confirmation indicator?
Confirmation indicators are technical indicators that are used to confirm the signals generated by primary indicators. Primary indicators are the core indicators used in the NNFX system, such as the Average True Range (ATR), the Moving Average (MA), and the Relative Strength Index (RSI).
The purpose of the confirmation indicators is to reduce false signals and improve the accuracy of the trading system. They are designed to confirm the signals generated by the primary indicators by providing additional information about the strength and direction of the trend.
Some examples of confirmation indicators that may be used in the NNFX system include the Bollinger Bands, the MACD (Moving Average Convergence Divergence), and the MACD Oscillator. These indicators can provide information about the volatility, momentum, and trend strength of the market, and can be used to confirm the signals generated by the primary indicators.
In the NNFX system, confirmation indicators are used in combination with primary indicators and other filters to create a trading system that is robust and reliable. By using multiple indicators to confirm trading signals, the system aims to reduce the risk of false signals and improve the overall profitability of the trades.
What is a Continuation indicator?
In the NNFX (No Nonsense Forex) trading system, a continuation indicator is a technical indicator that is used to confirm a current trend and predict that the trend is likely to continue in the same direction. A continuation indicator is typically used in conjunction with other indicators in the system, such as a baseline indicator, to provide a comprehensive trading strategy.
What is a Volatility/Volume indicator?
Volume indicators, such as the On Balance Volume (OBV), the Chaikin Money Flow (CMF), or the Volume Price Trend (VPT), are used to measure the amount of buying and selling activity in a market. They are based on the trading volume of the market, and can provide information about the strength of the trend. In the NNFX system, volume indicators are used to confirm trading signals generated by the Moving Average and the Relative Strength Index. Volatility indicators include Average Direction Index, Waddah Attar, and Volatility Ratio. In the NNFX trading system, volatility is a proxy for volume and vice versa.
By using volume indicators as confirmation tools, the NNFX trading system aims to reduce the risk of false signals and improve the overall profitability of trades. These indicators can provide additional information about the market that is not captured by the primary indicators, and can help traders to make more informed trading decisions. In addition, volume indicators can be used to identify potential changes in market trends and to confirm the strength of price movements.
What is an Exit indicator?
The exit indicator is used in conjunction with other indicators in the system, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR), to provide a comprehensive trading strategy.
The exit indicator in the NNFX system can be any technical indicator that is deemed effective at identifying optimal exit points. Examples of exit indicators that are commonly used include the Parabolic SAR, the Average Directional Index (ADX), and the Chandelier Exit.
The purpose of the exit indicator is to identify when a trend is likely to reverse or when the market conditions have changed, signaling the need to exit a trade. By using an exit indicator, traders can manage their risk and prevent significant losses.
In the NNFX system, the exit indicator is used in conjunction with a stop loss and a take profit order to maximize profits and minimize losses. The stop loss order is used to limit the amount of loss that can be incurred if the trade goes against the trader, while the take profit order is used to lock in profits when the trade is moving in the trader's favor.
Overall, the use of an exit indicator in the NNFX trading system is an important component of a comprehensive trading strategy. It allows traders to manage their risk effectively and improve the profitability of their trades by exiting at the right time.
How does Loxx's GKD (Giga Kaleidoscope Modularized Trading System) implement the NNFX algorithm outlined above?
Loxx's GKD v1.0 system has five types of modules (indicators/strategies). These modules are:
1. GKD-BT - Backtesting module (Volatility, Number 1 in the NNFX algorithm)
2. GKD-B - Baseline module (Baseline and Volatility/Volume, Numbers 1 and 2 in the NNFX algorithm)
3. GKD-C - Confirmation 1/2 and Continuation module (Confirmation 1/2 and Continuation, Numbers 3, 4, and 5 in the NNFX algorithm)
4. GKD-V - Volatility/Volume module (Confirmation 1/2, Number 6 in the NNFX algorithm)
5. GKD-E - Exit module (Exit, Number 7 in the NNFX algorithm)
(additional module types will added in future releases)
Each module interacts with every module by passing data between modules. Data is passed between each module as described below:
GKD-B => GKD-V => GKD-C(1) => GKD-C(2) => GKD-C(Continuation) => GKD-E => GKD-BT
That is, the Baseline indicator passes its data to Volatility/Volume. The Volatility/Volume indicator passes its values to the Confirmation 1 indicator. The Confirmation 1 indicator passes its values to the Confirmation 2 indicator. The Confirmation 2 indicator passes its values to the Continuation indicator. The Continuation indicator passes its values to the Exit indicator, and finally, the Exit indicator passes its values to the Backtest strategy.
This chaining of indicators requires that each module conform to Loxx's GKD protocol, therefore allowing for the testing of every possible combination of technical indicators that make up the six components of the NNFX algorithm.
What does the application of the GKD trading system look like?
Example trading system:
Backtest: Strategy with 1-3 take profits, trailing stop loss, multiple types of PnL volatility, and 2 backtesting styles
Baseline: Hull Moving Average
Volatility/Volume: Hurst Exponent
Confirmation 1: RSX VDI w/ Floating Levels as shown on the chart above
Confirmation 2: Williams Percent Range
Continuation: Fisher Transform
Exit: Rex Oscillator
Each GKD indicator is denoted with a module identifier of either: GKD-BT, GKD-B, GKD-C, GKD-V, or GKD-E. This allows traders to understand to which module each indicator belongs and where each indicator fits into the GKD protocol chain.
Giga Kaleidoscope Modularized Trading System Signals (based on the NNFX algorithm)
Standard Entry
1. GKD-C Confirmation 1 Signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
6. GKD-C Confirmation 1 signal was less than 7 candles prior
Volatility/Volume Entry
1. GKD-V Volatility/Volume signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-B Baseline agrees
6. GKD-C Confirmation 1 signal was less than 7 candles prior
Continuation Entry
1. Standard Entry, Baseline Entry, or Pullback; entry triggered previously
2. GKD-B Baseline hasn't crossed since entry signal trigger
3. GKD-C Confirmation Continuation Indicator signals
4. GKD-C Confirmation 1 agrees
5. GKD-B Baseline agrees
6. GKD-C Confirmation 2 agrees
1-Candle Rule Standard Entry
1. GKD-C Confirmation 1 signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
1-Candle Rule Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 1 signal was less than 7 candles prior
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees
1-Candle Rule Volatility/Volume Entry
1. GKD-V Volatility/Volume signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 1 signal was less than 7 candles prior
Next Candle:
1. Price retraced (Long: close < close or Short: close > close)
2. GKD-B Volatility/Volume agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-B Baseline agrees
PullBack Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is beyond 1.0x Volatility of Baseline
Next Candle:
1. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
2. GKD-C Confirmation 1 agrees
3. GKD-C Confirmation 2 agrees
4. GKD-V Volatility/Volume Agrees
]█ Setting up the GKD
The GKD system involves chaining indicators together. These are the steps to set this up.
Use a GKD-C indicator alone on a chart
1. Inside the GKD-C indicator, change the "Confirmation Type" setting to "Solo Confirmation Simple"
Use a GKD-V indicator alone on a chart
**nothing, it's already useable on the chart without any settings changes
Use a GKD-B indicator alone on a chart
**nothing, it's already useable on the chart without any settings changes
Baseline (Baseline, Backtest)
1. Import the GKD-B Baseline into the GKD-BT Backtest: "Input into Volatility/Volume or Backtest (Baseline testing)"
2. Inside the GKD-BT Backtest, change the setting "Backtest Special" to "Baseline"
Volatility/Volume (Volatility/Volume, Backte st)
1. Inside the GKD-V indicator, change the "Testing Type" setting to "Solo"
2. Inside the GKD-V indicator, change the "Signal Type" setting to "Crossing" (neither traditional nor both can be backtested)
3. Import the GKD-V indicator into the GKD-BT Backtest: "Input into C1 or Backtest"
4. Inside the GKD-BT Backtest, change the setting "Backtest Special" to "Volatility/Volume"
5. Inside the GKD-BT Backtest, a) change the setting "Backtest Type" to "Trading" if using a directional GKD-V indicator; or, b) change the setting "Backtest Type" to "Full" if using a directional or non-directional GKD-V indicator (non-directional GKD-V can only test Longs and Shorts separately)
6. If "Backtest Type" is set to "Full": Inside the GKD-BT Backtest, change the setting "Backtest Side" to "Long" or "Short
7. If "Backtest Type" is set to "Full": To allow the system to open multiple orders at one time so you test all Longs or Shorts, open the GKD-BT Backtest, click the tab "Properties" and then insert a value of something like 10 orders into the "Pyramiding" settings. This will allow 10 orders to be opened at one time which should be enough to catch all possible Longs or Shorts.
Solo Confirmation Simple (Confirmation, Backtest)
1. Inside the GKD-C indicator, change the "Confirmation Type" setting to "Solo Confirmation Simple"
1. Import the GKD-C indicator into the GKD-BT Backtest: "Input into Backtest"
2. Inside the GKD-BT Backtest, change the setting "Backtest Special" to "Solo Confirmation Simple"
Solo Confirmation Complex without Exits (Baseline, Volatility/Volume, Confirmation, Backtest)
1. Inside the GKD-V indicator, change the "Testing Type" setting to "Chained"
2. Import the GKD-B Baseline into the GKD-V indicator: "Input into Volatility/Volume or Backtest (Baseline testing)"
3. Inside the GKD-C indicator, change the "Confirmation Type" setting to "Solo Confirmation Complex"
4. Import the GKD-V indicator into the GKD-C indicator: "Input into C1 or Backtest"
5. Inside the GKD-BT Backtest, change the setting "Backtest Special" to "GKD Full wo/ Exits"
6. Import the GKD-C into the GKD-BT Backtest: "Input into Exit or Backtest"
Solo Confirmation Complex with Exits (Baseline, Volatility/Volume, Confirmation, Exit, Backtest)
1. Inside the GKD-V indicator, change the "Testing Type" setting to "Chained"
2. Import the GKD-B Baseline into the GKD-V indicator: "Input into Volatility/Volume or Backtest (Baseline testing)"
3. Inside the GKD-C indicator, change the "Confirmation Type" setting to "Solo Confirmation Complex"
4. Import the GKD-V indicator into the GKD-C indicator: "Input into C1 or Backtest"
5. Import the GKD-C indicator into the GKD-E indicator: "Input into Exit"
6. Inside the GKD-BT Backtest, change the setting "Backtest Special" to "GKD Full w/ Exits"
7. Import the GKD-E into the GKD-BT Backtest: "Input into Backtest"
Full GKD without Exits (Baseline, Volatility/Volume, Confirmation 1, Confirmation 2, Continuation, Backtest)
1. Inside the GKD-V indicator, change the "Testing Type" setting to "Chained"
2. Import the GKD-B Baseline into the GKD-V indicator: "Input into Volatility/Volume or Backtest (Baseline testing)"
3. Inside the GKD-C 1 indicator, change the "Confirmation Type" setting to "Confirmation 1"
4. Import the GKD-V indicator into the GKD-C 1 indicator: "Input into C1 or Backtest"
5. Inside the GKD-C 2 indicator, change the "Confirmation Type" setting to "Confirmation 2"
6. Import the GKD-C 1 indicator into the GKD-C 2 indicator: "Input into C2"
7. Inside the GKD-C Continuation indicator, change the "Confirmation Type" setting to "Continuation"
8. Inside the GKD-BT Backtest, change the setting "Backtest Special" to "GKD Full wo/ Exits"
9. Import the GKD-E into the GKD-BT Backtest: "Input into Exit or Backtest"
Full GKD with Exits (Baseline, Volatility/Volume, Confirmation 1, Confirmation 2, Continuation, Exit, Backtest)
1. Inside the GKD-V indicator, change the "Testing Type" setting to "Chained"
2. Import the GKD-B Baseline into the GKD-V indicator: "Input into Volatility/Volume or Backtest (Baseline testing)"
3. Inside the GKD-C 1 indicator, change the "Confirmation Type" setting to "Confirmation 1"
4. Import the GKD-V indicator into the GKD-C 1 indicator: "Input into C1 or Backtest"
5. Inside the GKD-C 2 indicator, change the "Confirmation Type" setting to "Confirmation 2"
6. Import the GKD-C 1 indicator into the GKD-C 2 indicator: "Input into C2"
7. Inside the GKD-C Continuation indicator, change the "Confirmation Type" setting to "Continuation"
8. Import the GKD-C Continuation indicator into the GKD-E indicator: "Input into Exit"
9. Inside the GKD-BT Backtest, change the setting "Backtest Special" to "GKD Full w/ Exits"
10. Import the GKD-E into the GKD-BT Backtest: "Input into Backtest"
Baseline + Volatility/Volume (Baseline, Volatility/Volume, Backtest)
1. Inside the GKD-V indicator, change the "Testing Type" setting to "Baseline + Volatility/Volume"
2. Inside the GKD-V indicator, make sure the "Signal Type" setting is set to "Traditional"
3. Import the GKD-B Baseline into the GKD-V indicator: "Input into Volatility/Volume or Backtest (Baseline testing)"
4. Inside the GKD-BT Backtest, change the setting "Backtest Special" to "Baseline + Volatility/Volume"
5. Import the GKD-V into the GKD-BT Backtest: "Input into C1 or Backtest"
6. Inside the GKD-BT Backtest, change the setting "Backtest Type" to "Full". For this backtest, you must test Longs and Shorts separately
7. To allow the system to open multiple orders at one time so you can test all Longs or Shorts, open the GKD-BT Backtest, click the tab "Properties" and then insert a value of something like 10 orders into the "Pyramiding" settings. This will allow 10 orders to be opened at one time which should be enough to catch all possible Longs or Shorts.
Requirements
Inputs
Confirmation 1: GKD-V Volatility / Volume indicator
Confirmation 2: GKD-C Confirmation indicator
Continuation: GKD-C Confirmation indicator
Solo Confirmation Simple: GKD-B Baseline
Solo Confirmation Complex: GKD-V Volatility / Volume indicator
Solo Confirmation Super Complex: GKD-V Volatility / Volume indicator
Stacked 1: None
Stacked 2+: GKD-C, GKD-V, or GKD-B Stacked 1
Outputs
Confirmation 1: GKD-C Confirmation 2 indicator
Confirmation 2: GKD-C Continuation indicator
Continuation: GKD-E Exit indicator
Solo Confirmation Simple: GKD-BT Backtest
Solo Confirmation Complex: GKD-BT Backtest or GKD-E Exit indicator
Solo Confirmation Super Complex: GKD-C Continuation indicator
Stacked 1: GKD-C, GKD-V, or GKD-B Stacked 2+
Stacked 2+: GKD-C, GKD-V, or GKD-B Stacked 2+ or GKD-BT Backtest
Additional features will be added in future releases.
스크립트에서 "profit"에 대해 찾기
GKD-C Variety RSI of Adaptive Lookback Averages [Loxx]Giga Kaleidoscope GKD-C Variety RSI of Adaptive Lookback Averages is a Confirmation module included in Loxx's "Giga Kaleidoscope Modularized Trading System".
█ Giga Kaleidoscope Modularized Trading System
What is Loxx's "Giga Kaleidoscope Modularized Trading System"?
The Giga Kaleidoscope Modularized Trading System is a trading system built on the philosophy of the NNFX (No Nonsense Forex) algorithmic trading.
What is the NNFX algorithmic trading strategy?
The NNFX (No-Nonsense Forex) trading system is a comprehensive approach to Forex trading that is designed to simplify the process and remove the confusion and complexity that often surrounds trading. The system was developed by a Forex trader who goes by the pseudonym "VP" and has gained a significant following in the Forex community.
The NNFX trading system is based on a set of rules and guidelines that help traders make objective and informed decisions. These rules cover all aspects of trading, including market analysis, trade entry, stop loss placement, and trade management.
Here are the main components of the NNFX trading system:
1. Trading Philosophy: The NNFX trading system is based on the idea that successful trading requires a comprehensive understanding of the market, objective analysis, and strict risk management. The system aims to remove subjective elements from trading and focuses on objective rules and guidelines.
2. Technical Analysis: The NNFX trading system relies heavily on technical analysis and uses a range of indicators to identify high-probability trading opportunities. The system uses a combination of trend-following and mean-reverting strategies to identify trades.
3. Market Structure: The NNFX trading system emphasizes the importance of understanding the market structure, including price action, support and resistance levels, and market cycles. The system uses a range of tools to identify the market structure, including trend lines, channels, and moving averages.
4. Trade Entry: The NNFX trading system has strict rules for trade entry. The system uses a combination of technical indicators to identify high-probability trades, and traders must meet specific criteria to enter a trade.
5. Stop Loss Placement: The NNFX trading system places a significant emphasis on risk management and requires traders to place a stop loss order on every trade. The system uses a combination of technical analysis and market structure to determine the appropriate stop loss level.
6. Trade Management: The NNFX trading system has specific rules for managing open trades. The system aims to minimize risk and maximize profit by using a combination of trailing stops, take profit levels, and position sizing.
Overall, the NNFX trading system is designed to be a straightforward and easy-to-follow approach to Forex trading that can be applied by traders of all skill levels.
Core components of an NNFX algorithmic trading strategy
The NNFX algorithm is built on the principles of trend, momentum, and volatility. There are six core components in the NNFX trading algorithm:
1. Volatility - price volatility; e.g., Average True Range, True Range Double, Close-to-Close, etc.
2. Baseline - a moving average to identify price trend
3. Confirmation 1 - a technical indicator used to identify trends
4. Confirmation 2 - a technical indicator used to identify trends
5. Continuation - a technical indicator used to identify trends
6. Volatility/Volume - a technical indicator used to identify volatility/volume breakouts/breakdown
7. Exit - a technical indicator used to determine when a trend is exhausted
What is Volatility in the NNFX trading system?
In the NNFX (No Nonsense Forex) trading system, ATR (Average True Range) is typically used to measure the volatility of an asset. It is used as a part of the system to help determine the appropriate stop loss and take profit levels for a trade. ATR is calculated by taking the average of the true range values over a specified period.
True range is calculated as the maximum of the following values:
-Current high minus the current low
-Absolute value of the current high minus the previous close
-Absolute value of the current low minus the previous close
ATR is a dynamic indicator that changes with changes in volatility. As volatility increases, the value of ATR increases, and as volatility decreases, the value of ATR decreases. By using ATR in NNFX system, traders can adjust their stop loss and take profit levels according to the volatility of the asset being traded. This helps to ensure that the trade is given enough room to move, while also minimizing potential losses.
Other types of volatility include True Range Double (TRD), Close-to-Close, and Garman-Klass
What is a Baseline indicator?
The baseline is essentially a moving average, and is used to determine the overall direction of the market.
The baseline in the NNFX system is used to filter out trades that are not in line with the long-term trend of the market. The baseline is plotted on the chart along with other indicators, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR).
Trades are only taken when the price is in the same direction as the baseline. For example, if the baseline is sloping upwards, only long trades are taken, and if the baseline is sloping downwards, only short trades are taken. This approach helps to ensure that trades are in line with the overall trend of the market, and reduces the risk of entering trades that are likely to fail.
By using a baseline in the NNFX system, traders can have a clear reference point for determining the overall trend of the market, and can make more informed trading decisions. The baseline helps to filter out noise and false signals, and ensures that trades are taken in the direction of the long-term trend.
What is a Confirmation indicator?
Confirmation indicators are technical indicators that are used to confirm the signals generated by primary indicators. Primary indicators are the core indicators used in the NNFX system, such as the Average True Range (ATR), the Moving Average (MA), and the Relative Strength Index (RSI).
The purpose of the confirmation indicators is to reduce false signals and improve the accuracy of the trading system. They are designed to confirm the signals generated by the primary indicators by providing additional information about the strength and direction of the trend.
Some examples of confirmation indicators that may be used in the NNFX system include the Bollinger Bands, the MACD (Moving Average Convergence Divergence), and the MACD Oscillator. These indicators can provide information about the volatility, momentum, and trend strength of the market, and can be used to confirm the signals generated by the primary indicators.
In the NNFX system, confirmation indicators are used in combination with primary indicators and other filters to create a trading system that is robust and reliable. By using multiple indicators to confirm trading signals, the system aims to reduce the risk of false signals and improve the overall profitability of the trades.
What is a Continuation indicator?
In the NNFX (No Nonsense Forex) trading system, a continuation indicator is a technical indicator that is used to confirm a current trend and predict that the trend is likely to continue in the same direction. A continuation indicator is typically used in conjunction with other indicators in the system, such as a baseline indicator, to provide a comprehensive trading strategy.
What is a Volatility/Volume indicator?
Volume indicators, such as the On Balance Volume (OBV), the Chaikin Money Flow (CMF), or the Volume Price Trend (VPT), are used to measure the amount of buying and selling activity in a market. They are based on the trading volume of the market, and can provide information about the strength of the trend. In the NNFX system, volume indicators are used to confirm trading signals generated by the Moving Average and the Relative Strength Index. Volatility indicators include Average Direction Index, Waddah Attar, and Volatility Ratio. In the NNFX trading system, volatility is a proxy for volume and vice versa.
By using volume indicators as confirmation tools, the NNFX trading system aims to reduce the risk of false signals and improve the overall profitability of trades. These indicators can provide additional information about the market that is not captured by the primary indicators, and can help traders to make more informed trading decisions. In addition, volume indicators can be used to identify potential changes in market trends and to confirm the strength of price movements.
What is an Exit indicator?
The exit indicator is used in conjunction with other indicators in the system, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR), to provide a comprehensive trading strategy.
The exit indicator in the NNFX system can be any technical indicator that is deemed effective at identifying optimal exit points. Examples of exit indicators that are commonly used include the Parabolic SAR, the Average Directional Index (ADX), and the Chandelier Exit.
The purpose of the exit indicator is to identify when a trend is likely to reverse or when the market conditions have changed, signaling the need to exit a trade. By using an exit indicator, traders can manage their risk and prevent significant losses.
In the NNFX system, the exit indicator is used in conjunction with a stop loss and a take profit order to maximize profits and minimize losses. The stop loss order is used to limit the amount of loss that can be incurred if the trade goes against the trader, while the take profit order is used to lock in profits when the trade is moving in the trader's favor.
Overall, the use of an exit indicator in the NNFX trading system is an important component of a comprehensive trading strategy. It allows traders to manage their risk effectively and improve the profitability of their trades by exiting at the right time.
How does Loxx's GKD (Giga Kaleidoscope Modularized Trading System) implement the NNFX algorithm outlined above?
Loxx's GKD v1.0 system has five types of modules (indicators/strategies). These modules are:
1. GKD-BT - Backtesting module (Volatility, Number 1 in the NNFX algorithm)
2. GKD-B - Baseline module (Baseline and Volatility/Volume, Numbers 1 and 2 in the NNFX algorithm)
3. GKD-C - Confirmation 1/2 and Continuation module (Confirmation 1/2 and Continuation, Numbers 3, 4, and 5 in the NNFX algorithm)
4. GKD-V - Volatility/Volume module (Confirmation 1/2, Number 6 in the NNFX algorithm)
5. GKD-E - Exit module (Exit, Number 7 in the NNFX algorithm)
(additional module types will added in future releases)
Each module interacts with every module by passing data between modules. Data is passed between each module as described below:
GKD-B => GKD-V => GKD-C(1) => GKD-C(2) => GKD-C(Continuation) => GKD-E => GKD-BT
That is, the Baseline indicator passes its data to Volatility/Volume. The Volatility/Volume indicator passes its values to the Confirmation 1 indicator. The Confirmation 1 indicator passes its values to the Confirmation 2 indicator. The Confirmation 2 indicator passes its values to the Continuation indicator. The Continuation indicator passes its values to the Exit indicator, and finally, the Exit indicator passes its values to the Backtest strategy.
This chaining of indicators requires that each module conform to Loxx's GKD protocol, therefore allowing for the testing of every possible combination of technical indicators that make up the six components of the NNFX algorithm.
What does the application of the GKD trading system look like?
Example trading system:
Backtest: Strategy with 1-3 take profits, trailing stop loss, multiple types of PnL volatility, and 2 backtesting styles
Baseline: Hull Moving Average
Volatility/Volume: Hurst Exponent
Confirmation 1: Variety RSI of Adaptive Lookback Averages as shown on the chart above
Confirmation 2: Williams Percent Range
Continuation: Fisher Transform
Exit: Rex Oscillator
Each GKD indicator is denoted with a module identifier of either: GKD-BT, GKD-B, GKD-C, GKD-V, or GKD-E. This allows traders to understand to which module each indicator belongs and where each indicator fits into the GKD protocol chain.
Giga Kaleidoscope Modularized Trading System Signals (based on the NNFX algorithm)
Standard Entry
1. GKD-C Confirmation 1 Signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
6. GKD-C Confirmation 1 signal was less than 7 candles prior
Volatility/Volume Entry
1. GKD-V Volatility/Volume signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-B Baseline agrees
6. GKD-C Confirmation 1 signal was less than 7 candles prior
Continuation Entry
1. Standard Entry, Baseline Entry, or Pullback; entry triggered previously
2. GKD-B Baseline hasn't crossed since entry signal trigger
3. GKD-C Confirmation Continuation Indicator signals
4. GKD-C Confirmation 1 agrees
5. GKD-B Baseline agrees
6. GKD-C Confirmation 2 agrees
1-Candle Rule Standard Entry
1. GKD-C Confirmation 1 signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
1-Candle Rule Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 1 signal was less than 7 candles prior
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees
1-Candle Rule Volatility/Volume Entry
1. GKD-V Volatility/Volume signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 1 signal was less than 7 candles prior
Next Candle:
1. Price retraced (Long: close < close or Short: close > close)
2. GKD-B Volatility/Volume agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-B Baseline agrees
PullBack Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is beyond 1.0x Volatility of Baseline
Next Candle:
1. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
2. GKD-C Confirmation 1 agrees
3. GKD-C Confirmation 2 agrees
4. GKD-V Volatility/Volume Agrees
]█ Setting up the GKD
The GKD system involves chaining indicators together. These are the steps to set this up.
Use a GKD-C indicator alone on a chart
1. Inside the GKD-C indicator, change the "Confirmation Type" setting to "Solo Confirmation Simple"
Use a GKD-V indicator alone on a chart
**nothing, it's already useable on the chart without any settings changes
Use a GKD-B indicator alone on a chart
**nothing, it's already useable on the chart without any settings changes
Baseline (Baseline, Backtest)
1. Import the GKD-B Baseline into the GKD-BT Backtest: "Input into Volatility/Volume or Backtest (Baseline testing)"
2. Inside the GKD-BT Backtest, change the setting "Backtest Special" to "Baseline"
Volatility/Volume (Volatility/Volume, Backte st)
1. Inside the GKD-V indicator, change the "Testing Type" setting to "Solo"
2. Inside the GKD-V indicator, change the "Signal Type" setting to "Crossing" (neither traditional nor both can be backtested)
3. Import the GKD-V indicator into the GKD-BT Backtest: "Input into C1 or Backtest"
4. Inside the GKD-BT Backtest, change the setting "Backtest Special" to "Volatility/Volume"
5. Inside the GKD-BT Backtest, a) change the setting "Backtest Type" to "Trading" if using a directional GKD-V indicator; or, b) change the setting "Backtest Type" to "Full" if using a directional or non-directional GKD-V indicator (non-directional GKD-V can only test Longs and Shorts separately)
6. If "Backtest Type" is set to "Full": Inside the GKD-BT Backtest, change the setting "Backtest Side" to "Long" or "Short
7. If "Backtest Type" is set to "Full": To allow the system to open multiple orders at one time so you test all Longs or Shorts, open the GKD-BT Backtest, click the tab "Properties" and then insert a value of something like 10 orders into the "Pyramiding" settings. This will allow 10 orders to be opened at one time which should be enough to catch all possible Longs or Shorts.
Solo Confirmation Simple (Confirmation, Backtest)
1. Inside the GKD-C indicator, change the "Confirmation Type" setting to "Solo Confirmation Simple"
1. Import the GKD-C indicator into the GKD-BT Backtest: "Input into Backtest"
2. Inside the GKD-BT Backtest, change the setting "Backtest Special" to "Solo Confirmation Simple"
Solo Confirmation Complex without Exits (Baseline, Volatility/Volume, Confirmation, Backtest)
1. Inside the GKD-V indicator, change the "Testing Type" setting to "Chained"
2. Import the GKD-B Baseline into the GKD-V indicator: "Input into Volatility/Volume or Backtest (Baseline testing)"
3. Inside the GKD-C indicator, change the "Confirmation Type" setting to "Solo Confirmation Complex"
4. Import the GKD-V indicator into the GKD-C indicator: "Input into C1 or Backtest"
5. Inside the GKD-BT Backtest, change the setting "Backtest Special" to "GKD Full wo/ Exits"
6. Import the GKD-C into the GKD-BT Backtest: "Input into Exit"
Solo Confirmation Complex with Exits (Baseline, Volatility/Volume, Confirmation, Exit, Backtest)
1. Inside the GKD-V indicator, change the "Testing Type" setting to "Chained"
2. Import the GKD-B Baseline into the GKD-V indicator: "Input into Volatility/Volume or Backtest (Baseline testing)"
3. Inside the GKD-C indicator, change the "Confirmation Type" setting to "Solo Confirmation Complex"
4. Import the GKD-V indicator into the GKD-C indicator: "Input into C1 or Backtest"
5. Import the GKD-C indicator into the GKD-E indicator: "Input into Exit"
6. Inside the GKD-BT Backtest, change the setting "Backtest Special" to "GKD Full w/ Exits"
7. Import the GKD-E into the GKD-BT Backtest: "Input into Backtest"
Full GKD without Exits (Baseline, Volatility/Volume, Confirmation 1, Confirmation 2, Continuation, Backtest)
1. Inside the GKD-V indicator, change the "Testing Type" setting to "Chained"
2. Import the GKD-B Baseline into the GKD-V indicator: "Input into Volatility/Volume or Backtest (Baseline testing)"
3. Inside the GKD-C 1 indicator, change the "Confirmation Type" setting to "Confirmation 1"
4. Import the GKD-V indicator into the GKD-C 1 indicator: "Input into C1 or Backtest"
5. Inside the GKD-C 2 indicator, change the "Confirmation Type" setting to "Confirmation 2"
6. Import the GKD-C 1 indicator into the GKD-C 2 indicator: "Input into C2"
7. Inside the GKD-C Continuation indicator, change the "Confirmation Type" setting to "Continuation"
8. Inside the GKD-BT Backtest, change the setting "Backtest Special" to "GKD Full wo/ Exits"
9. Import the GKD-E into the GKD-BT Backtest: "Input into Exit"
Full GKD with Exits (Baseline, Volatility/Volume, Confirmation 1, Confirmation 2, Continuation, Exit, Backtest)
1. Inside the GKD-V indicator, change the "Testing Type" setting to "Chained"
2. Import the GKD-B Baseline into the GKD-V indicator: "Input into Volatility/Volume or Backtest (Baseline testing)"
3. Inside the GKD-C 1 indicator, change the "Confirmation Type" setting to "Confirmation 1"
4. Import the GKD-V indicator into the GKD-C 1 indicator: "Input into C1 or Backtest"
5. Inside the GKD-C 2 indicator, change the "Confirmation Type" setting to "Confirmation 2"
6. Import the GKD-C 1 indicator into the GKD-C 2 indicator: "Input into C2"
7. Inside the GKD-C Continuation indicator, change the "Confirmation Type" setting to "Continuation"
8. Import the GKD-C Continuation indicator into the GKD-E indicator: "Input into Exit"
9. Inside the GKD-BT Backtest, change the setting "Backtest Special" to "GKD Full w/ Exits"
10. Import the GKD-E into the GKD-BT Backtest: "Input into Backtest"
Baseline + Volatility/Volume (Baseline, Volatility/Volume, Backtest)
1. Inside the GKD-V indicator, change the "Testing Type" setting to "Baseline + Volatility/Volume"
2. Inside the GKD-V indicator, make sure the "Signal Type" setting is set to "Traditional"
3. Import the GKD-B Baseline into the GKD-V indicator: "Input into Volatility/Volume or Backtest (Baseline testing)"
4. Inside the GKD-BT Backtest, change the setting "Backtest Special" to "Baseline + Volatility/Volume"
5. Import the GKD-V into the GKD-BT Backtest: "Input into C1 or Backtest"
6. Inside the GKD-BT Backtest, change the setting "Backtest Type" to "Full". For this backtest, you must test Longs and Shorts separately
7. To allow the system to open multiple orders at one time so you can test all Longs or Shorts, open the GKD-BT Backtest, click the tab "Properties" and then insert a value of something like 10 orders into the "Pyramiding" settings. This will allow 10 orders to be opened at one time which should be enough to catch all possible Longs or Shorts.
█ GKD-C Variety RSI of Adaptive Lookback Averages
This indicator contains 7 different types of RSI:
RSX
Regular
Slow
Rapid
Harris
Cuttler
Ehlers Smoothed
What is RSI?
RSI stands for Relative Strength Index . It is a technical indicator used to measure the strength or weakness of a financial instrument's price action.
The RSI is calculated based on the price movement of an asset over a specified period of time, typically 14 days, and is expressed on a scale of 0 to 100. The RSI is considered overbought when it is above 70 and oversold when it is below 30.
Traders and investors use the RSI to identify potential buy and sell signals. When the RSI indicates that an asset is oversold, it may be considered a buying opportunity, while an overbought RSI may signal that it is time to sell or take profits.
It's important to note that the RSI should not be used in isolation and should be used in conjunction with other technical and fundamental analysis tools to make informed trading decisions.
What is RSX?
Jurik RSX is a technical analysis indicator that is a variation of the Relative Strength Index Smoothed ( RSX ) indicator. It was developed by Mark Jurik and is designed to help traders identify trends and momentum in the market.
The Jurik RSX uses a combination of the RSX indicator and an adaptive moving average (AMA) to smooth out the price data and reduce the number of false signals. The adaptive moving average is designed to adjust the smoothing period based on the current market conditions, which makes the indicator more responsive to changes in price.
The Jurik RSX can be used to identify potential trend reversals and momentum shifts in the market. It oscillates between 0 and 100, with values above 50 indicating a bullish trend and values below 50 indicating a bearish trend . Traders can use these levels to make trading decisions, such as buying when the indicator crosses above 50 and selling when it crosses below 50.
The Jurik RSX is a more advanced version of the RSX indicator, and while it can be useful in identifying potential trade opportunities, it should not be used in isolation. It is best used in conjunction with other technical and fundamental analysis tools to make informed trading decisions.
What is Slow RSI?
Slow RSI is a variation of the traditional Relative Strength Index ( RSI ) indicator. It is a more smoothed version of the RSI and is designed to filter out some of the noise and short-term price fluctuations that can occur with the standard RSI .
The Slow RSI uses a longer period of time than the traditional RSI , typically 21 periods instead of 14. This longer period helps to smooth out the price data and makes the indicator less reactive to short-term price fluctuations.
Like the traditional RSI , the Slow RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Slow RSI is a more conservative version of the RSI and can be useful in identifying longer-term trends in the market. However, it can also be slower to respond to changes in price, which may result in missed trading opportunities. Traders may choose to use a combination of both the Slow RSI and the traditional RSI to make informed trading decisions.
What is Rapid RSI?
Same as regular RSI but with a faster calculation method
What is Harris RSI?
Harris RSI is a technical analysis indicator that is a variation of the Relative Strength Index ( RSI ). It was developed by Larry Harris and is designed to help traders identify potential trend changes and momentum shifts in the market.
The Harris RSI uses a different calculation formula compared to the traditional RSI . It takes into account both the opening and closing prices of a financial instrument, as well as the high and low prices. The Harris RSI is also normalized to a range of 0 to 100, with values above 50 indicating a bullish trend and values below 50 indicating a bearish trend .
Like the traditional RSI , the Harris RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Harris RSI is a more advanced version of the RSI and can be useful in identifying longer-term trends in the market. However, it can also generate more false signals than the standard RSI . Traders may choose to use a combination of both the Harris RSI and the traditional RSI to make informed trading decisions.
What is Cuttler RSI?
Cuttler RSI is a technical analysis indicator that is a variation of the Relative Strength Index ( RSI ). It was developed by Curt Cuttler and is designed to help traders identify potential trend changes and momentum shifts in the market.
The Cuttler RSI uses a different calculation formula compared to the traditional RSI . It takes into account the difference between the closing price of a financial instrument and the average of the high and low prices over a specified period of time. This difference is then normalized to a range of 0 to 100, with values above 50 indicating a bullish trend and values below 50 indicating a bearish trend .
Like the traditional RSI , the Cuttler RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Cuttler RSI is a more advanced version of the RSI and can be useful in identifying longer-term trends in the market. However, it can also generate more false signals than the standard RSI . Traders may choose to use a combination of both the Cuttler RSI and the traditional RSI to make informed trading decisions.
What is Ehlers Smoothed RSI?
Ehlers smoothed RSI is a technical analysis indicator that is a variation of the Relative Strength Index ( RSI ). It was developed by John Ehlers and is designed to help traders identify potential trend changes and momentum shifts in the market.
The Ehlers smoothed RSI uses a different calculation formula compared to the traditional RSI . It uses a smoothing algorithm that is designed to reduce the noise and random fluctuations that can occur with the standard RSI . The smoothing algorithm is based on a concept called "digital signal processing" and is intended to improve the accuracy of the indicator.
Like the traditional RSI , the Ehlers smoothed RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Ehlers smoothed RSI can be useful in identifying longer-term trends and momentum shifts in the market. However, it can also generate more false signals than the standard RSI . Traders may choose to use a combination of both the Ehlers smoothed RSI and the traditional RSI to make informed trading decisions.
What is the Adaptive Lookback Period?
Adaptive Lookback Period defines a function called _albper that takes two parameters: swingCount and speed. The function is designed to calculate an adaptive lookback period for a financial chart, based on the count of detected swings and a speed factor. The adaptive lookback period can be used in various technical analysis techniques to adapt to market conditions.
Here's a step-by-step description of the code:
1. Initialize swing to 0.
2. If the current bar index is greater than 3 (meaning there are at least 4 bars of data), check for swings in price: a. If a downward swing is detected, set swing to -1.; b. If an upward swing is detected, set swing to 1.
3. Initialize swingBuffer to swing, k to 0, and n to 0.
4. Use a while loop to iterate through the bar indices up to the current bar index, while the swing count (n) is less than the specified swingCount:, a. If the swing buffer at the index k is not 0 (i.e., there's a swing at that index), increment n by 1.; b. Increment k by 1.
5. Calculate the adaptive lookback period (albPeriod) based on the swing count and speed factor, with a minimum value of 1.
6. Return the calculated albPeriod.
In summary, this function takes in the desired swing count and speed factor, and it calculates the adaptive lookback period based on the detected swings in the price data. It detects upward and downward swings in price and calculates the lookback period according to the input parameters swingCount and speed. This adaptive lookback period can be used in various technical analysis techniques to adapt to market conditions.
What is Variety RSI of Adaptive Lookback Averages?
This indicator calcualtes the adaptive lookback period and uses that value to smooth price before outputting one of seven different types of RSI. Because the period input is different each bar, this indicator uses specialized filters of common moving average caculations tht allow for variability in the period input.
Requirements
Inputs
Confirmation 1: GKD-V Volatility / Volume indicator
Confirmation 2: GKD-C Confirmation indicator
Continuation: GKD-C Confirmation indicator
Solo Confirmation Simple: GKD-B Baseline
Solo Confirmation Complex: GKD-V Volatility / Volume indicator
Solo Confirmation Super Complex: GKD-V Volatility / Volume indicator
Stacked 1: None
Stacked 2+: GKD-C, GKD-V, or GKD-B Stacked 1
Outputs
Confirmation 1: GKD-C Confirmation 2 indicator
Confirmation 2: GKD-C Continuation indicator
Continuation: GKD-E Exit indicator
Solo Confirmation Simple: GKD-BT Backtest
Solo Confirmation Complex: GKD-BT Backtest or GKD-E Exit indicator
Solo Confirmation Super Complex: GKD-C Continuation indicator
Stacked 1: GKD-C, GKD-V, or GKD-B Stacked 2+
Stacked 2+: GKD-C, GKD-V, or GKD-B Stacked 2+ or GKD-BT Backtest
Additional features will be added in future releases.
GKD-C Stochastic RSI of Smoothed Price [Loxx]Giga Kaleidoscope GKD-C Stochastic RSI of Smoothed Price is a Confirmation module included in Loxx's "Giga Kaleidoscope Modularized Trading System".
█ Giga Kaleidoscope Modularized Trading System
What is Loxx's "Giga Kaleidoscope Modularized Trading System"?
The Giga Kaleidoscope Modularized Trading System is a trading system built on the philosophy of the NNFX (No Nonsense Forex) algorithmic trading.
What is the NNFX algorithmic trading strategy?
The NNFX (No-Nonsense Forex) trading system is a comprehensive approach to Forex trading that is designed to simplify the process and remove the confusion and complexity that often surrounds trading. The system was developed by a Forex trader who goes by the pseudonym "VP" and has gained a significant following in the Forex community.
The NNFX trading system is based on a set of rules and guidelines that help traders make objective and informed decisions. These rules cover all aspects of trading, including market analysis, trade entry, stop loss placement, and trade management.
Here are the main components of the NNFX trading system:
1. Trading Philosophy: The NNFX trading system is based on the idea that successful trading requires a comprehensive understanding of the market, objective analysis, and strict risk management. The system aims to remove subjective elements from trading and focuses on objective rules and guidelines.
2. Technical Analysis: The NNFX trading system relies heavily on technical analysis and uses a range of indicators to identify high-probability trading opportunities. The system uses a combination of trend-following and mean-reverting strategies to identify trades.
3. Market Structure: The NNFX trading system emphasizes the importance of understanding the market structure, including price action, support and resistance levels, and market cycles. The system uses a range of tools to identify the market structure, including trend lines, channels, and moving averages.
4. Trade Entry: The NNFX trading system has strict rules for trade entry. The system uses a combination of technical indicators to identify high-probability trades, and traders must meet specific criteria to enter a trade.
5. Stop Loss Placement: The NNFX trading system places a significant emphasis on risk management and requires traders to place a stop loss order on every trade. The system uses a combination of technical analysis and market structure to determine the appropriate stop loss level.
6. Trade Management: The NNFX trading system has specific rules for managing open trades. The system aims to minimize risk and maximize profit by using a combination of trailing stops, take profit levels, and position sizing.
Overall, the NNFX trading system is designed to be a straightforward and easy-to-follow approach to Forex trading that can be applied by traders of all skill levels.
Core components of an NNFX algorithmic trading strategy
The NNFX algorithm is built on the principles of trend, momentum, and volatility. There are six core components in the NNFX trading algorithm:
1. Volatility - price volatility; e.g., Average True Range, True Range Double, Close-to-Close, etc.
2. Baseline - a moving average to identify price trend
3. Confirmation 1 - a technical indicator used to identify trends
4. Confirmation 2 - a technical indicator used to identify trends
5. Continuation - a technical indicator used to identify trends
6. Volatility/Volume - a technical indicator used to identify volatility/volume breakouts/breakdown
7. Exit - a technical indicator used to determine when a trend is exhausted
What is Volatility in the NNFX trading system?
In the NNFX (No Nonsense Forex) trading system, ATR (Average True Range) is typically used to measure the volatility of an asset. It is used as a part of the system to help determine the appropriate stop loss and take profit levels for a trade. ATR is calculated by taking the average of the true range values over a specified period.
True range is calculated as the maximum of the following values:
-Current high minus the current low
-Absolute value of the current high minus the previous close
-Absolute value of the current low minus the previous close
ATR is a dynamic indicator that changes with changes in volatility. As volatility increases, the value of ATR increases, and as volatility decreases, the value of ATR decreases. By using ATR in NNFX system, traders can adjust their stop loss and take profit levels according to the volatility of the asset being traded. This helps to ensure that the trade is given enough room to move, while also minimizing potential losses.
Other types of volatility include True Range Double (TRD), Close-to-Close, and Garman-Klass
What is a Baseline indicator?
The baseline is essentially a moving average, and is used to determine the overall direction of the market.
The baseline in the NNFX system is used to filter out trades that are not in line with the long-term trend of the market. The baseline is plotted on the chart along with other indicators, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR).
Trades are only taken when the price is in the same direction as the baseline. For example, if the baseline is sloping upwards, only long trades are taken, and if the baseline is sloping downwards, only short trades are taken. This approach helps to ensure that trades are in line with the overall trend of the market, and reduces the risk of entering trades that are likely to fail.
By using a baseline in the NNFX system, traders can have a clear reference point for determining the overall trend of the market, and can make more informed trading decisions. The baseline helps to filter out noise and false signals, and ensures that trades are taken in the direction of the long-term trend.
What is a Confirmation indicator?
Confirmation indicators are technical indicators that are used to confirm the signals generated by primary indicators. Primary indicators are the core indicators used in the NNFX system, such as the Average True Range (ATR), the Moving Average (MA), and the Relative Strength Index (RSI).
The purpose of the confirmation indicators is to reduce false signals and improve the accuracy of the trading system. They are designed to confirm the signals generated by the primary indicators by providing additional information about the strength and direction of the trend.
Some examples of confirmation indicators that may be used in the NNFX system include the Bollinger Bands, the MACD (Moving Average Convergence Divergence), and the MACD Oscillator. These indicators can provide information about the volatility, momentum, and trend strength of the market, and can be used to confirm the signals generated by the primary indicators.
In the NNFX system, confirmation indicators are used in combination with primary indicators and other filters to create a trading system that is robust and reliable. By using multiple indicators to confirm trading signals, the system aims to reduce the risk of false signals and improve the overall profitability of the trades.
What is a Continuation indicator?
In the NNFX (No Nonsense Forex) trading system, a continuation indicator is a technical indicator that is used to confirm a current trend and predict that the trend is likely to continue in the same direction. A continuation indicator is typically used in conjunction with other indicators in the system, such as a baseline indicator, to provide a comprehensive trading strategy.
What is a Volatility/Volume indicator?
Volume indicators, such as the On Balance Volume (OBV), the Chaikin Money Flow (CMF), or the Volume Price Trend (VPT), are used to measure the amount of buying and selling activity in a market. They are based on the trading volume of the market, and can provide information about the strength of the trend. In the NNFX system, volume indicators are used to confirm trading signals generated by the Moving Average and the Relative Strength Index. Volatility indicators include Average Direction Index, Waddah Attar, and Volatility Ratio. In the NNFX trading system, volatility is a proxy for volume and vice versa.
By using volume indicators as confirmation tools, the NNFX trading system aims to reduce the risk of false signals and improve the overall profitability of trades. These indicators can provide additional information about the market that is not captured by the primary indicators, and can help traders to make more informed trading decisions. In addition, volume indicators can be used to identify potential changes in market trends and to confirm the strength of price movements.
What is an Exit indicator?
The exit indicator is used in conjunction with other indicators in the system, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR), to provide a comprehensive trading strategy.
The exit indicator in the NNFX system can be any technical indicator that is deemed effective at identifying optimal exit points. Examples of exit indicators that are commonly used include the Parabolic SAR, the Average Directional Index (ADX), and the Chandelier Exit.
The purpose of the exit indicator is to identify when a trend is likely to reverse or when the market conditions have changed, signaling the need to exit a trade. By using an exit indicator, traders can manage their risk and prevent significant losses.
In the NNFX system, the exit indicator is used in conjunction with a stop loss and a take profit order to maximize profits and minimize losses. The stop loss order is used to limit the amount of loss that can be incurred if the trade goes against the trader, while the take profit order is used to lock in profits when the trade is moving in the trader's favor.
Overall, the use of an exit indicator in the NNFX trading system is an important component of a comprehensive trading strategy. It allows traders to manage their risk effectively and improve the profitability of their trades by exiting at the right time.
How does Loxx's GKD (Giga Kaleidoscope Modularized Trading System) implement the NNFX algorithm outlined above?
Loxx's GKD v1.0 system has five types of modules (indicators/strategies). These modules are:
1. GKD-BT - Backtesting module (Volatility, Number 1 in the NNFX algorithm)
2. GKD-B - Baseline module (Baseline and Volatility/Volume, Numbers 1 and 2 in the NNFX algorithm)
3. GKD-C - Confirmation 1/2 and Continuation module (Confirmation 1/2 and Continuation, Numbers 3, 4, and 5 in the NNFX algorithm)
4. GKD-V - Volatility/Volume module (Confirmation 1/2, Number 6 in the NNFX algorithm)
5. GKD-E - Exit module (Exit, Number 7 in the NNFX algorithm)
(additional module types will added in future releases)
Each module interacts with every module by passing data between modules. Data is passed between each module as described below:
GKD-B => GKD-V => GKD-C(1) => GKD-C(2) => GKD-C(Continuation) => GKD-E => GKD-BT
That is, the Baseline indicator passes its data to Volatility/Volume. The Volatility/Volume indicator passes its values to the Confirmation 1 indicator. The Confirmation 1 indicator passes its values to the Confirmation 2 indicator. The Confirmation 2 indicator passes its values to the Continuation indicator. The Continuation indicator passes its values to the Exit indicator, and finally, the Exit indicator passes its values to the Backtest strategy.
This chaining of indicators requires that each module conform to Loxx's GKD protocol, therefore allowing for the testing of every possible combination of technical indicators that make up the six components of the NNFX algorithm.
What does the application of the GKD trading system look like?
Example trading system:
Backtest: Strategy with 1-3 take profits, trailing stop loss, multiple types of PnL volatility, and 2 backtesting styles
Baseline: Hull Moving Average
Volatility/Volume: Hurst Exponent
Confirmation 1: Stochastic RSI of Smoothed Price as shown on the chart above
Confirmation 2: Williams Percent Range
Continuation: Fisher Transform
Exit: Rex Oscillator
Each GKD indicator is denoted with a module identifier of either: GKD-BT, GKD-B, GKD-C, GKD-V, or GKD-E. This allows traders to understand to which module each indicator belongs and where each indicator fits into the GKD protocol chain.
Giga Kaleidoscope Modularized Trading System Signals (based on the NNFX algorithm)
Standard Entry
1. GKD-C Confirmation 1 Signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
6. GKD-C Confirmation 1 signal was less than 7 candles prior
Continuation Entry
1. Standard Entry, Baseline Entry, or Pullback; entry triggered previously
2. GKD-B Baseline hasn't crossed since entry signal trigger
3. GKD-C Confirmation Continuation Indicator signals
4. GKD-C Confirmation 1 agrees
5. GKD-B Baseline agrees
6. GKD-C Confirmation 2 agrees
1-Candle Rule Standard Entry
1. GKD-C Confirmation 1 signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
1-Candle Rule Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 1 signal was less than 7 candles prior
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees
PullBack Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is beyond 1.0x Volatility of Baseline
Next Candle:
1. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees
█ GKD-C Stochastic RSI of Smoothed Price
This indicator contains 7 different types of RSI:
RSX
Regular
Slow
Rapid
Harris
Cuttler
Ehlers Smoothed
What is RSI?
RSI stands for Relative Strength Index . It is a technical indicator used to measure the strength or weakness of a financial instrument's price action.
The RSI is calculated based on the price movement of an asset over a specified period of time, typically 14 days, and is expressed on a scale of 0 to 100. The RSI is considered overbought when it is above 70 and oversold when it is below 30.
Traders and investors use the RSI to identify potential buy and sell signals. When the RSI indicates that an asset is oversold, it may be considered a buying opportunity, while an overbought RSI may signal that it is time to sell or take profits.
It's important to note that the RSI should not be used in isolation and should be used in conjunction with other technical and fundamental analysis tools to make informed trading decisions.
What is RSX?
Jurik RSX is a technical analysis indicator that is a variation of the Relative Strength Index Smoothed ( RSX ) indicator. It was developed by Mark Jurik and is designed to help traders identify trends and momentum in the market.
The Jurik RSX uses a combination of the RSX indicator and an adaptive moving average (AMA) to smooth out the price data and reduce the number of false signals. The adaptive moving average is designed to adjust the smoothing period based on the current market conditions, which makes the indicator more responsive to changes in price.
The Jurik RSX can be used to identify potential trend reversals and momentum shifts in the market. It oscillates between 0 and 100, with values above 50 indicating a bullish trend and values below 50 indicating a bearish trend . Traders can use these levels to make trading decisions, such as buying when the indicator crosses above 50 and selling when it crosses below 50.
The Jurik RSX is a more advanced version of the RSX indicator, and while it can be useful in identifying potential trade opportunities, it should not be used in isolation. It is best used in conjunction with other technical and fundamental analysis tools to make informed trading decisions.
What is Slow RSI?
Slow RSI is a variation of the traditional Relative Strength Index ( RSI ) indicator. It is a more smoothed version of the RSI and is designed to filter out some of the noise and short-term price fluctuations that can occur with the standard RSI .
The Slow RSI uses a longer period of time than the traditional RSI , typically 21 periods instead of 14. This longer period helps to smooth out the price data and makes the indicator less reactive to short-term price fluctuations.
Like the traditional RSI , the Slow RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Slow RSI is a more conservative version of the RSI and can be useful in identifying longer-term trends in the market. However, it can also be slower to respond to changes in price, which may result in missed trading opportunities. Traders may choose to use a combination of both the Slow RSI and the traditional RSI to make informed trading decisions.
What is Rapid RSI?
Same as regular RSI but with a faster calculation method
What is Harris RSI?
Harris RSI is a technical analysis indicator that is a variation of the Relative Strength Index ( RSI ). It was developed by Larry Harris and is designed to help traders identify potential trend changes and momentum shifts in the market.
The Harris RSI uses a different calculation formula compared to the traditional RSI . It takes into account both the opening and closing prices of a financial instrument, as well as the high and low prices. The Harris RSI is also normalized to a range of 0 to 100, with values above 50 indicating a bullish trend and values below 50 indicating a bearish trend .
Like the traditional RSI , the Harris RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Harris RSI is a more advanced version of the RSI and can be useful in identifying longer-term trends in the market. However, it can also generate more false signals than the standard RSI . Traders may choose to use a combination of both the Harris RSI and the traditional RSI to make informed trading decisions.
What is Cuttler RSI?
Cuttler RSI is a technical analysis indicator that is a variation of the Relative Strength Index ( RSI ). It was developed by Curt Cuttler and is designed to help traders identify potential trend changes and momentum shifts in the market.
The Cuttler RSI uses a different calculation formula compared to the traditional RSI . It takes into account the difference between the closing price of a financial instrument and the average of the high and low prices over a specified period of time. This difference is then normalized to a range of 0 to 100, with values above 50 indicating a bullish trend and values below 50 indicating a bearish trend .
Like the traditional RSI , the Cuttler RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Cuttler RSI is a more advanced version of the RSI and can be useful in identifying longer-term trends in the market. However, it can also generate more false signals than the standard RSI . Traders may choose to use a combination of both the Cuttler RSI and the traditional RSI to make informed trading decisions.
What is Ehlers Smoothed RSI?
Ehlers smoothed RSI is a technical analysis indicator that is a variation of the Relative Strength Index ( RSI ). It was developed by John Ehlers and is designed to help traders identify potential trend changes and momentum shifts in the market.
The Ehlers smoothed RSI uses a different calculation formula compared to the traditional RSI . It uses a smoothing algorithm that is designed to reduce the noise and random fluctuations that can occur with the standard RSI . The smoothing algorithm is based on a concept called "digital signal processing" and is intended to improve the accuracy of the indicator.
Like the traditional RSI , the Ehlers smoothed RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Ehlers smoothed RSI can be useful in identifying longer-term trends and momentum shifts in the market. However, it can also generate more false signals than the standard RSI . Traders may choose to use a combination of both the Ehlers smoothed RSI and the traditional RSI to make informed trading decisions.
What is Stochastic RSI?
Stochastic RSI (StochRSI) is a technical analysis indicator that combines the concepts of the Stochastic Oscillator and the Relative Strength Index (RSI). It is used to identify potential overbought and oversold conditions in financial markets, as well as to generate buy and sell signals based on the momentum of price movements.
To understand Stochastic RSI, let's first define the two individual indicators it is based on:
Stochastic Oscillator: A momentum indicator that compares a particular closing price of a security to a range of its prices over a certain period. It is used to identify potential trend reversals and generate buy and sell signals.
Relative Strength Index (RSI): A momentum oscillator that measures the speed and change of price movements. It ranges between 0 and 100 and is used to identify overbought or oversold conditions in the market.
Now, let's dive into the Stochastic RSI:
The Stochastic RSI applies the Stochastic Oscillator formula to the RSI values, essentially creating an indicator of an indicator. It helps to identify when the RSI is in overbought or oversold territory with more sensitivity, providing more frequent signals than the standalone RSI.
The formula for StochRSI is as follows:
StochRSI = (RSI - Lowest Low RSI) / (Highest High RSI - Lowest Low RSI)
Where:
RSI is the current RSI value.
Lowest Low RSI is the lowest RSI value over a specified period (e.g., 14 days).
Highest High RSI is the highest RSI value over the same specified period.
StochRSI ranges from 0 to 1, but it is usually multiplied by 100 for easier interpretation, making the range 0 to 100. Like the RSI, values close to 0 indicate oversold conditions, while values close to 100 indicate overbought conditions. However, since the StochRSI is more sensitive, traders typically use 20 as the oversold threshold and 80 as the overbought threshold.
Traders use the StochRSI to generate buy and sell signals by looking for crossovers with a signal line (a moving average of the StochRSI), similar to the way the Stochastic Oscillator is used. When the StochRSI crosses above the signal line, it is considered a bullish signal, and when it crosses below the signal line, it is considered a bearish signal.
It is essential to use the Stochastic RSI in conjunction with other technical analysis tools and indicators, as well as to consider the overall market context, to improve the accuracy and reliability of trading signals.
What is Stochastic RSI of Smoothed Price?
This indicator is just as it's title suggests. There are six different signal types and various price smoothing types.
Signal types included are the following;
Fixed Levels
Floating Levels
Quantile Levels
Fixed Middle
Floating Middle
Quantile Middle
Requirements
Inputs
Confirmation 1 and Solo Confirmation: GKD-V Volatility / Volume indicator
Confirmation 2: GKD-C Confirmation indicator
Outputs
Confirmation 2 and Solo Confirmation Complex: GKD-E Exit indicator
Confirmation 1: GKD-C Confirmation indicator
Continuation: GKD-E Exit indicator
Solo Confirmation Simple: GKD-BT Backtest strategy
Additional features will be added in future releases.
GKD-C Synthetic, Smoothed Variety RSI [Loxx]Giga Kaleidoscope GKD-C Synthetic, Smoothed Variety RSI is a Confirmation module included in Loxx's "Giga Kaleidoscope Modularized Trading System".
█ Giga Kaleidoscope Modularized Trading System
What is Loxx's "Giga Kaleidoscope Modularized Trading System"?
The Giga Kaleidoscope Modularized Trading System is a trading system built on the philosophy of the NNFX (No Nonsense Forex) algorithmic trading.
What is the NNFX algorithmic trading strategy?
The NNFX (No-Nonsense Forex) trading system is a comprehensive approach to Forex trading that is designed to simplify the process and remove the confusion and complexity that often surrounds trading. The system was developed by a Forex trader who goes by the pseudonym "VP" and has gained a significant following in the Forex community.
The NNFX trading system is based on a set of rules and guidelines that help traders make objective and informed decisions. These rules cover all aspects of trading, including market analysis, trade entry, stop loss placement, and trade management.
Here are the main components of the NNFX trading system:
1. Trading Philosophy: The NNFX trading system is based on the idea that successful trading requires a comprehensive understanding of the market, objective analysis, and strict risk management. The system aims to remove subjective elements from trading and focuses on objective rules and guidelines.
2. Technical Analysis: The NNFX trading system relies heavily on technical analysis and uses a range of indicators to identify high-probability trading opportunities. The system uses a combination of trend-following and mean-reverting strategies to identify trades.
3. Market Structure: The NNFX trading system emphasizes the importance of understanding the market structure, including price action, support and resistance levels, and market cycles. The system uses a range of tools to identify the market structure, including trend lines, channels, and moving averages.
4. Trade Entry: The NNFX trading system has strict rules for trade entry. The system uses a combination of technical indicators to identify high-probability trades, and traders must meet specific criteria to enter a trade.
5. Stop Loss Placement: The NNFX trading system places a significant emphasis on risk management and requires traders to place a stop loss order on every trade. The system uses a combination of technical analysis and market structure to determine the appropriate stop loss level.
6. Trade Management: The NNFX trading system has specific rules for managing open trades. The system aims to minimize risk and maximize profit by using a combination of trailing stops, take profit levels, and position sizing.
Overall, the NNFX trading system is designed to be a straightforward and easy-to-follow approach to Forex trading that can be applied by traders of all skill levels.
Core components of an NNFX algorithmic trading strategy
The NNFX algorithm is built on the principles of trend, momentum, and volatility. There are six core components in the NNFX trading algorithm:
1. Volatility - price volatility; e.g., Average True Range, True Range Double, Close-to-Close, etc.
2. Baseline - a moving average to identify price trend
3. Confirmation 1 - a technical indicator used to identify trends
4. Confirmation 2 - a technical indicator used to identify trends
5. Continuation - a technical indicator used to identify trends
6. Volatility/Volume - a technical indicator used to identify volatility/volume breakouts/breakdown
7. Exit - a technical indicator used to determine when a trend is exhausted
What is Volatility in the NNFX trading system?
In the NNFX (No Nonsense Forex) trading system, ATR (Average True Range) is typically used to measure the volatility of an asset. It is used as a part of the system to help determine the appropriate stop loss and take profit levels for a trade. ATR is calculated by taking the average of the true range values over a specified period.
True range is calculated as the maximum of the following values:
-Current high minus the current low
-Absolute value of the current high minus the previous close
-Absolute value of the current low minus the previous close
ATR is a dynamic indicator that changes with changes in volatility. As volatility increases, the value of ATR increases, and as volatility decreases, the value of ATR decreases. By using ATR in NNFX system, traders can adjust their stop loss and take profit levels according to the volatility of the asset being traded. This helps to ensure that the trade is given enough room to move, while also minimizing potential losses.
Other types of volatility include True Range Double (TRD), Close-to-Close, and Garman-Klass
What is a Baseline indicator?
The baseline is essentially a moving average, and is used to determine the overall direction of the market.
The baseline in the NNFX system is used to filter out trades that are not in line with the long-term trend of the market. The baseline is plotted on the chart along with other indicators, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR).
Trades are only taken when the price is in the same direction as the baseline. For example, if the baseline is sloping upwards, only long trades are taken, and if the baseline is sloping downwards, only short trades are taken. This approach helps to ensure that trades are in line with the overall trend of the market, and reduces the risk of entering trades that are likely to fail.
By using a baseline in the NNFX system, traders can have a clear reference point for determining the overall trend of the market, and can make more informed trading decisions. The baseline helps to filter out noise and false signals, and ensures that trades are taken in the direction of the long-term trend.
What is a Confirmation indicator?
Confirmation indicators are technical indicators that are used to confirm the signals generated by primary indicators. Primary indicators are the core indicators used in the NNFX system, such as the Average True Range (ATR), the Moving Average (MA), and the Relative Strength Index (RSI).
The purpose of the confirmation indicators is to reduce false signals and improve the accuracy of the trading system. They are designed to confirm the signals generated by the primary indicators by providing additional information about the strength and direction of the trend.
Some examples of confirmation indicators that may be used in the NNFX system include the Bollinger Bands, the MACD (Moving Average Convergence Divergence), and the MACD Oscillator. These indicators can provide information about the volatility, momentum, and trend strength of the market, and can be used to confirm the signals generated by the primary indicators.
In the NNFX system, confirmation indicators are used in combination with primary indicators and other filters to create a trading system that is robust and reliable. By using multiple indicators to confirm trading signals, the system aims to reduce the risk of false signals and improve the overall profitability of the trades.
What is a Continuation indicator?
In the NNFX (No Nonsense Forex) trading system, a continuation indicator is a technical indicator that is used to confirm a current trend and predict that the trend is likely to continue in the same direction. A continuation indicator is typically used in conjunction with other indicators in the system, such as a baseline indicator, to provide a comprehensive trading strategy.
What is a Volatility/Volume indicator?
Volume indicators, such as the On Balance Volume (OBV), the Chaikin Money Flow (CMF), or the Volume Price Trend (VPT), are used to measure the amount of buying and selling activity in a market. They are based on the trading volume of the market, and can provide information about the strength of the trend. In the NNFX system, volume indicators are used to confirm trading signals generated by the Moving Average and the Relative Strength Index. Volatility indicators include Average Direction Index, Waddah Attar, and Volatility Ratio. In the NNFX trading system, volatility is a proxy for volume and vice versa.
By using volume indicators as confirmation tools, the NNFX trading system aims to reduce the risk of false signals and improve the overall profitability of trades. These indicators can provide additional information about the market that is not captured by the primary indicators, and can help traders to make more informed trading decisions. In addition, volume indicators can be used to identify potential changes in market trends and to confirm the strength of price movements.
What is an Exit indicator?
The exit indicator is used in conjunction with other indicators in the system, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR), to provide a comprehensive trading strategy.
The exit indicator in the NNFX system can be any technical indicator that is deemed effective at identifying optimal exit points. Examples of exit indicators that are commonly used include the Parabolic SAR, the Average Directional Index (ADX), and the Chandelier Exit.
The purpose of the exit indicator is to identify when a trend is likely to reverse or when the market conditions have changed, signaling the need to exit a trade. By using an exit indicator, traders can manage their risk and prevent significant losses.
In the NNFX system, the exit indicator is used in conjunction with a stop loss and a take profit order to maximize profits and minimize losses. The stop loss order is used to limit the amount of loss that can be incurred if the trade goes against the trader, while the take profit order is used to lock in profits when the trade is moving in the trader's favor.
Overall, the use of an exit indicator in the NNFX trading system is an important component of a comprehensive trading strategy. It allows traders to manage their risk effectively and improve the profitability of their trades by exiting at the right time.
How does Loxx's GKD (Giga Kaleidoscope Modularized Trading System) implement the NNFX algorithm outlined above?
Loxx's GKD v1.0 system has five types of modules (indicators/strategies). These modules are:
1. GKD-BT - Backtesting module (Volatility, Number 1 in the NNFX algorithm)
2. GKD-B - Baseline module (Baseline and Volatility/Volume, Numbers 1 and 2 in the NNFX algorithm)
3. GKD-C - Confirmation 1/2 and Continuation module (Confirmation 1/2 and Continuation, Numbers 3, 4, and 5 in the NNFX algorithm)
4. GKD-V - Volatility/Volume module (Confirmation 1/2, Number 6 in the NNFX algorithm)
5. GKD-E - Exit module (Exit, Number 7 in the NNFX algorithm)
(additional module types will added in future releases)
Each module interacts with every module by passing data between modules. Data is passed between each module as described below:
GKD-B => GKD-V => GKD-C(1) => GKD-C(2) => GKD-C(Continuation) => GKD-E => GKD-BT
That is, the Baseline indicator passes its data to Volatility/Volume. The Volatility/Volume indicator passes its values to the Confirmation 1 indicator. The Confirmation 1 indicator passes its values to the Confirmation 2 indicator. The Confirmation 2 indicator passes its values to the Continuation indicator. The Continuation indicator passes its values to the Exit indicator, and finally, the Exit indicator passes its values to the Backtest strategy.
This chaining of indicators requires that each module conform to Loxx's GKD protocol, therefore allowing for the testing of every possible combination of technical indicators that make up the six components of the NNFX algorithm.
What does the application of the GKD trading system look like?
Example trading system:
Backtest: Strategy with 1-3 take profits, trailing stop loss, multiple types of PnL volatility, and 2 backtesting styles
Baseline: Hull Moving Average
Volatility/Volume: Hurst Exponent
Confirmation 1: Synthetic, Smoothed Variety RSI as shown on the chart above
Confirmation 2: Williams Percent Range
Continuation: Fisher Transform
Exit: Rex Oscillator
Each GKD indicator is denoted with a module identifier of either: GKD-BT, GKD-B, GKD-C, GKD-V, or GKD-E. This allows traders to understand to which module each indicator belongs and where each indicator fits into the GKD protocol chain.
Giga Kaleidoscope Modularized Trading System Signals (based on the NNFX algorithm)
Standard Entry
1. GKD-C Confirmation 1 Signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
6. GKD-C Confirmation 1 signal was less than 7 candles prior
Continuation Entry
1. Standard Entry, Baseline Entry, or Pullback; entry triggered previously
2. GKD-B Baseline hasn't crossed since entry signal trigger
3. GKD-C Confirmation Continuation Indicator signals
4. GKD-C Confirmation 1 agrees
5. GKD-B Baseline agrees
6. GKD-C Confirmation 2 agrees
1-Candle Rule Standard Entry
1. GKD-C Confirmation 1 signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
1-Candle Rule Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 1 signal was less than 7 candles prior
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees
PullBack Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is beyond 1.0x Volatility of Baseline
Next Candle:
1. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees
█ GKD-C Synthetic, Smoothed Variety RSI
This indicator contains 7 different types of RSI:
RSX
Regular
Slow
Rapid
Harris
Cuttler
Ehlers Smoothed
What is RSI?
RSI stands for Relative Strength Index . It is a technical indicator used to measure the strength or weakness of a financial instrument's price action.
The RSI is calculated based on the price movement of an asset over a specified period of time, typically 14 days, and is expressed on a scale of 0 to 100. The RSI is considered overbought when it is above 70 and oversold when it is below 30.
Traders and investors use the RSI to identify potential buy and sell signals. When the RSI indicates that an asset is oversold, it may be considered a buying opportunity, while an overbought RSI may signal that it is time to sell or take profits.
It's important to note that the RSI should not be used in isolation and should be used in conjunction with other technical and fundamental analysis tools to make informed trading decisions.
What is RSX?
Jurik RSX is a technical analysis indicator that is a variation of the Relative Strength Index Smoothed ( RSX ) indicator. It was developed by Mark Jurik and is designed to help traders identify trends and momentum in the market.
The Jurik RSX uses a combination of the RSX indicator and an adaptive moving average (AMA) to smooth out the price data and reduce the number of false signals. The adaptive moving average is designed to adjust the smoothing period based on the current market conditions, which makes the indicator more responsive to changes in price.
The Jurik RSX can be used to identify potential trend reversals and momentum shifts in the market. It oscillates between 0 and 100, with values above 50 indicating a bullish trend and values below 50 indicating a bearish trend . Traders can use these levels to make trading decisions, such as buying when the indicator crosses above 50 and selling when it crosses below 50.
The Jurik RSX is a more advanced version of the RSX indicator, and while it can be useful in identifying potential trade opportunities, it should not be used in isolation. It is best used in conjunction with other technical and fundamental analysis tools to make informed trading decisions.
What is Slow RSI?
Slow RSI is a variation of the traditional Relative Strength Index ( RSI ) indicator. It is a more smoothed version of the RSI and is designed to filter out some of the noise and short-term price fluctuations that can occur with the standard RSI .
The Slow RSI uses a longer period of time than the traditional RSI , typically 21 periods instead of 14. This longer period helps to smooth out the price data and makes the indicator less reactive to short-term price fluctuations.
Like the traditional RSI , the Slow RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Slow RSI is a more conservative version of the RSI and can be useful in identifying longer-term trends in the market. However, it can also be slower to respond to changes in price, which may result in missed trading opportunities. Traders may choose to use a combination of both the Slow RSI and the traditional RSI to make informed trading decisions.
What is Rapid RSI?
Same as regular RSI but with a faster calculation method
What is Harris RSI?
Harris RSI is a technical analysis indicator that is a variation of the Relative Strength Index ( RSI ). It was developed by Larry Harris and is designed to help traders identify potential trend changes and momentum shifts in the market.
The Harris RSI uses a different calculation formula compared to the traditional RSI . It takes into account both the opening and closing prices of a financial instrument, as well as the high and low prices. The Harris RSI is also normalized to a range of 0 to 100, with values above 50 indicating a bullish trend and values below 50 indicating a bearish trend .
Like the traditional RSI , the Harris RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Harris RSI is a more advanced version of the RSI and can be useful in identifying longer-term trends in the market. However, it can also generate more false signals than the standard RSI . Traders may choose to use a combination of both the Harris RSI and the traditional RSI to make informed trading decisions.
What is Cuttler RSI?
Cuttler RSI is a technical analysis indicator that is a variation of the Relative Strength Index ( RSI ). It was developed by Curt Cuttler and is designed to help traders identify potential trend changes and momentum shifts in the market.
The Cuttler RSI uses a different calculation formula compared to the traditional RSI . It takes into account the difference between the closing price of a financial instrument and the average of the high and low prices over a specified period of time. This difference is then normalized to a range of 0 to 100, with values above 50 indicating a bullish trend and values below 50 indicating a bearish trend .
Like the traditional RSI , the Cuttler RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Cuttler RSI is a more advanced version of the RSI and can be useful in identifying longer-term trends in the market. However, it can also generate more false signals than the standard RSI . Traders may choose to use a combination of both the Cuttler RSI and the traditional RSI to make informed trading decisions.
What is Ehlers Smoothed RSI?
Ehlers smoothed RSI is a technical analysis indicator that is a variation of the Relative Strength Index ( RSI ). It was developed by John Ehlers and is designed to help traders identify potential trend changes and momentum shifts in the market.
The Ehlers smoothed RSI uses a different calculation formula compared to the traditional RSI . It uses a smoothing algorithm that is designed to reduce the noise and random fluctuations that can occur with the standard RSI . The smoothing algorithm is based on a concept called "digital signal processing" and is intended to improve the accuracy of the indicator.
Like the traditional RSI , the Ehlers smoothed RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Ehlers smoothed RSI can be useful in identifying longer-term trends and momentum shifts in the market. However, it can also generate more false signals than the standard RSI . Traders may choose to use a combination of both the Ehlers smoothed RSI and the traditional RSI to make informed trading decisions.
What is Synthetic, Smoothed Variety RSI?
Synthetic, Smoothed Variety RSI is an RSI indicator that combines three RSI calculations into one to create a synthetic RSI output.
How this is done:
1. Three EMAs are created using different period inputs
2. Three RSIs are created using different period inputs and the EMA output from the first step
3. These three RSIs are averaged to create the Synthetic, Smoothed Variety RSI
This indicator includes both Ergodic and Middle crossing signals.
Requirements
Inputs
Confirmation 1 and Solo Confirmation: GKD-V Volatility / Volume indicator
Confirmation 2: GKD-C Confirmation indicator
Outputs
Confirmation 2 and Solo Confirmation Complex: GKD-E Exit indicator
Confirmation 1: GKD-C Confirmation indicator
Continuation: GKD-E Exit indicator
Solo Confirmation Simple: GKD-BT Backtest strategy
Additional features will be added in future releases.
GKD-C Variety RSI w/ Fibonacci Auto Channel [Loxx]Giga Kaleidoscope GKD-C Variety RSI w/ Fibonacci Auto Channel is a Confirmation module included in Loxx's "Giga Kaleidoscope Modularized Trading System".
█ Giga Kaleidoscope Modularized Trading System
What is Loxx's "Giga Kaleidoscope Modularized Trading System"?
The Giga Kaleidoscope Modularized Trading System is a trading system built on the philosophy of the NNFX (No Nonsense Forex) algorithmic trading.
What is the NNFX algorithmic trading strategy?
The NNFX (No-Nonsense Forex) trading system is a comprehensive approach to Forex trading that is designed to simplify the process and remove the confusion and complexity that often surrounds trading. The system was developed by a Forex trader who goes by the pseudonym "VP" and has gained a significant following in the Forex community.
The NNFX trading system is based on a set of rules and guidelines that help traders make objective and informed decisions. These rules cover all aspects of trading, including market analysis, trade entry, stop loss placement, and trade management.
Here are the main components of the NNFX trading system:
1. Trading Philosophy: The NNFX trading system is based on the idea that successful trading requires a comprehensive understanding of the market, objective analysis, and strict risk management. The system aims to remove subjective elements from trading and focuses on objective rules and guidelines.
2. Technical Analysis: The NNFX trading system relies heavily on technical analysis and uses a range of indicators to identify high-probability trading opportunities. The system uses a combination of trend-following and mean-reverting strategies to identify trades.
3. Market Structure: The NNFX trading system emphasizes the importance of understanding the market structure, including price action, support and resistance levels, and market cycles. The system uses a range of tools to identify the market structure, including trend lines, channels, and moving averages.
4. Trade Entry: The NNFX trading system has strict rules for trade entry. The system uses a combination of technical indicators to identify high-probability trades, and traders must meet specific criteria to enter a trade.
5. Stop Loss Placement: The NNFX trading system places a significant emphasis on risk management and requires traders to place a stop loss order on every trade. The system uses a combination of technical analysis and market structure to determine the appropriate stop loss level.
6. Trade Management: The NNFX trading system has specific rules for managing open trades. The system aims to minimize risk and maximize profit by using a combination of trailing stops, take profit levels, and position sizing.
Overall, the NNFX trading system is designed to be a straightforward and easy-to-follow approach to Forex trading that can be applied by traders of all skill levels.
Core components of an NNFX algorithmic trading strategy
The NNFX algorithm is built on the principles of trend, momentum, and volatility. There are six core components in the NNFX trading algorithm:
1. Volatility - price volatility; e.g., Average True Range, True Range Double, Close-to-Close, etc.
2. Baseline - a moving average to identify price trend
3. Confirmation 1 - a technical indicator used to identify trends
4. Confirmation 2 - a technical indicator used to identify trends
5. Continuation - a technical indicator used to identify trends
6. Volatility/Volume - a technical indicator used to identify volatility/volume breakouts/breakdown
7. Exit - a technical indicator used to determine when a trend is exhausted
What is Volatility in the NNFX trading system?
In the NNFX (No Nonsense Forex) trading system, ATR (Average True Range) is typically used to measure the volatility of an asset. It is used as a part of the system to help determine the appropriate stop loss and take profit levels for a trade. ATR is calculated by taking the average of the true range values over a specified period.
True range is calculated as the maximum of the following values:
-Current high minus the current low
-Absolute value of the current high minus the previous close
-Absolute value of the current low minus the previous close
ATR is a dynamic indicator that changes with changes in volatility. As volatility increases, the value of ATR increases, and as volatility decreases, the value of ATR decreases. By using ATR in NNFX system, traders can adjust their stop loss and take profit levels according to the volatility of the asset being traded. This helps to ensure that the trade is given enough room to move, while also minimizing potential losses.
Other types of volatility include True Range Double (TRD), Close-to-Close, and Garman-Klass
What is a Baseline indicator?
The baseline is essentially a moving average, and is used to determine the overall direction of the market.
The baseline in the NNFX system is used to filter out trades that are not in line with the long-term trend of the market. The baseline is plotted on the chart along with other indicators, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR).
Trades are only taken when the price is in the same direction as the baseline. For example, if the baseline is sloping upwards, only long trades are taken, and if the baseline is sloping downwards, only short trades are taken. This approach helps to ensure that trades are in line with the overall trend of the market, and reduces the risk of entering trades that are likely to fail.
By using a baseline in the NNFX system, traders can have a clear reference point for determining the overall trend of the market, and can make more informed trading decisions. The baseline helps to filter out noise and false signals, and ensures that trades are taken in the direction of the long-term trend.
What is a Confirmation indicator?
Confirmation indicators are technical indicators that are used to confirm the signals generated by primary indicators. Primary indicators are the core indicators used in the NNFX system, such as the Average True Range (ATR), the Moving Average (MA), and the Relative Strength Index (RSI).
The purpose of the confirmation indicators is to reduce false signals and improve the accuracy of the trading system. They are designed to confirm the signals generated by the primary indicators by providing additional information about the strength and direction of the trend.
Some examples of confirmation indicators that may be used in the NNFX system include the Bollinger Bands, the MACD (Moving Average Convergence Divergence), and the MACD Oscillator. These indicators can provide information about the volatility, momentum, and trend strength of the market, and can be used to confirm the signals generated by the primary indicators.
In the NNFX system, confirmation indicators are used in combination with primary indicators and other filters to create a trading system that is robust and reliable. By using multiple indicators to confirm trading signals, the system aims to reduce the risk of false signals and improve the overall profitability of the trades.
What is a Continuation indicator?
In the NNFX (No Nonsense Forex) trading system, a continuation indicator is a technical indicator that is used to confirm a current trend and predict that the trend is likely to continue in the same direction. A continuation indicator is typically used in conjunction with other indicators in the system, such as a baseline indicator, to provide a comprehensive trading strategy.
What is a Volatility/Volume indicator?
Volume indicators, such as the On Balance Volume (OBV), the Chaikin Money Flow (CMF), or the Volume Price Trend (VPT), are used to measure the amount of buying and selling activity in a market. They are based on the trading volume of the market, and can provide information about the strength of the trend. In the NNFX system, volume indicators are used to confirm trading signals generated by the Moving Average and the Relative Strength Index. Volatility indicators include Average Direction Index, Waddah Attar, and Volatility Ratio. In the NNFX trading system, volatility is a proxy for volume and vice versa.
By using volume indicators as confirmation tools, the NNFX trading system aims to reduce the risk of false signals and improve the overall profitability of trades. These indicators can provide additional information about the market that is not captured by the primary indicators, and can help traders to make more informed trading decisions. In addition, volume indicators can be used to identify potential changes in market trends and to confirm the strength of price movements.
What is an Exit indicator?
The exit indicator is used in conjunction with other indicators in the system, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR), to provide a comprehensive trading strategy.
The exit indicator in the NNFX system can be any technical indicator that is deemed effective at identifying optimal exit points. Examples of exit indicators that are commonly used include the Parabolic SAR, the Average Directional Index (ADX), and the Chandelier Exit.
The purpose of the exit indicator is to identify when a trend is likely to reverse or when the market conditions have changed, signaling the need to exit a trade. By using an exit indicator, traders can manage their risk and prevent significant losses.
In the NNFX system, the exit indicator is used in conjunction with a stop loss and a take profit order to maximize profits and minimize losses. The stop loss order is used to limit the amount of loss that can be incurred if the trade goes against the trader, while the take profit order is used to lock in profits when the trade is moving in the trader's favor.
Overall, the use of an exit indicator in the NNFX trading system is an important component of a comprehensive trading strategy. It allows traders to manage their risk effectively and improve the profitability of their trades by exiting at the right time.
How does Loxx's GKD (Giga Kaleidoscope Modularized Trading System) implement the NNFX algorithm outlined above?
Loxx's GKD v1.0 system has five types of modules (indicators/strategies). These modules are:
1. GKD-BT - Backtesting module (Volatility, Number 1 in the NNFX algorithm)
2. GKD-B - Baseline module (Baseline and Volatility/Volume, Numbers 1 and 2 in the NNFX algorithm)
3. GKD-C - Confirmation 1/2 and Continuation module (Confirmation 1/2 and Continuation, Numbers 3, 4, and 5 in the NNFX algorithm)
4. GKD-V - Volatility/Volume module (Confirmation 1/2, Number 6 in the NNFX algorithm)
5. GKD-E - Exit module (Exit, Number 7 in the NNFX algorithm)
(additional module types will added in future releases)
Each module interacts with every module by passing data between modules. Data is passed between each module as described below:
GKD-B => GKD-V => GKD-C(1) => GKD-C(2) => GKD-C(Continuation) => GKD-E => GKD-BT
That is, the Baseline indicator passes its data to Volatility/Volume. The Volatility/Volume indicator passes its values to the Confirmation 1 indicator. The Confirmation 1 indicator passes its values to the Confirmation 2 indicator. The Confirmation 2 indicator passes its values to the Continuation indicator. The Continuation indicator passes its values to the Exit indicator, and finally, the Exit indicator passes its values to the Backtest strategy.
This chaining of indicators requires that each module conform to Loxx's GKD protocol, therefore allowing for the testing of every possible combination of technical indicators that make up the six components of the NNFX algorithm.
What does the application of the GKD trading system look like?
Example trading system:
Backtest: Strategy with 1-3 take profits, trailing stop loss, multiple types of PnL volatility, and 2 backtesting styles
Baseline: Hull Moving Average
Volatility/Volume: Hurst Exponent
Confirmation 1: Variety RSI w/ Fibonacci Auto Channel as shown on the chart above
Confirmation 2: Williams Percent Range
Continuation: Fisher Transform
Exit: Rex Oscillator
Each GKD indicator is denoted with a module identifier of either: GKD-BT, GKD-B, GKD-C, GKD-V, or GKD-E. This allows traders to understand to which module each indicator belongs and where each indicator fits into the GKD protocol chain.
Giga Kaleidoscope Modularized Trading System Signals (based on the NNFX algorithm)
Standard Entry
1. GKD-C Confirmation 1 Signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
6. GKD-C Confirmation 1 signal was less than 7 candles prior
Continuation Entry
1. Standard Entry, Baseline Entry, or Pullback; entry triggered previously
2. GKD-B Baseline hasn't crossed since entry signal trigger
3. GKD-C Confirmation Continuation Indicator signals
4. GKD-C Confirmation 1 agrees
5. GKD-B Baseline agrees
6. GKD-C Confirmation 2 agrees
1-Candle Rule Standard Entry
1. GKD-C Confirmation 1 signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
1-Candle Rule Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 1 signal was less than 7 candles prior
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees
PullBack Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is beyond 1.0x Volatility of Baseline
Next Candle:
1. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees
█ GKD-C Variety RSI w/ Fibonacci Auto Channel
This indicator contains 7 different types of RSI:
RSX
Regular
Slow
Rapid
Harris
Cuttler
Ehlers Smoothed
What is RSI?
RSI stands for Relative Strength Index . It is a technical indicator used to measure the strength or weakness of a financial instrument's price action.
The RSI is calculated based on the price movement of an asset over a specified period of time, typically 14 days, and is expressed on a scale of 0 to 100. The RSI is considered overbought when it is above 70 and oversold when it is below 30.
Traders and investors use the RSI to identify potential buy and sell signals. When the RSI indicates that an asset is oversold, it may be considered a buying opportunity, while an overbought RSI may signal that it is time to sell or take profits.
It's important to note that the RSI should not be used in isolation and should be used in conjunction with other technical and fundamental analysis tools to make informed trading decisions.
What is RSX?
Jurik RSX is a technical analysis indicator that is a variation of the Relative Strength Index Smoothed ( RSX ) indicator. It was developed by Mark Jurik and is designed to help traders identify trends and momentum in the market.
The Jurik RSX uses a combination of the RSX indicator and an adaptive moving average (AMA) to smooth out the price data and reduce the number of false signals. The adaptive moving average is designed to adjust the smoothing period based on the current market conditions, which makes the indicator more responsive to changes in price.
The Jurik RSX can be used to identify potential trend reversals and momentum shifts in the market. It oscillates between 0 and 100, with values above 50 indicating a bullish trend and values below 50 indicating a bearish trend . Traders can use these levels to make trading decisions, such as buying when the indicator crosses above 50 and selling when it crosses below 50.
The Jurik RSX is a more advanced version of the RSX indicator, and while it can be useful in identifying potential trade opportunities, it should not be used in isolation. It is best used in conjunction with other technical and fundamental analysis tools to make informed trading decisions.
What is Slow RSI?
Slow RSI is a variation of the traditional Relative Strength Index ( RSI ) indicator. It is a more smoothed version of the RSI and is designed to filter out some of the noise and short-term price fluctuations that can occur with the standard RSI .
The Slow RSI uses a longer period of time than the traditional RSI , typically 21 periods instead of 14. This longer period helps to smooth out the price data and makes the indicator less reactive to short-term price fluctuations.
Like the traditional RSI , the Slow RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Slow RSI is a more conservative version of the RSI and can be useful in identifying longer-term trends in the market. However, it can also be slower to respond to changes in price, which may result in missed trading opportunities. Traders may choose to use a combination of both the Slow RSI and the traditional RSI to make informed trading decisions.
What is Rapid RSI?
Same as regular RSI but with a faster calculation method
What is Harris RSI?
Harris RSI is a technical analysis indicator that is a variation of the Relative Strength Index ( RSI ). It was developed by Larry Harris and is designed to help traders identify potential trend changes and momentum shifts in the market.
The Harris RSI uses a different calculation formula compared to the traditional RSI . It takes into account both the opening and closing prices of a financial instrument, as well as the high and low prices. The Harris RSI is also normalized to a range of 0 to 100, with values above 50 indicating a bullish trend and values below 50 indicating a bearish trend .
Like the traditional RSI , the Harris RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Harris RSI is a more advanced version of the RSI and can be useful in identifying longer-term trends in the market. However, it can also generate more false signals than the standard RSI . Traders may choose to use a combination of both the Harris RSI and the traditional RSI to make informed trading decisions.
What is Cuttler RSI?
Cuttler RSI is a technical analysis indicator that is a variation of the Relative Strength Index ( RSI ). It was developed by Curt Cuttler and is designed to help traders identify potential trend changes and momentum shifts in the market.
The Cuttler RSI uses a different calculation formula compared to the traditional RSI . It takes into account the difference between the closing price of a financial instrument and the average of the high and low prices over a specified period of time. This difference is then normalized to a range of 0 to 100, with values above 50 indicating a bullish trend and values below 50 indicating a bearish trend .
Like the traditional RSI , the Cuttler RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Cuttler RSI is a more advanced version of the RSI and can be useful in identifying longer-term trends in the market. However, it can also generate more false signals than the standard RSI . Traders may choose to use a combination of both the Cuttler RSI and the traditional RSI to make informed trading decisions.
What is Ehlers Smoothed RSI?
Ehlers smoothed RSI is a technical analysis indicator that is a variation of the Relative Strength Index ( RSI ). It was developed by John Ehlers and is designed to help traders identify potential trend changes and momentum shifts in the market.
The Ehlers smoothed RSI uses a different calculation formula compared to the traditional RSI . It uses a smoothing algorithm that is designed to reduce the noise and random fluctuations that can occur with the standard RSI . The smoothing algorithm is based on a concept called "digital signal processing" and is intended to improve the accuracy of the indicator.
Like the traditional RSI , the Ehlers smoothed RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Ehlers smoothed RSI can be useful in identifying longer-term trends and momentum shifts in the market. However, it can also generate more false signals than the standard RSI . Traders may choose to use a combination of both the Ehlers smoothed RSI and the traditional RSI to make informed trading decisions.
What is Variety RSI w/ Fibonacci Auto Channel?
This indicator injects a smoothed source price into the variety RSI calculation and then creates dynamic fibonacci levels to create trading signals.
Requirements
Inputs
Confirmation 1 and Solo Confirmation: GKD-V Volatility / Volume indicator
Confirmation 2: GKD-C Confirmation indicator
Outputs
Confirmation 2 and Solo Confirmation Complex: GKD-E Exit indicator
Confirmation 1: GKD-C Confirmation indicator
Continuation: GKD-E Exit indicator
Solo Confirmation Simple: GKD-BT Backtest strategy
Additional features will be added in future releases.
GKD-C Double-Smoothed Stochastic QQE [Loxx]Giga Kaleidoscope GKD-C Double-Smoothed Stochastic QQE is a Confirmation module included in Loxx's "Giga Kaleidoscope Modularized Trading System".
█ Giga Kaleidoscope Modularized Trading System
What is Loxx's "Giga Kaleidoscope Modularized Trading System"?
The Giga Kaleidoscope Modularized Trading System is a trading system built on the philosophy of the NNFX (No Nonsense Forex) algorithmic trading.
What is the NNFX algorithmic trading strategy?
The NNFX (No-Nonsense Forex) trading system is a comprehensive approach to Forex trading that is designed to simplify the process and remove the confusion and complexity that often surrounds trading. The system was developed by a Forex trader who goes by the pseudonym "VP" and has gained a significant following in the Forex community.
The NNFX trading system is based on a set of rules and guidelines that help traders make objective and informed decisions. These rules cover all aspects of trading, including market analysis, trade entry, stop loss placement, and trade management.
Here are the main components of the NNFX trading system:
1. Trading Philosophy: The NNFX trading system is based on the idea that successful trading requires a comprehensive understanding of the market, objective analysis, and strict risk management. The system aims to remove subjective elements from trading and focuses on objective rules and guidelines.
2. Technical Analysis: The NNFX trading system relies heavily on technical analysis and uses a range of indicators to identify high-probability trading opportunities. The system uses a combination of trend-following and mean-reverting strategies to identify trades.
3. Market Structure: The NNFX trading system emphasizes the importance of understanding the market structure, including price action, support and resistance levels, and market cycles. The system uses a range of tools to identify the market structure, including trend lines, channels, and moving averages.
4. Trade Entry: The NNFX trading system has strict rules for trade entry. The system uses a combination of technical indicators to identify high-probability trades, and traders must meet specific criteria to enter a trade.
5. Stop Loss Placement: The NNFX trading system places a significant emphasis on risk management and requires traders to place a stop loss order on every trade. The system uses a combination of technical analysis and market structure to determine the appropriate stop loss level.
6. Trade Management: The NNFX trading system has specific rules for managing open trades. The system aims to minimize risk and maximize profit by using a combination of trailing stops, take profit levels, and position sizing.
Overall, the NNFX trading system is designed to be a straightforward and easy-to-follow approach to Forex trading that can be applied by traders of all skill levels.
Core components of an NNFX algorithmic trading strategy
The NNFX algorithm is built on the principles of trend, momentum, and volatility. There are six core components in the NNFX trading algorithm:
1. Volatility - price volatility; e.g., Average True Range, True Range Double, Close-to-Close, etc.
2. Baseline - a moving average to identify price trend
3. Confirmation 1 - a technical indicator used to identify trends
4. Confirmation 2 - a technical indicator used to identify trends
5. Continuation - a technical indicator used to identify trends
6. Volatility/Volume - a technical indicator used to identify volatility/volume breakouts/breakdown
7. Exit - a technical indicator used to determine when a trend is exhausted
What is Volatility in the NNFX trading system?
In the NNFX (No Nonsense Forex) trading system, ATR (Average True Range) is typically used to measure the volatility of an asset. It is used as a part of the system to help determine the appropriate stop loss and take profit levels for a trade. ATR is calculated by taking the average of the true range values over a specified period.
True range is calculated as the maximum of the following values:
-Current high minus the current low
-Absolute value of the current high minus the previous close
-Absolute value of the current low minus the previous close
ATR is a dynamic indicator that changes with changes in volatility. As volatility increases, the value of ATR increases, and as volatility decreases, the value of ATR decreases. By using ATR in NNFX system, traders can adjust their stop loss and take profit levels according to the volatility of the asset being traded. This helps to ensure that the trade is given enough room to move, while also minimizing potential losses.
Other types of volatility include True Range Double (TRD), Close-to-Close, and Garman-Klass
What is a Baseline indicator?
The baseline is essentially a moving average, and is used to determine the overall direction of the market.
The baseline in the NNFX system is used to filter out trades that are not in line with the long-term trend of the market. The baseline is plotted on the chart along with other indicators, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR).
Trades are only taken when the price is in the same direction as the baseline. For example, if the baseline is sloping upwards, only long trades are taken, and if the baseline is sloping downwards, only short trades are taken. This approach helps to ensure that trades are in line with the overall trend of the market, and reduces the risk of entering trades that are likely to fail.
By using a baseline in the NNFX system, traders can have a clear reference point for determining the overall trend of the market, and can make more informed trading decisions. The baseline helps to filter out noise and false signals, and ensures that trades are taken in the direction of the long-term trend.
What is a Confirmation indicator?
Confirmation indicators are technical indicators that are used to confirm the signals generated by primary indicators. Primary indicators are the core indicators used in the NNFX system, such as the Average True Range (ATR), the Moving Average (MA), and the Relative Strength Index (RSI).
The purpose of the confirmation indicators is to reduce false signals and improve the accuracy of the trading system. They are designed to confirm the signals generated by the primary indicators by providing additional information about the strength and direction of the trend.
Some examples of confirmation indicators that may be used in the NNFX system include the Bollinger Bands, the MACD (Moving Average Convergence Divergence), and the MACD Oscillator. These indicators can provide information about the volatility, momentum, and trend strength of the market, and can be used to confirm the signals generated by the primary indicators.
In the NNFX system, confirmation indicators are used in combination with primary indicators and other filters to create a trading system that is robust and reliable. By using multiple indicators to confirm trading signals, the system aims to reduce the risk of false signals and improve the overall profitability of the trades.
What is a Continuation indicator?
In the NNFX (No Nonsense Forex) trading system, a continuation indicator is a technical indicator that is used to confirm a current trend and predict that the trend is likely to continue in the same direction. A continuation indicator is typically used in conjunction with other indicators in the system, such as a baseline indicator, to provide a comprehensive trading strategy.
What is a Volatility/Volume indicator?
Volume indicators, such as the On Balance Volume (OBV), the Chaikin Money Flow (CMF), or the Volume Price Trend (VPT), are used to measure the amount of buying and selling activity in a market. They are based on the trading volume of the market, and can provide information about the strength of the trend. In the NNFX system, volume indicators are used to confirm trading signals generated by the Moving Average and the Relative Strength Index. Volatility indicators include Average Direction Index, Waddah Attar, and Volatility Ratio. In the NNFX trading system, volatility is a proxy for volume and vice versa.
By using volume indicators as confirmation tools, the NNFX trading system aims to reduce the risk of false signals and improve the overall profitability of trades. These indicators can provide additional information about the market that is not captured by the primary indicators, and can help traders to make more informed trading decisions. In addition, volume indicators can be used to identify potential changes in market trends and to confirm the strength of price movements.
What is an Exit indicator?
The exit indicator is used in conjunction with other indicators in the system, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR), to provide a comprehensive trading strategy.
The exit indicator in the NNFX system can be any technical indicator that is deemed effective at identifying optimal exit points. Examples of exit indicators that are commonly used include the Parabolic SAR, the Average Directional Index (ADX), and the Chandelier Exit.
The purpose of the exit indicator is to identify when a trend is likely to reverse or when the market conditions have changed, signaling the need to exit a trade. By using an exit indicator, traders can manage their risk and prevent significant losses.
In the NNFX system, the exit indicator is used in conjunction with a stop loss and a take profit order to maximize profits and minimize losses. The stop loss order is used to limit the amount of loss that can be incurred if the trade goes against the trader, while the take profit order is used to lock in profits when the trade is moving in the trader's favor.
Overall, the use of an exit indicator in the NNFX trading system is an important component of a comprehensive trading strategy. It allows traders to manage their risk effectively and improve the profitability of their trades by exiting at the right time.
How does Loxx's GKD (Giga Kaleidoscope Modularized Trading System) implement the NNFX algorithm outlined above?
Loxx's GKD v1.0 system has five types of modules (indicators/strategies). These modules are:
1. GKD-BT - Backtesting module (Volatility, Number 1 in the NNFX algorithm)
2. GKD-B - Baseline module (Baseline and Volatility/Volume, Numbers 1 and 2 in the NNFX algorithm)
3. GKD-C - Confirmation 1/2 and Continuation module (Confirmation 1/2 and Continuation, Numbers 3, 4, and 5 in the NNFX algorithm)
4. GKD-V - Volatility/Volume module (Confirmation 1/2, Number 6 in the NNFX algorithm)
5. GKD-E - Exit module (Exit, Number 7 in the NNFX algorithm)
(additional module types will added in future releases)
Each module interacts with every module by passing data between modules. Data is passed between each module as described below:
GKD-B => GKD-V => GKD-C(1) => GKD-C(2) => GKD-C(Continuation) => GKD-E => GKD-BT
That is, the Baseline indicator passes its data to Volatility/Volume. The Volatility/Volume indicator passes its values to the Confirmation 1 indicator. The Confirmation 1 indicator passes its values to the Confirmation 2 indicator. The Confirmation 2 indicator passes its values to the Continuation indicator. The Continuation indicator passes its values to the Exit indicator, and finally, the Exit indicator passes its values to the Backtest strategy.
This chaining of indicators requires that each module conform to Loxx's GKD protocol, therefore allowing for the testing of every possible combination of technical indicators that make up the six components of the NNFX algorithm.
What does the application of the GKD trading system look like?
Example trading system:
Backtest: Strategy with 1-3 take profits, trailing stop loss, multiple types of PnL volatility, and 2 backtesting styles
Baseline: Hull Moving Average
Volatility/Volume: Hurst Exponent
Confirmation 1: Double-Smoothed Stochastic QQE as shown on the chart above
Confirmation 2: Williams Percent Range
Continuation: Fisher Transform
Exit: Rex Oscillator
Each GKD indicator is denoted with a module identifier of either: GKD-BT, GKD-B, GKD-C, GKD-V, or GKD-E. This allows traders to understand to which module each indicator belongs and where each indicator fits into the GKD protocol chain.
Giga Kaleidoscope Modularized Trading System Signals (based on the NNFX algorithm)
Standard Entry
1. GKD-C Confirmation 1 Signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
6. GKD-C Confirmation 1 signal was less than 7 candles prior
Continuation Entry
1. Standard Entry, Baseline Entry, or Pullback; entry triggered previously
2. GKD-B Baseline hasn't crossed since entry signal trigger
3. GKD-C Confirmation Continuation Indicator signals
4. GKD-C Confirmation 1 agrees
5. GKD-B Baseline agrees
6. GKD-C Confirmation 2 agrees
1-Candle Rule Standard Entry
1. GKD-C Confirmation 1 signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
1-Candle Rule Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 1 signal was less than 7 candles prior
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees
PullBack Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is beyond 1.0x Volatility of Baseline
Next Candle:
1. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees
█ GKD-C Double-Smoothed Stochastic QQE
What is the Double Smoothed Stochastic Oscillator (DSS)
The Double Smoothed Stochastic Oscillator (DSS) is a technical indicator used in financial analysis to measure the momentum of a security's price. It is an enhanced version of the traditional Stochastic Oscillator that reduces false signals and lag.
The traditional Stochastic Oscillator measures the position of a security's closing price relative to its price range over a specified period, usually 14 days. It calculates two lines, %K and %D, which oscillate between 0 and 100. When %K crosses above %D, it is considered a buy signal, and when %K crosses below %D, it is considered a sell signal.
The Double Smoothed Stochastic Oscillator adds an additional level of smoothing to the traditional Stochastic Oscillator by calculating two additional lines, DSS %K and DSS %D, using a double exponential moving average (DEMA) formula. The DEMA formula is a weighted moving average that gives more weight to recent data points than older data points.
The DSS %K line is calculated by taking a 3-period DEMA of the traditional Stochastic %K line, and the DSS %D line is calculated by taking a 3-period DEMA of the DSS %K line. The result is a smoother oscillator that responds more quickly to changes in price momentum.
Traders use the DSS to identify overbought and oversold conditions, as well as trend reversals. An overbought condition occurs when the oscillator is above 80, and an oversold condition occurs when the oscillator is below 20. Traders look for buy signals when the oscillator crosses above 20 from oversold conditions, and sell signals when the oscillator crosses below 80 from overbought conditions.
In summary, the Double Smoothed Stochastic Oscillator is an enhanced version of the traditional Stochastic Oscillator that reduces false signals and lag by adding an additional level of smoothing through the use of a double exponential moving average formula. It is used by traders to identify overbought and oversold conditions and trend reversals.
What is QQE?
Quantitative Qualitative Estimation (QQE) is a technical analysis indicator used to identify trends and trading opportunities in financial markets. It is based on a combination of two popular technical analysis indicators - the Relative Strength Index (RSI) and Moving Averages (MA).
The QQE indicator uses a smoothed RSI to determine the trend direction, and a moving average of the smoothed RSI to identify potential trend changes. The indicator then plots a series of bands above and below the moving average to indicate overbought and oversold conditions in the market.
The QQE indicator is designed to provide traders with a reliable signal that confirms the strength of a trend or indicates a possible trend reversal. It is particularly useful for traders who are looking to trade in markets that are trending strongly, but also want to identify when a trend is losing momentum or reversing.
Traders can use QQE in a number of different ways, including as a confirmation tool for other indicators or as a standalone indicator. For example, when used in conjunction with other technical analysis tools like support and resistance levels, the QQE indicator can help traders identify key entry and exit points for their trades.
One of the main advantages of the QQE indicator is that it is designed to be more reliable than other indicators that can generate false signals. By smoothing out the price action, the QQE indicator can provide traders with more accurate and reliable signals, which can help them make more profitable trading decisions.
In conclusion, QQE is a popular technical analysis indicator that traders use to identify trends and trading opportunities in financial markets. It combines the RSI and moving average indicators and is designed to provide traders with reliable signals that confirm the strength of a trend or indicate a possible trend reversal.
Requirements
Inputs
Confirmation 1 and Solo Confirmation: GKD-V Volatility / Volume indicator
Confirmation 2: GKD-C Confirmation indicator
Outputs
Confirmation 2 and Solo Confirmation Complex: GKD-E Exit indicator
Confirmation 1: GKD-C Confirmation indicator
Continuation: GKD-E Exit indicator
Solo Confirmation Simple: GKD-BT Backtest strategy
Additional features will be added in future releases.
GKD-C QQE of Parabolic-Weighted Velocity [Loxx]Giga Kaleidoscope GKD-C QQE of Parabolic-Weighted Velocity is a Confirmation module included in Loxx's "Giga Kaleidoscope Modularized Trading System".
█ Giga Kaleidoscope Modularized Trading System
What is Loxx's "Giga Kaleidoscope Modularized Trading System"?
The Giga Kaleidoscope Modularized Trading System is a trading system built on the philosophy of the NNFX (No Nonsense Forex) algorithmic trading.
What is the NNFX algorithmic trading strategy?
The NNFX (No-Nonsense Forex) trading system is a comprehensive approach to Forex trading that is designed to simplify the process and remove the confusion and complexity that often surrounds trading. The system was developed by a Forex trader who goes by the pseudonym "VP" and has gained a significant following in the Forex community.
The NNFX trading system is based on a set of rules and guidelines that help traders make objective and informed decisions. These rules cover all aspects of trading, including market analysis, trade entry, stop loss placement, and trade management.
Here are the main components of the NNFX trading system:
1. Trading Philosophy: The NNFX trading system is based on the idea that successful trading requires a comprehensive understanding of the market, objective analysis, and strict risk management. The system aims to remove subjective elements from trading and focuses on objective rules and guidelines.
2. Technical Analysis: The NNFX trading system relies heavily on technical analysis and uses a range of indicators to identify high-probability trading opportunities. The system uses a combination of trend-following and mean-reverting strategies to identify trades.
3. Market Structure: The NNFX trading system emphasizes the importance of understanding the market structure, including price action, support and resistance levels, and market cycles. The system uses a range of tools to identify the market structure, including trend lines, channels, and moving averages.
4. Trade Entry: The NNFX trading system has strict rules for trade entry. The system uses a combination of technical indicators to identify high-probability trades, and traders must meet specific criteria to enter a trade.
5. Stop Loss Placement: The NNFX trading system places a significant emphasis on risk management and requires traders to place a stop loss order on every trade. The system uses a combination of technical analysis and market structure to determine the appropriate stop loss level.
6. Trade Management: The NNFX trading system has specific rules for managing open trades. The system aims to minimize risk and maximize profit by using a combination of trailing stops, take profit levels, and position sizing.
Overall, the NNFX trading system is designed to be a straightforward and easy-to-follow approach to Forex trading that can be applied by traders of all skill levels.
Core components of an NNFX algorithmic trading strategy
The NNFX algorithm is built on the principles of trend, momentum, and volatility. There are six core components in the NNFX trading algorithm:
1. Volatility - price volatility; e.g., Average True Range, True Range Double, Close-to-Close, etc.
2. Baseline - a moving average to identify price trend
3. Confirmation 1 - a technical indicator used to identify trends
4. Confirmation 2 - a technical indicator used to identify trends
5. Continuation - a technical indicator used to identify trends
6. Volatility/Volume - a technical indicator used to identify volatility/volume breakouts/breakdown
7. Exit - a technical indicator used to determine when a trend is exhausted
What is Volatility in the NNFX trading system?
In the NNFX (No Nonsense Forex) trading system, ATR (Average True Range) is typically used to measure the volatility of an asset. It is used as a part of the system to help determine the appropriate stop loss and take profit levels for a trade. ATR is calculated by taking the average of the true range values over a specified period.
True range is calculated as the maximum of the following values:
-Current high minus the current low
-Absolute value of the current high minus the previous close
-Absolute value of the current low minus the previous close
ATR is a dynamic indicator that changes with changes in volatility. As volatility increases, the value of ATR increases, and as volatility decreases, the value of ATR decreases. By using ATR in NNFX system, traders can adjust their stop loss and take profit levels according to the volatility of the asset being traded. This helps to ensure that the trade is given enough room to move, while also minimizing potential losses.
Other types of volatility include True Range Double (TRD), Close-to-Close, and Garman-Klass
What is a Baseline indicator?
The baseline is essentially a moving average, and is used to determine the overall direction of the market.
The baseline in the NNFX system is used to filter out trades that are not in line with the long-term trend of the market. The baseline is plotted on the chart along with other indicators, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR).
Trades are only taken when the price is in the same direction as the baseline. For example, if the baseline is sloping upwards, only long trades are taken, and if the baseline is sloping downwards, only short trades are taken. This approach helps to ensure that trades are in line with the overall trend of the market, and reduces the risk of entering trades that are likely to fail.
By using a baseline in the NNFX system, traders can have a clear reference point for determining the overall trend of the market, and can make more informed trading decisions. The baseline helps to filter out noise and false signals, and ensures that trades are taken in the direction of the long-term trend.
What is a Confirmation indicator?
Confirmation indicators are technical indicators that are used to confirm the signals generated by primary indicators. Primary indicators are the core indicators used in the NNFX system, such as the Average True Range (ATR), the Moving Average (MA), and the Relative Strength Index (RSI).
The purpose of the confirmation indicators is to reduce false signals and improve the accuracy of the trading system. They are designed to confirm the signals generated by the primary indicators by providing additional information about the strength and direction of the trend.
Some examples of confirmation indicators that may be used in the NNFX system include the Bollinger Bands, the MACD (Moving Average Convergence Divergence), and the MACD Oscillator. These indicators can provide information about the volatility, momentum, and trend strength of the market, and can be used to confirm the signals generated by the primary indicators.
In the NNFX system, confirmation indicators are used in combination with primary indicators and other filters to create a trading system that is robust and reliable. By using multiple indicators to confirm trading signals, the system aims to reduce the risk of false signals and improve the overall profitability of the trades.
What is a Continuation indicator?
In the NNFX (No Nonsense Forex) trading system, a continuation indicator is a technical indicator that is used to confirm a current trend and predict that the trend is likely to continue in the same direction. A continuation indicator is typically used in conjunction with other indicators in the system, such as a baseline indicator, to provide a comprehensive trading strategy.
What is a Volatility/Volume indicator?
Volume indicators, such as the On Balance Volume (OBV), the Chaikin Money Flow (CMF), or the Volume Price Trend (VPT), are used to measure the amount of buying and selling activity in a market. They are based on the trading volume of the market, and can provide information about the strength of the trend. In the NNFX system, volume indicators are used to confirm trading signals generated by the Moving Average and the Relative Strength Index. Volatility indicators include Average Direction Index, Waddah Attar, and Volatility Ratio. In the NNFX trading system, volatility is a proxy for volume and vice versa.
By using volume indicators as confirmation tools, the NNFX trading system aims to reduce the risk of false signals and improve the overall profitability of trades. These indicators can provide additional information about the market that is not captured by the primary indicators, and can help traders to make more informed trading decisions. In addition, volume indicators can be used to identify potential changes in market trends and to confirm the strength of price movements.
What is an Exit indicator?
The exit indicator is used in conjunction with other indicators in the system, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR), to provide a comprehensive trading strategy.
The exit indicator in the NNFX system can be any technical indicator that is deemed effective at identifying optimal exit points. Examples of exit indicators that are commonly used include the Parabolic SAR, the Average Directional Index (ADX), and the Chandelier Exit.
The purpose of the exit indicator is to identify when a trend is likely to reverse or when the market conditions have changed, signaling the need to exit a trade. By using an exit indicator, traders can manage their risk and prevent significant losses.
In the NNFX system, the exit indicator is used in conjunction with a stop loss and a take profit order to maximize profits and minimize losses. The stop loss order is used to limit the amount of loss that can be incurred if the trade goes against the trader, while the take profit order is used to lock in profits when the trade is moving in the trader's favor.
Overall, the use of an exit indicator in the NNFX trading system is an important component of a comprehensive trading strategy. It allows traders to manage their risk effectively and improve the profitability of their trades by exiting at the right time.
How does Loxx's GKD (Giga Kaleidoscope Modularized Trading System) implement the NNFX algorithm outlined above?
Loxx's GKD v1.0 system has five types of modules (indicators/strategies). These modules are:
1. GKD-BT - Backtesting module (Volatility, Number 1 in the NNFX algorithm)
2. GKD-B - Baseline module (Baseline and Volatility/Volume, Numbers 1 and 2 in the NNFX algorithm)
3. GKD-C - Confirmation 1/2 and Continuation module (Confirmation 1/2 and Continuation, Numbers 3, 4, and 5 in the NNFX algorithm)
4. GKD-V - Volatility/Volume module (Confirmation 1/2, Number 6 in the NNFX algorithm)
5. GKD-E - Exit module (Exit, Number 7 in the NNFX algorithm)
(additional module types will added in future releases)
Each module interacts with every module by passing data between modules. Data is passed between each module as described below:
GKD-B => GKD-V => GKD-C(1) => GKD-C(2) => GKD-C(Continuation) => GKD-E => GKD-BT
That is, the Baseline indicator passes its data to Volatility/Volume. The Volatility/Volume indicator passes its values to the Confirmation 1 indicator. The Confirmation 1 indicator passes its values to the Confirmation 2 indicator. The Confirmation 2 indicator passes its values to the Continuation indicator. The Continuation indicator passes its values to the Exit indicator, and finally, the Exit indicator passes its values to the Backtest strategy.
This chaining of indicators requires that each module conform to Loxx's GKD protocol, therefore allowing for the testing of every possible combination of technical indicators that make up the six components of the NNFX algorithm.
What does the application of the GKD trading system look like?
Example trading system:
Backtest: Strategy with 1-3 take profits, trailing stop loss, multiple types of PnL volatility, and 2 backtesting styles
Baseline: Hull Moving Average
Volatility/Volume: Hurst Exponent
Confirmation 1: QQE of Parabolic-Weighted Velocity as shown on the chart above
Confirmation 2: Williams Percent Range
Continuation: Fisher Transform
Exit: Rex Oscillator
Each GKD indicator is denoted with a module identifier of either: GKD-BT, GKD-B, GKD-C, GKD-V, or GKD-E. This allows traders to understand to which module each indicator belongs and where each indicator fits into the GKD protocol chain.
Giga Kaleidoscope Modularized Trading System Signals (based on the NNFX algorithm)
Standard Entry
1. GKD-C Confirmation 1 Signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
6. GKD-C Confirmation 1 signal was less than 7 candles prior
Continuation Entry
1. Standard Entry, Baseline Entry, or Pullback; entry triggered previously
2. GKD-B Baseline hasn't crossed since entry signal trigger
3. GKD-C Confirmation Continuation Indicator signals
4. GKD-C Confirmation 1 agrees
5. GKD-B Baseline agrees
6. GKD-C Confirmation 2 agrees
1-Candle Rule Standard Entry
1. GKD-C Confirmation 1 signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
1-Candle Rule Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 1 signal was less than 7 candles prior
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees
PullBack Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is beyond 1.0x Volatility of Baseline
Next Candle:
1. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees
█ GKD-C QQE of Parabolic-Weighted Velocity
What is Parabolic-Weighted Velocity?
Parabolic-Weighted Velocity (PWV) is a mathematical model used in sports science to estimate the velocity of an athlete during a given movement or exercise. This model uses a parabolic weighting function to give more importance to the velocities achieved in the middle of the movement and less importance to the velocities achieved at the beginning and end of the movement.
PWV takes into account the acceleration and deceleration of an athlete during the movement, and uses this information to calculate an average velocity. The model assumes that the athlete moves at a constant velocity during the middle portion of the movement and that the velocity increases and decreases smoothly at the beginning and end of the movement.
The parabolic weighting function used in PWV is based on the principle of impulse momentum, which states that the change in momentum of an object is equal to the impulse applied to it. The impulse is calculated as the force applied to an object multiplied by the time during which the force is applied. By giving more weight to the velocities achieved during the middle of the movement, PWV takes into account the impulse generated during this period of the movement.
PWV is commonly used in sports science to measure the performance of athletes during activities such as sprinting, jumping, and throwing. It is often used in conjunction with other metrics such as power and force to provide a comprehensive picture of an athlete's performance. Additionally, PWV can be used to compare the performance of different athletes or to track an athlete's progress over time.
Overall, Parabolic-Weighted Velocity is a useful tool in sports science for estimating an athlete's velocity during a movement or exercise, taking into account the acceleration and deceleration of the athlete during the movement.
What is QQE?
Quantitative Qualitative Estimation (QQE) is a technical analysis indicator used to identify trends and trading opportunities in financial markets. It is based on a combination of two popular technical analysis indicators - the Relative Strength Index (RSI) and Moving Averages (MA).
The QQE indicator uses a smoothed RSI to determine the trend direction, and a moving average of the smoothed RSI to identify potential trend changes. The indicator then plots a series of bands above and below the moving average to indicate overbought and oversold conditions in the market.
The QQE indicator is designed to provide traders with a reliable signal that confirms the strength of a trend or indicates a possible trend reversal. It is particularly useful for traders who are looking to trade in markets that are trending strongly, but also want to identify when a trend is losing momentum or reversing.
Traders can use QQE in a number of different ways, including as a confirmation tool for other indicators or as a standalone indicator. For example, when used in conjunction with other technical analysis tools like support and resistance levels, the QQE indicator can help traders identify key entry and exit points for their trades.
One of the main advantages of the QQE indicator is that it is designed to be more reliable than other indicators that can generate false signals. By smoothing out the price action, the QQE indicator can provide traders with more accurate and reliable signals, which can help them make more profitable trading decisions.
In conclusion, QQE is a popular technical analysis indicator that traders use to identify trends and trading opportunities in financial markets. It combines the RSI and moving average indicators and is designed to provide traders with reliable signals that confirm the strength of a trend or indicate a possible trend reversal.
What is QQE of Parabolic-Weighted Velocity?
This version is using Parabolic Weighted Velocity and it can help in determining trend. Adjust the calculating period to your trading style: longer - to trend traders, shorter - for scalping.
Requirements
Inputs
Confirmation 1 and Solo Confirmation: GKD-V Volatility / Volume indicator
Confirmation 2: GKD-C Confirmation indicator
Outputs
Confirmation 2 and Solo Confirmation Complex: GKD-E Exit indicator
Confirmation 1: GKD-C Confirmation indicator
Continuation: GKD-E Exit indicator
Solo Confirmation Simple: GKD-BT Backtest strategy
Additional features will be added in future releases.
GKD-C Smoothed and Normalized Variety RSI [Loxx]Giga Kaleidoscope GKD-C Smoothed and Normalized Variety RSI is a Confirmation module included in Loxx's "Giga Kaleidoscope Modularized Trading System".
█ Giga Kaleidoscope Modularized Trading System
What is Loxx's "Giga Kaleidoscope Modularized Trading System"?
The Giga Kaleidoscope Modularized Trading System is a trading system built on the philosophy of the NNFX (No Nonsense Forex) algorithmic trading.
What is the NNFX algorithmic trading strategy?
The NNFX (No-Nonsense Forex) trading system is a comprehensive approach to Forex trading that is designed to simplify the process and remove the confusion and complexity that often surrounds trading. The system was developed by a Forex trader who goes by the pseudonym "VP" and has gained a significant following in the Forex community.
The NNFX trading system is based on a set of rules and guidelines that help traders make objective and informed decisions. These rules cover all aspects of trading, including market analysis, trade entry, stop loss placement, and trade management.
Here are the main components of the NNFX trading system:
1. Trading Philosophy: The NNFX trading system is based on the idea that successful trading requires a comprehensive understanding of the market, objective analysis, and strict risk management. The system aims to remove subjective elements from trading and focuses on objective rules and guidelines.
2. Technical Analysis: The NNFX trading system relies heavily on technical analysis and uses a range of indicators to identify high-probability trading opportunities. The system uses a combination of trend-following and mean-reverting strategies to identify trades.
3. Market Structure: The NNFX trading system emphasizes the importance of understanding the market structure, including price action, support and resistance levels, and market cycles. The system uses a range of tools to identify the market structure, including trend lines, channels, and moving averages.
4. Trade Entry: The NNFX trading system has strict rules for trade entry. The system uses a combination of technical indicators to identify high-probability trades, and traders must meet specific criteria to enter a trade.
5. Stop Loss Placement: The NNFX trading system places a significant emphasis on risk management and requires traders to place a stop loss order on every trade. The system uses a combination of technical analysis and market structure to determine the appropriate stop loss level.
6. Trade Management: The NNFX trading system has specific rules for managing open trades. The system aims to minimize risk and maximize profit by using a combination of trailing stops, take profit levels, and position sizing.
Overall, the NNFX trading system is designed to be a straightforward and easy-to-follow approach to Forex trading that can be applied by traders of all skill levels.
Core components of an NNFX algorithmic trading strategy
The NNFX algorithm is built on the principles of trend, momentum, and volatility. There are six core components in the NNFX trading algorithm:
1. Volatility - price volatility; e.g., Average True Range, True Range Double, Close-to-Close, etc.
2. Baseline - a moving average to identify price trend
3. Confirmation 1 - a technical indicator used to identify trends
4. Confirmation 2 - a technical indicator used to identify trends
5. Continuation - a technical indicator used to identify trends
6. Volatility/Volume - a technical indicator used to identify volatility/volume breakouts/breakdown
7. Exit - a technical indicator used to determine when a trend is exhausted
What is Volatility in the NNFX trading system?
In the NNFX (No Nonsense Forex) trading system, ATR (Average True Range) is typically used to measure the volatility of an asset. It is used as a part of the system to help determine the appropriate stop loss and take profit levels for a trade. ATR is calculated by taking the average of the true range values over a specified period.
True range is calculated as the maximum of the following values:
-Current high minus the current low
-Absolute value of the current high minus the previous close
-Absolute value of the current low minus the previous close
ATR is a dynamic indicator that changes with changes in volatility. As volatility increases, the value of ATR increases, and as volatility decreases, the value of ATR decreases. By using ATR in NNFX system, traders can adjust their stop loss and take profit levels according to the volatility of the asset being traded. This helps to ensure that the trade is given enough room to move, while also minimizing potential losses.
Other types of volatility include True Range Double (TRD), Close-to-Close, and Garman-Klass
What is a Baseline indicator?
The baseline is essentially a moving average, and is used to determine the overall direction of the market.
The baseline in the NNFX system is used to filter out trades that are not in line with the long-term trend of the market. The baseline is plotted on the chart along with other indicators, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR).
Trades are only taken when the price is in the same direction as the baseline. For example, if the baseline is sloping upwards, only long trades are taken, and if the baseline is sloping downwards, only short trades are taken. This approach helps to ensure that trades are in line with the overall trend of the market, and reduces the risk of entering trades that are likely to fail.
By using a baseline in the NNFX system, traders can have a clear reference point for determining the overall trend of the market, and can make more informed trading decisions. The baseline helps to filter out noise and false signals, and ensures that trades are taken in the direction of the long-term trend.
What is a Confirmation indicator?
Confirmation indicators are technical indicators that are used to confirm the signals generated by primary indicators. Primary indicators are the core indicators used in the NNFX system, such as the Average True Range (ATR), the Moving Average (MA), and the Relative Strength Index (RSI).
The purpose of the confirmation indicators is to reduce false signals and improve the accuracy of the trading system. They are designed to confirm the signals generated by the primary indicators by providing additional information about the strength and direction of the trend.
Some examples of confirmation indicators that may be used in the NNFX system include the Bollinger Bands, the MACD (Moving Average Convergence Divergence), and the Stochastic Oscillator. These indicators can provide information about the volatility, momentum, and trend strength of the market, and can be used to confirm the signals generated by the primary indicators.
In the NNFX system, confirmation indicators are used in combination with primary indicators and other filters to create a trading system that is robust and reliable. By using multiple indicators to confirm trading signals, the system aims to reduce the risk of false signals and improve the overall profitability of the trades.
What is a Continuation indicator?
In the NNFX (No Nonsense Forex) trading system, a continuation indicator is a technical indicator that is used to confirm a current trend and predict that the trend is likely to continue in the same direction. A continuation indicator is typically used in conjunction with other indicators in the system, such as a baseline indicator, to provide a comprehensive trading strategy.
What is a Volatility/Volume indicator?
Volume indicators, such as the On Balance Volume (OBV), the Chaikin Money Flow (CMF), or the Volume Price Trend (VPT), are used to measure the amount of buying and selling activity in a market. They are based on the trading volume of the market, and can provide information about the strength of the trend. In the NNFX system, volume indicators are used to confirm trading signals generated by the Moving Average and the Relative Strength Index. Volatility indicators include Average Direction Index, Waddah Attar, and Volatility Ratio. In the NNFX trading system, volatility is a proxy for volume and vice versa.
By using volume indicators as confirmation tools, the NNFX trading system aims to reduce the risk of false signals and improve the overall profitability of trades. These indicators can provide additional information about the market that is not captured by the primary indicators, and can help traders to make more informed trading decisions. In addition, volume indicators can be used to identify potential changes in market trends and to confirm the strength of price movements.
What is an Exit indicator?
The exit indicator is used in conjunction with other indicators in the system, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR), to provide a comprehensive trading strategy.
The exit indicator in the NNFX system can be any technical indicator that is deemed effective at identifying optimal exit points. Examples of exit indicators that are commonly used include the Parabolic SAR, the Average Directional Index (ADX), and the Chandelier Exit.
The purpose of the exit indicator is to identify when a trend is likely to reverse or when the market conditions have changed, signaling the need to exit a trade. By using an exit indicator, traders can manage their risk and prevent significant losses.
In the NNFX system, the exit indicator is used in conjunction with a stop loss and a take profit order to maximize profits and minimize losses. The stop loss order is used to limit the amount of loss that can be incurred if the trade goes against the trader, while the take profit order is used to lock in profits when the trade is moving in the trader's favor.
Overall, the use of an exit indicator in the NNFX trading system is an important component of a comprehensive trading strategy. It allows traders to manage their risk effectively and improve the profitability of their trades by exiting at the right time.
How does Loxx's GKD (Giga Kaleidoscope Modularized Trading System) implement the NNFX algorithm outlined above?
Loxx's GKD v1.0 system has five types of modules (indicators/strategies). These modules are:
1. GKD-BT - Backtesting module (Volatility, Number 1 in the NNFX algorithm)
2. GKD-B - Baseline module (Baseline and Volatility/Volume, Numbers 1 and 2 in the NNFX algorithm)
3. GKD-C - Confirmation 1/2 and Continuation module (Confirmation 1/2 and Continuation, Numbers 3, 4, and 5 in the NNFX algorithm)
4. GKD-V - Volatility/Volume module (Confirmation 1/2, Number 6 in the NNFX algorithm)
5. GKD-E - Exit module (Exit, Number 7 in the NNFX algorithm)
(additional module types will added in future releases)
Each module interacts with every module by passing data between modules. Data is passed between each module as described below:
GKD-B => GKD-V => GKD-C(1) => GKD-C(2) => GKD-C(Continuation) => GKD-E => GKD-BT
That is, the Baseline indicator passes its data to Volatility/Volume. The Volatility/Volume indicator passes its values to the Confirmation 1 indicator. The Confirmation 1 indicator passes its values to the Confirmation 2 indicator. The Confirmation 2 indicator passes its values to the Continuation indicator. The Continuation indicator passes its values to the Exit indicator, and finally, the Exit indicator passes its values to the Backtest strategy.
This chaining of indicators requires that each module conform to Loxx's GKD protocol, therefore allowing for the testing of every possible combination of technical indicators that make up the six components of the NNFX algorithm.
What does the application of the GKD trading system look like?
Example trading system:
Backtest: Strategy with 1-3 take profits, trailing stop loss, multiple types of PnL volatility, and 2 backtesting styles
Baseline: Hull Moving Average
Volatility/Volume: Hurst Exponent
Confirmation 1: Smoothed and Normalized Variety RSI as shown on the chart above
Confirmation 2: Williams Percent Range
Continuation: Fisher Transform
Exit: Rex Oscillator
Each GKD indicator is denoted with a module identifier of either: GKD-BT, GKD-B, GKD-C, GKD-V, or GKD-E. This allows traders to understand to which module each indicator belongs and where each indicator fits into the GKD protocol chain.
Giga Kaleidoscope Modularized Trading System Signals (based on the NNFX algorithm)
Standard Entry
1. GKD-C Confirmation 1 Signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
6. GKD-C Confirmation 1 signal was less than 7 candles prior
Continuation Entry
1. Standard Entry, Baseline Entry, or Pullback; entry triggered previously
2. GKD-B Baseline hasn't crossed since entry signal trigger
3. GKD-C Confirmation Continuation Indicator signals
4. GKD-C Confirmation 1 agrees
5. GKD-B Baseline agrees
6. GKD-C Confirmation 2 agrees
1-Candle Rule Standard Entry
1. GKD-C Confirmation 1 signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
1-Candle Rule Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 1 signal was less than 7 candles prior
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees
PullBack Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is beyond 1.0x Volatility of Baseline
Next Candle:
1. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees
█ GKD-C Smoothed and Normalized Variety RSI
This indicator contains 7 different types of RSI .
RSX
Regular
Slow
Rapid
Harris
Cuttler
Ehlers Smoothed
What is RSI?
RSI stands for Relative Strength Index . It is a technical indicator used to measure the strength or weakness of a financial instrument's price action.
The RSI is calculated based on the price movement of an asset over a specified period of time, typically 14 days, and is expressed on a scale of 0 to 100. The RSI is considered overbought when it is above 70 and oversold when it is below 30.
Traders and investors use the RSI to identify potential buy and sell signals. When the RSI indicates that an asset is oversold, it may be considered a buying opportunity, while an overbought RSI may signal that it is time to sell or take profits.
It's important to note that the RSI should not be used in isolation and should be used in conjunction with other technical and fundamental analysis tools to make informed trading decisions.
What is RSX?
Jurik RSX is a technical analysis indicator that is a variation of the Relative Strength Index Smoothed ( RSX ) indicator. It was developed by Mark Jurik and is designed to help traders identify trends and momentum in the market.
The Jurik RSX uses a combination of the RSX indicator and an adaptive moving average (AMA) to smooth out the price data and reduce the number of false signals. The adaptive moving average is designed to adjust the smoothing period based on the current market conditions, which makes the indicator more responsive to changes in price.
The Jurik RSX can be used to identify potential trend reversals and momentum shifts in the market. It oscillates between 0 and 100, with values above 50 indicating a bullish trend and values below 50 indicating a bearish trend . Traders can use these levels to make trading decisions, such as buying when the indicator crosses above 50 and selling when it crosses below 50.
The Jurik RSX is a more advanced version of the RSX indicator, and while it can be useful in identifying potential trade opportunities, it should not be used in isolation. It is best used in conjunction with other technical and fundamental analysis tools to make informed trading decisions.
What is Slow RSI?
Slow RSI is a variation of the traditional Relative Strength Index ( RSI ) indicator. It is a more smoothed version of the RSI and is designed to filter out some of the noise and short-term price fluctuations that can occur with the standard RSI .
The Slow RSI uses a longer period of time than the traditional RSI , typically 21 periods instead of 14. This longer period helps to smooth out the price data and makes the indicator less reactive to short-term price fluctuations.
Like the traditional RSI , the Slow RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Slow RSI is a more conservative version of the RSI and can be useful in identifying longer-term trends in the market. However, it can also be slower to respond to changes in price, which may result in missed trading opportunities. Traders may choose to use a combination of both the Slow RSI and the traditional RSI to make informed trading decisions.
What is Rapid RSI?
Same as regular RSI but with a faster calculation method
What is Harris RSI?
Harris RSI is a technical analysis indicator that is a variation of the Relative Strength Index ( RSI ). It was developed by Larry Harris and is designed to help traders identify potential trend changes and momentum shifts in the market.
The Harris RSI uses a different calculation formula compared to the traditional RSI . It takes into account both the opening and closing prices of a financial instrument, as well as the high and low prices. The Harris RSI is also normalized to a range of 0 to 100, with values above 50 indicating a bullish trend and values below 50 indicating a bearish trend .
Like the traditional RSI , the Harris RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Harris RSI is a more advanced version of the RSI and can be useful in identifying longer-term trends in the market. However, it can also generate more false signals than the standard RSI . Traders may choose to use a combination of both the Harris RSI and the traditional RSI to make informed trading decisions.
What is Cuttler RSI?
Cuttler RSI is a technical analysis indicator that is a variation of the Relative Strength Index ( RSI ). It was developed by Curt Cuttler and is designed to help traders identify potential trend changes and momentum shifts in the market.
The Cuttler RSI uses a different calculation formula compared to the traditional RSI . It takes into account the difference between the closing price of a financial instrument and the average of the high and low prices over a specified period of time. This difference is then normalized to a range of 0 to 100, with values above 50 indicating a bullish trend and values below 50 indicating a bearish trend .
Like the traditional RSI , the Cuttler RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Cuttler RSI is a more advanced version of the RSI and can be useful in identifying longer-term trends in the market. However, it can also generate more false signals than the standard RSI . Traders may choose to use a combination of both the Cuttler RSI and the traditional RSI to make informed trading decisions.
What is Ehlers Smoothed RSI?
Ehlers smoothed RSI is a technical analysis indicator that is a variation of the Relative Strength Index ( RSI ). It was developed by John Ehlers and is designed to help traders identify potential trend changes and momentum shifts in the market.
The Ehlers smoothed RSI uses a different calculation formula compared to the traditional RSI . It uses a smoothing algorithm that is designed to reduce the noise and random fluctuations that can occur with the standard RSI . The smoothing algorithm is based on a concept called "digital signal processing" and is intended to improve the accuracy of the indicator.
Like the traditional RSI , the Ehlers smoothed RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Ehlers smoothed RSI can be useful in identifying longer-term trends and momentum shifts in the market. However, it can also generate more false signals than the standard RSI . Traders may choose to use a combination of both the Ehlers smoothed RSI and the traditional RSI to make informed trading decisions.
What is Smoothed and Normalized Variety RSI?
Smoothed and Normalized Variety RSI is calculated by finding the RSI then smoothing that RSI output using a proprietary smoothing algorithm. This output is then normalized. This process produces a better quality RSI signal by reducing noise and better identifying reversal areas.
Requirements
Inputs
Confirmation 1 and Solo Confirmation: GKD-V Volatility / Volume indicator
Confirmation 2: GKD-C Confirmation indicator
Outputs
Confirmation 2 and Solo Confirmation Complex: GKD-E Exit indicator
Confirmation 1: GKD-C Confirmation indicator
Continuation: GKD-E Exit indicator
Solo Confirmation Simple: GKD-BT Backtest strategy
Additional features will be added in future releases.
GKD-C Aroon Oscillator of VHF-Adaptive Variety RSI [Loxx]Giga Kaleidoscope GKD-C Aroon Oscillator of VHF-Adaptive Variety RSI is a Confirmation module included in Loxx's "Giga Kaleidoscope Modularized Trading System".
█ Giga Kaleidoscope Modularized Trading System
What is Loxx's "Giga Kaleidoscope Modularized Trading System"?
The Giga Kaleidoscope Modularized Trading System is a trading system built on the philosophy of the NNFX (No Nonsense Forex) algorithmic trading.
What is the NNFX algorithmic trading strategy?
The NNFX (No-Nonsense Forex) trading system is a comprehensive approach to Forex trading that is designed to simplify the process and remove the confusion and complexity that often surrounds trading. The system was developed by a Forex trader who goes by the pseudonym "VP" and has gained a significant following in the Forex community.
The NNFX trading system is based on a set of rules and guidelines that help traders make objective and informed decisions. These rules cover all aspects of trading, including market analysis, trade entry, stop loss placement, and trade management.
Here are the main components of the NNFX trading system:
1. Trading Philosophy: The NNFX trading system is based on the idea that successful trading requires a comprehensive understanding of the market, objective analysis, and strict risk management. The system aims to remove subjective elements from trading and focuses on objective rules and guidelines.
2. Technical Analysis: The NNFX trading system relies heavily on technical analysis and uses a range of indicators to identify high-probability trading opportunities. The system uses a combination of trend-following and mean-reverting strategies to identify trades.
3. Market Structure: The NNFX trading system emphasizes the importance of understanding the market structure, including price action, support and resistance levels, and market cycles. The system uses a range of tools to identify the market structure, including trend lines, channels, and moving averages.
4. Trade Entry: The NNFX trading system has strict rules for trade entry. The system uses a combination of technical indicators to identify high-probability trades, and traders must meet specific criteria to enter a trade.
5. Stop Loss Placement: The NNFX trading system places a significant emphasis on risk management and requires traders to place a stop loss order on every trade. The system uses a combination of technical analysis and market structure to determine the appropriate stop loss level.
6. Trade Management: The NNFX trading system has specific rules for managing open trades. The system aims to minimize risk and maximize profit by using a combination of trailing stops, take profit levels, and position sizing.
Overall, the NNFX trading system is designed to be a straightforward and easy-to-follow approach to Forex trading that can be applied by traders of all skill levels.
Core components of an NNFX algorithmic trading strategy
The NNFX algorithm is built on the principles of trend, momentum, and volatility. There are six core components in the NNFX trading algorithm:
1. Volatility - price volatility; e.g., Average True Range, True Range Double, Close-to-Close, etc.
2. Baseline - a moving average to identify price trend
3. Confirmation 1 - a technical indicator used to identify trends
4. Confirmation 2 - a technical indicator used to identify trends
5. Continuation - a technical indicator used to identify trends
6. Volatility/Volume - a technical indicator used to identify volatility/volume breakouts/breakdown
7. Exit - a technical indicator used to determine when a trend is exhausted
What is Volatility in the NNFX trading system?
In the NNFX (No Nonsense Forex) trading system, ATR (Average True Range) is typically used to measure the volatility of an asset. It is used as a part of the system to help determine the appropriate stop loss and take profit levels for a trade. ATR is calculated by taking the average of the true range values over a specified period.
True range is calculated as the maximum of the following values:
-Current high minus the current low
-Absolute value of the current high minus the previous close
-Absolute value of the current low minus the previous close
ATR is a dynamic indicator that changes with changes in volatility. As volatility increases, the value of ATR increases, and as volatility decreases, the value of ATR decreases. By using ATR in NNFX system, traders can adjust their stop loss and take profit levels according to the volatility of the asset being traded. This helps to ensure that the trade is given enough room to move, while also minimizing potential losses.
Other types of volatility include True Range Double (TRD), Close-to-Close, and Garman-Klass
What is a Baseline indicator?
The baseline is essentially a moving average, and is used to determine the overall direction of the market.
The baseline in the NNFX system is used to filter out trades that are not in line with the long-term trend of the market. The baseline is plotted on the chart along with other indicators, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR).
Trades are only taken when the price is in the same direction as the baseline. For example, if the baseline is sloping upwards, only long trades are taken, and if the baseline is sloping downwards, only short trades are taken. This approach helps to ensure that trades are in line with the overall trend of the market, and reduces the risk of entering trades that are likely to fail.
By using a baseline in the NNFX system, traders can have a clear reference point for determining the overall trend of the market, and can make more informed trading decisions. The baseline helps to filter out noise and false signals, and ensures that trades are taken in the direction of the long-term trend.
What is a Confirmation indicator?
Confirmation indicators are technical indicators that are used to confirm the signals generated by primary indicators. Primary indicators are the core indicators used in the NNFX system, such as the Average True Range (ATR), the Moving Average (MA), and the Relative Strength Index (RSI).
The purpose of the confirmation indicators is to reduce false signals and improve the accuracy of the trading system. They are designed to confirm the signals generated by the primary indicators by providing additional information about the strength and direction of the trend.
Some examples of confirmation indicators that may be used in the NNFX system include the Bollinger Bands, the MACD (Moving Average Convergence Divergence), and the Stochastic Oscillator. These indicators can provide information about the volatility, momentum, and trend strength of the market, and can be used to confirm the signals generated by the primary indicators.
In the NNFX system, confirmation indicators are used in combination with primary indicators and other filters to create a trading system that is robust and reliable. By using multiple indicators to confirm trading signals, the system aims to reduce the risk of false signals and improve the overall profitability of the trades.
What is a Continuation indicator?
In the NNFX (No Nonsense Forex) trading system, a continuation indicator is a technical indicator that is used to confirm a current trend and predict that the trend is likely to continue in the same direction. A continuation indicator is typically used in conjunction with other indicators in the system, such as a baseline indicator, to provide a comprehensive trading strategy.
What is a Volatility/Volume indicator?
Volume indicators, such as the On Balance Volume (OBV), the Chaikin Money Flow (CMF), or the Volume Price Trend (VPT), are used to measure the amount of buying and selling activity in a market. They are based on the trading volume of the market, and can provide information about the strength of the trend. In the NNFX system, volume indicators are used to confirm trading signals generated by the Moving Average and the Relative Strength Index. Volatility indicators include Average Direction Index, Waddah Attar, and Volatility Ratio. In the NNFX trading system, volatility is a proxy for volume and vice versa.
By using volume indicators as confirmation tools, the NNFX trading system aims to reduce the risk of false signals and improve the overall profitability of trades. These indicators can provide additional information about the market that is not captured by the primary indicators, and can help traders to make more informed trading decisions. In addition, volume indicators can be used to identify potential changes in market trends and to confirm the strength of price movements.
What is an Exit indicator?
The exit indicator is used in conjunction with other indicators in the system, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR), to provide a comprehensive trading strategy.
The exit indicator in the NNFX system can be any technical indicator that is deemed effective at identifying optimal exit points. Examples of exit indicators that are commonly used include the Parabolic SAR, the Average Directional Index (ADX), and the Chandelier Exit.
The purpose of the exit indicator is to identify when a trend is likely to reverse or when the market conditions have changed, signaling the need to exit a trade. By using an exit indicator, traders can manage their risk and prevent significant losses.
In the NNFX system, the exit indicator is used in conjunction with a stop loss and a take profit order to maximize profits and minimize losses. The stop loss order is used to limit the amount of loss that can be incurred if the trade goes against the trader, while the take profit order is used to lock in profits when the trade is moving in the trader's favor.
Overall, the use of an exit indicator in the NNFX trading system is an important component of a comprehensive trading strategy. It allows traders to manage their risk effectively and improve the profitability of their trades by exiting at the right time.
How does Loxx's GKD (Giga Kaleidoscope Modularized Trading System) implement the NNFX algorithm outlined above?
Loxx's GKD v1.0 system has five types of modules (indicators/strategies). These modules are:
1. GKD-BT - Backtesting module (Volatility, Number 1 in the NNFX algorithm)
2. GKD-B - Baseline module (Baseline and Volatility/Volume, Numbers 1 and 2 in the NNFX algorithm)
3. GKD-C - Confirmation 1/2 and Continuation module (Confirmation 1/2 and Continuation, Numbers 3, 4, and 5 in the NNFX algorithm)
4. GKD-V - Volatility/Volume module (Confirmation 1/2, Number 6 in the NNFX algorithm)
5. GKD-E - Exit module (Exit, Number 7 in the NNFX algorithm)
(additional module types will added in future releases)
Each module interacts with every module by passing data between modules. Data is passed between each module as described below:
GKD-B => GKD-V => GKD-C(1) => GKD-C(2) => GKD-C(Continuation) => GKD-E => GKD-BT
That is, the Baseline indicator passes its data to Volatility/Volume. The Volatility/Volume indicator passes its values to the Confirmation 1 indicator. The Confirmation 1 indicator passes its values to the Confirmation 2 indicator. The Confirmation 2 indicator passes its values to the Continuation indicator. The Continuation indicator passes its values to the Exit indicator, and finally, the Exit indicator passes its values to the Backtest strategy.
This chaining of indicators requires that each module conform to Loxx's GKD protocol, therefore allowing for the testing of every possible combination of technical indicators that make up the six components of the NNFX algorithm.
What does the application of the GKD trading system look like?
Example trading system:
Backtest: Strategy with 1-3 take profits, trailing stop loss, multiple types of PnL volatility, and 2 backtesting styles
Baseline: Hull Moving Average
Volatility/Volume: Hurst Exponent
Confirmation 1: Aroon Oscillator of VHF-Adaptive Variety RSI as shown on the chart above
Confirmation 2: Williams Percent Range
Continuation: Fisher Transform
Exit: Rex Oscillator
Each GKD indicator is denoted with a module identifier of either: GKD-BT, GKD-B, GKD-C, GKD-V, or GKD-E. This allows traders to understand to which module each indicator belongs and where each indicator fits into the GKD protocol chain.
Giga Kaleidoscope Modularized Trading System Signals (based on the NNFX algorithm)
Standard Entry
1. GKD-C Confirmation 1 Signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
6. GKD-C Confirmation 1 signal was less than 7 candles prior
Continuation Entry
1. Standard Entry, Baseline Entry, or Pullback; entry triggered previously
2. GKD-B Baseline hasn't crossed since entry signal trigger
3. GKD-C Confirmation Continuation Indicator signals
4. GKD-C Confirmation 1 agrees
5. GKD-B Baseline agrees
6. GKD-C Confirmation 2 agrees
1-Candle Rule Standard Entry
1. GKD-C Confirmation 1 signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
1-Candle Rule Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 1 signal was less than 7 candles prior
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees
PullBack Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is beyond 1.0x Volatility of Baseline
Next Candle:
1. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees
█ GKD-C Aroon Oscillator of VHF-Adaptive Variety RSI
This indicator contains 7 different types of RSI.
RSX
Regular
Slow
Rapid
Harris
Cuttler
Ehlers Smoothed
What is RSI?
RSI stands for Relative Strength Index . It is a technical indicator used to measure the strength or weakness of a financial instrument's price action.
The RSI is calculated based on the price movement of an asset over a specified period of time, typically 14 days, and is expressed on a scale of 0 to 100. The RSI is considered overbought when it is above 70 and oversold when it is below 30.
Traders and investors use the RSI to identify potential buy and sell signals. When the RSI indicates that an asset is oversold, it may be considered a buying opportunity, while an overbought RSI may signal that it is time to sell or take profits.
It's important to note that the RSI should not be used in isolation and should be used in conjunction with other technical and fundamental analysis tools to make informed trading decisions.
What is RSX?
Jurik RSX is a technical analysis indicator that is a variation of the Relative Strength Index Smoothed ( RSX ) indicator. It was developed by Mark Jurik and is designed to help traders identify trends and momentum in the market.
The Jurik RSX uses a combination of the RSX indicator and an adaptive moving average (AMA) to smooth out the price data and reduce the number of false signals. The adaptive moving average is designed to adjust the smoothing period based on the current market conditions, which makes the indicator more responsive to changes in price.
The Jurik RSX can be used to identify potential trend reversals and momentum shifts in the market. It oscillates between 0 and 100, with values above 50 indicating a bullish trend and values below 50 indicating a bearish trend . Traders can use these levels to make trading decisions, such as buying when the indicator crosses above 50 and selling when it crosses below 50.
The Jurik RSX is a more advanced version of the RSX indicator, and while it can be useful in identifying potential trade opportunities, it should not be used in isolation. It is best used in conjunction with other technical and fundamental analysis tools to make informed trading decisions.
What is Slow RSI?
Slow RSI is a variation of the traditional Relative Strength Index ( RSI ) indicator. It is a more smoothed version of the RSI and is designed to filter out some of the noise and short-term price fluctuations that can occur with the standard RSI .
The Slow RSI uses a longer period of time than the traditional RSI , typically 21 periods instead of 14. This longer period helps to smooth out the price data and makes the indicator less reactive to short-term price fluctuations.
Like the traditional RSI , the Slow RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Slow RSI is a more conservative version of the RSI and can be useful in identifying longer-term trends in the market. However, it can also be slower to respond to changes in price, which may result in missed trading opportunities. Traders may choose to use a combination of both the Slow RSI and the traditional RSI to make informed trading decisions.
What is Rapid RSI?
Same as regular RSI but with a faster calculation method
What is Harris RSI?
Harris RSI is a technical analysis indicator that is a variation of the Relative Strength Index ( RSI ). It was developed by Larry Harris and is designed to help traders identify potential trend changes and momentum shifts in the market.
The Harris RSI uses a different calculation formula compared to the traditional RSI . It takes into account both the opening and closing prices of a financial instrument, as well as the high and low prices. The Harris RSI is also normalized to a range of 0 to 100, with values above 50 indicating a bullish trend and values below 50 indicating a bearish trend .
Like the traditional RSI , the Harris RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Harris RSI is a more advanced version of the RSI and can be useful in identifying longer-term trends in the market. However, it can also generate more false signals than the standard RSI . Traders may choose to use a combination of both the Harris RSI and the traditional RSI to make informed trading decisions.
What is Cuttler RSI?
Cuttler RSI is a technical analysis indicator that is a variation of the Relative Strength Index ( RSI ). It was developed by Curt Cuttler and is designed to help traders identify potential trend changes and momentum shifts in the market.
The Cuttler RSI uses a different calculation formula compared to the traditional RSI . It takes into account the difference between the closing price of a financial instrument and the average of the high and low prices over a specified period of time. This difference is then normalized to a range of 0 to 100, with values above 50 indicating a bullish trend and values below 50 indicating a bearish trend .
Like the traditional RSI , the Cuttler RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Cuttler RSI is a more advanced version of the RSI and can be useful in identifying longer-term trends in the market. However, it can also generate more false signals than the standard RSI . Traders may choose to use a combination of both the Cuttler RSI and the traditional RSI to make informed trading decisions.
What is Ehlers Smoothed RSI?
Ehlers smoothed RSI is a technical analysis indicator that is a variation of the Relative Strength Index ( RSI ). It was developed by John Ehlers and is designed to help traders identify potential trend changes and momentum shifts in the market.
The Ehlers smoothed RSI uses a different calculation formula compared to the traditional RSI . It uses a smoothing algorithm that is designed to reduce the noise and random fluctuations that can occur with the standard RSI. The smoothing algorithm is based on a concept called "digital signal processing" and is intended to improve the accuracy of the indicator.
Like the traditional RSI , the Ehlers smoothed RSI is used to identify potential overbought and oversold conditions in the market. It oscillates between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions. Traders often use these levels as potential buy and sell signals.
The Ehlers smoothed RSI can be useful in identifying longer-term trends and momentum shifts in the market. However, it can also generate more false signals than the standard RSI . Traders may choose to use a combination of both the Ehlers smoothed RSI and the traditional RSI to make informed trading decisions.
What is a Vertical Horizontal Filter?
The Vertical Horizontal Filter (VHF) is a technical indicator used in trading to identify whether a market is trending or in a sideways trading range. It was developed by Adam White, and is based on the concept that markets tend to exhibit more volatility when they are trending, and less volatility when they are in a sideways range.
The VHF is calculated by taking the ratio of the range of the high and low prices over a specified period to the total range of prices over the same period. The resulting ratio is then multiplied by 100 to create a percentage value.
If the VHF is above a certain threshold, typically 60, it is considered to be indicating a trending market. If it is below the threshold, it is indicating a sideways trading range.
Traders use the VHF to help identify market conditions and to adjust their trading strategies accordingly. In a trending market, traders may look for opportunities to enter or exit positions based on the direction of the trend, while in a sideways trading range, traders may look for opportunities to buy at the bottom of the range and sell at the top.
The VHF can also be used in conjunction with other technical indicators, such as moving averages or momentum indicators, to help confirm trading signals. For example, if the VHF is indicating a trending market and the moving average is also indicating a trend, this may provide a stronger signal to enter or exit a trade.
One potential limitation of the VHF is that it can be less effective in markets that are transitioning between trending and sideways trading ranges. During these periods, the VHF may not accurately reflect the current market conditions, and traders may need to use other indicators or methods to help identify the current trend.
In summary, the Vertical Horizontal Filter (VHF) is a technical indicator used in trading to identify whether a market is trending or in a sideways trading range. It is based on the concept that markets exhibit more volatility when they are trending, and less volatility when they are in a sideways range. Traders use the VHF to help identify market conditions and adjust their trading strategies accordingly.
What is the Aroon Indicator?
The Aroon indicator is a technical analysis tool used to identify trends and potential trend reversals in the price of an asset. It was developed by Tushar Chande in 1995 and is based on the idea that prices tend to reach new highs or lows before a trend reversal occurs.
The Aroon indicator consists of two lines, the Aroon Up line and the Aroon Down line. The Aroon Up line measures how long it has been since the highest high price occurred within a certain time period, while the Aroon Down line measures how long it has been since the lowest low price occurred within the same time period.
Both lines range between 0 and 100, with a higher value indicating a stronger trend. When the Aroon Up line is above the Aroon Down line, it suggests that the price is in an uptrend, while a lower Aroon Up line and higher Aroon Down line suggest a downtrend. When both lines are close to 50, it suggests that the price is in a sideways trading range.
Traders use the Aroon indicator to identify potential trend reversals. When the Aroon Up line crosses below the Aroon Down line, it suggests a potential change from an uptrend to a downtrend. Conversely, when the Aroon Down line crosses below the Aroon Up line, it suggests a potential change from a downtrend to an uptrend.
The Aroon indicator can also be used in conjunction with other technical indicators, such as moving averages or momentum indicators, to help confirm trading signals. For example, if the Aroon indicator is indicating a potential trend reversal and the moving average is also indicating a trend reversal, this may provide a stronger signal to enter or exit a trade.
One limitation of the Aroon indicator is that it may not be as effective in markets that are in a prolonged sideways trading range, as the indicator tends to perform best in trending markets. Additionally, the Aroon indicator is a lagging indicator, meaning that it may not be as effective at identifying trend reversals in real-time as other technical indicators.
In summary, the Aroon indicator is a technical analysis tool used to identify trends and potential trend reversals in the price of an asset. It consists of two lines, the Aroon Up line and the Aroon Down line, and is based on the idea that prices tend to reach new highs or lows before a trend reversal occurs. Traders use the Aroon indicator to identify potential trend reversals and adjust their trading strategies accordingly.
What is Aroon Oscillator of VHF-Adaptive Variety RSI?
This indicator adapts to a VHF filter output. This is done by calculating a period output from the VHF filter. This value is then used to calculate vaerity RSI. Finally, the RSI is transformed into an Aroon oscillator.These steps increase the accuracy of RSI and reduce noise in the output signals.
Requirements
Inputs
Confirmation 1 and Solo Confirmation: GKD-V Volatility / Volume indicator
Confirmation 2: GKD-C Confirmation indicator
Outputs
Confirmation 2 and Solo Confirmation Complex: GKD-E Exit indicator
Confirmation 1: GKD-C Confirmation indicator
Continuation: GKD-E Exit indicator
Solo Confirmation Simple: GKD-BT Backtest strategy
Additional features will be added in future releases.
GKD-C Fast Discrete Cosine Transform of Price [Loxx]Giga Kaleidoscope GKD-C Fast Discrete Cosine Transform of Price is a Confirmation module included in Loxx's "Giga Kaleidoscope Modularized Trading System".
█ Giga Kaleidoscope Modularized Trading System
What is Loxx's "Giga Kaleidoscope Modularized Trading System"?
The Giga Kaleidoscope Modularized Trading System is a trading system built on the philosophy of the NNFX (No Nonsense Forex) algorithmic trading.
What is the NNFX algorithmic trading strategy?
The NNFX (No-Nonsense Forex) trading system is a comprehensive approach to Forex trading that is designed to simplify the process and remove the confusion and complexity that often surrounds trading. The system was developed by a Forex trader who goes by the pseudonym "VP" and has gained a significant following in the Forex community.
The NNFX trading system is based on a set of rules and guidelines that help traders make objective and informed decisions. These rules cover all aspects of trading, including market analysis, trade entry, stop loss placement, and trade management.
Here are the main components of the NNFX trading system:
1. Trading Philosophy: The NNFX trading system is based on the idea that successful trading requires a comprehensive understanding of the market, objective analysis, and strict risk management. The system aims to remove subjective elements from trading and focuses on objective rules and guidelines.
2. Technical Analysis: The NNFX trading system relies heavily on technical analysis and uses a range of indicators to identify high-probability trading opportunities. The system uses a combination of trend-following and mean-reverting strategies to identify trades.
3. Market Structure: The NNFX trading system emphasizes the importance of understanding the market structure, including price action, support and resistance levels, and market cycles. The system uses a range of tools to identify the market structure, including trend lines, channels, and moving averages.
4. Trade Entry: The NNFX trading system has strict rules for trade entry. The system uses a combination of technical indicators to identify high-probability trades, and traders must meet specific criteria to enter a trade.
5. Stop Loss Placement: The NNFX trading system places a significant emphasis on risk management and requires traders to place a stop loss order on every trade. The system uses a combination of technical analysis and market structure to determine the appropriate stop loss level.
6. Trade Management: The NNFX trading system has specific rules for managing open trades. The system aims to minimize risk and maximize profit by using a combination of trailing stops, take profit levels, and position sizing.
Overall, the NNFX trading system is designed to be a straightforward and easy-to-follow approach to Forex trading that can be applied by traders of all skill levels.
Core components of an NNFX algorithmic trading strategy
The NNFX algorithm is built on the principles of trend, momentum, and volatility. There are six core components in the NNFX trading algorithm:
1. Volatility - price volatility; e.g., Average True Range, True Range Double, Close-to-Close, etc.
2. Baseline - a moving average to identify price trend
3. Confirmation 1 - a technical indicator used to identify trends
4. Confirmation 2 - a technical indicator used to identify trends
5. Continuation - a technical indicator used to identify trends
6. Volatility/Volume - a technical indicator used to identify volatility/volume breakouts/breakdown
7. Exit - a technical indicator used to determine when a trend is exhausted
What is Volatility in the NNFX trading system?
In the NNFX (No Nonsense Forex) trading system, ATR (Average True Range) is typically used to measure the volatility of an asset. It is used as a part of the system to help determine the appropriate stop loss and take profit levels for a trade. ATR is calculated by taking the average of the true range values over a specified period.
True range is calculated as the maximum of the following values:
-Current high minus the current low
-Absolute value of the current high minus the previous close
-Absolute value of the current low minus the previous close
ATR is a dynamic indicator that changes with changes in volatility. As volatility increases, the value of ATR increases, and as volatility decreases, the value of ATR decreases. By using ATR in NNFX system, traders can adjust their stop loss and take profit levels according to the volatility of the asset being traded. This helps to ensure that the trade is given enough room to move, while also minimizing potential losses.
Other types of volatility include True Range Double (TRD), Close-to-Close, and Garman-Klass
What is a Baseline indicator?
The baseline is essentially a moving average, and is used to determine the overall direction of the market.
The baseline in the NNFX system is used to filter out trades that are not in line with the long-term trend of the market. The baseline is plotted on the chart along with other indicators, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR).
Trades are only taken when the price is in the same direction as the baseline. For example, if the baseline is sloping upwards, only long trades are taken, and if the baseline is sloping downwards, only short trades are taken. This approach helps to ensure that trades are in line with the overall trend of the market, and reduces the risk of entering trades that are likely to fail.
By using a baseline in the NNFX system, traders can have a clear reference point for determining the overall trend of the market, and can make more informed trading decisions. The baseline helps to filter out noise and false signals, and ensures that trades are taken in the direction of the long-term trend.
What is a Confirmation indicator?
Confirmation indicators are technical indicators that are used to confirm the signals generated by primary indicators. Primary indicators are the core indicators used in the NNFX system, such as the Average True Range (ATR), the Moving Average (MA), and the Relative Strength Index (RSI).
The purpose of the confirmation indicators is to reduce false signals and improve the accuracy of the trading system. They are designed to confirm the signals generated by the primary indicators by providing additional information about the strength and direction of the trend.
Some examples of confirmation indicators that may be used in the NNFX system include the Bollinger Bands, the MACD (Moving Average Convergence Divergence), and the Stochastic Oscillator. These indicators can provide information about the volatility, momentum, and trend strength of the market, and can be used to confirm the signals generated by the primary indicators.
In the NNFX system, confirmation indicators are used in combination with primary indicators and other filters to create a trading system that is robust and reliable. By using multiple indicators to confirm trading signals, the system aims to reduce the risk of false signals and improve the overall profitability of the trades.
What is a Continuation indicator?
In the NNFX (No Nonsense Forex) trading system, a continuation indicator is a technical indicator that is used to confirm a current trend and predict that the trend is likely to continue in the same direction. A continuation indicator is typically used in conjunction with other indicators in the system, such as a baseline indicator, to provide a comprehensive trading strategy.
What is a Volatility/Volume indicator?
Volume indicators, such as the On Balance Volume (OBV), the Chaikin Money Flow (CMF), or the Volume Price Trend (VPT), are used to measure the amount of buying and selling activity in a market. They are based on the trading volume of the market, and can provide information about the strength of the trend. In the NNFX system, volume indicators are used to confirm trading signals generated by the Moving Average and the Relative Strength Index. Volatility indicators include Average Direction Index, Waddah Attar, and Volatility Ratio. In the NNFX trading system, volatility is a proxy for volume and vice versa.
By using volume indicators as confirmation tools, the NNFX trading system aims to reduce the risk of false signals and improve the overall profitability of trades. These indicators can provide additional information about the market that is not captured by the primary indicators, and can help traders to make more informed trading decisions. In addition, volume indicators can be used to identify potential changes in market trends and to confirm the strength of price movements.
What is an Exit indicator?
The exit indicator is used in conjunction with other indicators in the system, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR), to provide a comprehensive trading strategy.
The exit indicator in the NNFX system can be any technical indicator that is deemed effective at identifying optimal exit points. Examples of exit indicators that are commonly used include the Parabolic SAR, the Average Directional Index (ADX), and the Chandelier Exit.
The purpose of the exit indicator is to identify when a trend is likely to reverse or when the market conditions have changed, signaling the need to exit a trade. By using an exit indicator, traders can manage their risk and prevent significant losses.
In the NNFX system, the exit indicator is used in conjunction with a stop loss and a take profit order to maximize profits and minimize losses. The stop loss order is used to limit the amount of loss that can be incurred if the trade goes against the trader, while the take profit order is used to lock in profits when the trade is moving in the trader's favor.
Overall, the use of an exit indicator in the NNFX trading system is an important component of a comprehensive trading strategy. It allows traders to manage their risk effectively and improve the profitability of their trades by exiting at the right time.
How does Loxx's GKD (Giga Kaleidoscope Modularized Trading System) implement the NNFX algorithm outlined above?
Loxx's GKD v1.0 system has five types of modules (indicators/strategies). These modules are:
1. GKD-BT - Backtesting module (Volatility, Number 1 in the NNFX algorithm)
2. GKD-B - Baseline module (Baseline and Volatility/Volume, Numbers 1 and 2 in the NNFX algorithm)
3. GKD-C - Confirmation 1/2 and Continuation module (Confirmation 1/2 and Continuation, Numbers 3, 4, and 5 in the NNFX algorithm)
4. GKD-V - Volatility/Volume module (Confirmation 1/2, Number 6 in the NNFX algorithm)
5. GKD-E - Exit module (Exit, Number 7 in the NNFX algorithm)
(additional module types will added in future releases)
Each module interacts with every module by passing data between modules. Data is passed between each module as described below:
GKD-B => GKD-V => GKD-C(1) => GKD-C(2) => GKD-C(Continuation) => GKD-E => GKD-BT
That is, the Baseline indicator passes its data to Volatility/Volume. The Volatility/Volume indicator passes its values to the Confirmation 1 indicator. The Confirmation 1 indicator passes its values to the Confirmation 2 indicator. The Confirmation 2 indicator passes its values to the Continuation indicator. The Continuation indicator passes its values to the Exit indicator, and finally, the Exit indicator passes its values to the Backtest strategy.
This chaining of indicators requires that each module conform to Loxx's GKD protocol, therefore allowing for the testing of every possible combination of technical indicators that make up the six components of the NNFX algorithm.
What does the application of the GKD trading system look like?
Example trading system:
Backtest: Strategy with 1-3 take profits, trailing stop loss, multiple types of PnL volatility, and 2 backtesting styles
Baseline: Hull Moving Average
Volatility/Volume: Hurst Exponent
Confirmation 1: Fast Discrete Cosine Transform of Price as shown on the chart above
Confirmation 2: Williams Percent Range
Continuation: Fisher Transform
Exit: Rex Oscillator
Each GKD indicator is denoted with a module identifier of either: GKD-BT, GKD-B, GKD-C, GKD-V, or GKD-E. This allows traders to understand to which module each indicator belongs and where each indicator fits into the GKD protocol chain.
Giga Kaleidoscope Modularized Trading System Signals (based on the NNFX algorithm)
Standard Entry
1. GKD-C Confirmation 1 Signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
6. GKD-C Confirmation 1 signal was less than 7 candles prior
Continuation Entry
1. Standard Entry, Baseline Entry, or Pullback; entry triggered previously
2. GKD-B Baseline hasn't crossed since entry signal trigger
3. GKD-C Confirmation Continuation Indicator signals
4. GKD-C Confirmation 1 agrees
5. GKD-B Baseline agrees
6. GKD-C Confirmation 2 agrees
1-Candle Rule Standard Entry
1. GKD-C Confirmation 1 signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
1-Candle Rule Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 1 signal was less than 7 candles prior
Next Candle:
1. Price retraced (Long: close < close or Short: close > close )
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees
PullBack Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is beyond 1.0x Volatility of Baseline
Next Candle:
1. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees
█ GKD-C Fast Discrete Cosine Transform of Price
What is Fast Discrete Cosine Transform?
What is the Fast Discrete Cosine Transform?
Algolib is a C++ library for algorithmic trading that provides various algorithms for processing and analyzing financial data. The library includes a Fast Discrete Cosine Transform (FDCT) implementation, which is a fast version of the Discrete Cosine Transform (DCT) algorithm used for signal processing and data compression.
The FDCT implementation in Algolib is based on the FFT (Fast Fourier Transform) algorithm, which is a widely used method for computing the DCT. The implementation is optimized for performance and can handle large datasets efficiently. It uses the standard divide-and-conquer approach to compute the DCT recursively and combines the resulting coefficients to obtain the final DCT of the input signal.
The input to the FDCT algorithm in Algolib is a one-dimensional array of real numbers, which represents a time series or a financial signal. The algorithm then computes the DCT of the input sequence and returns a one-dimensional array of DCT coefficients, which represent the frequency components of the signal.
The implementation of the FDCT algorithm in Algolib uses C++ templates to provide a generic implementation that can work with different data types. It also includes various optimizations, such as loop unrolling, to improve the performance of the algorithm.
The steps involved in the FDCT algorithm in Algolib are:
-Divide the input sequence into even and odd parts.
-Compute the DCT of the even and odd parts recursively.
-Combine the DCT coefficients of the even and odd parts to obtain the final DCT coefficients.
-The implementation of the FDCT algorithm in Algolib uses the FFTW (Fastest Fourier Transform in the West) library to perform the FFT computations, which is a highly optimized library for computing Fourier transforms.
In summary, the Fast Discrete Cosine Transform implementation in Algolib is a fast and efficient implementation of the DCT algorithm, which is used for processing financial signals and time series data. The implementation is optimized for performance and uses the FFT algorithm for fast computation. The implementation is generic and can work with different data types, and includes optimizations such as loop unrolling to improve the performance of the algorithm.
What is the Fast Discrete Cosine Transform in terms of Forex trading?
The Fast Discrete Cosine Transform (FDCT) is an algorithm used for signal processing and data compression that can also be applied in trading forex. The FDCT is used to transform financial data into a set of coefficients that represent the data in terms of cosine functions of different frequencies. These coefficients can be used to analyze the frequency components of financial signals and to develop trading strategies based on these components.
In trading forex, the FDCT can be applied to various financial signals, such as price data, volume data, and technical indicators. By applying the FDCT to these signals, traders can identify the dominant frequency components of the signals and use this information to develop trading strategies.
For example, traders can use the FDCT to identify cycles in the market and use this information to develop trend-following strategies. The FDCT can also be used to identify short-term fluctuations in the market and develop mean-reversion strategies based on these fluctuations.
The FDCT can also be used in combination with other technical analysis tools, such as moving averages, to improve the accuracy of trading signals. For example, traders can apply the FDCT to the moving average of a financial signal to identify the dominant frequency components of the moving average and use this information to develop trading signals.
The FDCT can also be used in conjunction with machine learning algorithms to develop predictive models for financial markets. By applying the FDCT to financial data and using the resulting coefficients as inputs to a machine learning algorithm, traders can develop models that predict future price movements and identify profitable trading opportunities.
In summary, the FDCT can be applied in trading forex to analyze the frequency components of financial signals and develop trading strategies based on these components. The FDCT can be used in conjunction with other technical analysis tools and machine learning algorithms to improve the accuracy of trading signals and develop predictive models for financial markets.
This indicator has period lengths that are powers of powers of 2. There is also a features to increase the resolution of the FDCT.
Requirements
Inputs
Confirmation 1 and Solo Confirmation: GKD-V Volatility / Volume indicator
Confirmation 2: GKD-C Confirmation indicator
Outputs
Confirmation 2 and Solo Confirmation Complex: GKD-E Exit indicator
Confirmation 1: GKD-C Confirmation indicator
Continuation: GKD-E Exit indicator
Solo Confirmation Simple: GKD-BT Backtest strategy
Additional features will be added in future releases.
Red and Green Ignored Bar by Oliver VelezOn this occasion I present a script that detects Ignored Red Candles and Ignored Green Candles, basically it is a Price Action event that indicates a possible continuation of the current trend and gives the opportunity to climb it with a Very tight risk, before delving into detail I would like to leave this note:
Note: the detection of this event does not guarantee that the signal will be good, the trader must have the ability to determine its quality based on aspects such as trend, maturity, support / resistance levels, expansion / contraction of the market, risk / benefit, etc, if you do not have knowledge about this you should not use this indicator since using it without a robust trading plan and experience could cause you to partially or totally lose your money, if this is your case you should train before If you try to extract money from the market, this script was created to be another tool in your trading plan in order to configure the rules at your discretion, execute them consistently and have AUTOMATIC ALERTS when the event occurs, which is where I find more value because you can have many instruments waiting for the event to be generated, in the time frame you want and without having to observe the mer When the alert is generated, the Trader should evaluate the quality of the alert and define whether or not to execute it (higher timeframes, they can give you more time to execute the operation correctly).
Let's continue….
This event was created by Oliver Velez recognized trader / mentor of price action, the event has a very interesting particularity since it allows to take a position with a very limited risk in trend movements, this achieves favorable operations of good ratio and small losses when taking An adjusted risk, if the trade works, a good ratio is quickly achieved and we agree with a key point in the “Keep small losses and big profits” trading, this makes it easier to have a positive mathematical hope when your level of Success is not very high, so leave you in the field of profitability.
THE EVENT:
The event has a bullish configuration (Ignored Red Candle) and a bearish configuration (Ignored Green Candle), below I detail the “Hard” rules (later I explain why “Hard”):
1- Last 3 bars have to be GREEN-RED-GREEN (possible bullish configuration) or RED-GREEN-RED (possible bearish configuration), the first bar is called Control Bar, the second is called Ignored Bar and the third Signal Bar as shown in the following image:
2- Be in a trend determined by simple moving averages (Slow of 20 periods and Fast of 8 periods), as a general rule you can take the direction of MA20 but the Trader has to determine if there is a trend movement or not.
3- Control bar of good range, little tail and with a body greater than 55%.
4- Ignored bar preferably narrow range, little tail and that is located in the upper 1/3 of the control bar.
5- Signal bar cannot override the minimum of the ignored bar.
6- Activation / Confirmation of event by means of signal bar in overcoming the body of the ignored bar.
Some examples of ignored bars (with “Hard” and “Flexible” rules):
Features and configuration of the indicator:
To access the indicator settings, press the wheel next to the indicator name VVI_VRI "Configuration options".
- Operation mode (Filtering Type):
• Filtering Complete: all filters activated according to the configuration below.
• Without Filtering: all filters deactivated, all VRI / VVI are displayed without any selection criteria.
• Trend Filter only: shows only VRI / VVI that are in accordance with what is set in “Trend Settings”
- Configuration Moving Averages:
• See Slow Media: slow moving average display with direction detection and color change.
• See Fast Media: display of fast moving average with direction detection and color change.
• Type: possibility to choose the type of media: DEMA, EMA, HullMA, SMA, SSMA, SSMA, TEMA, TMA, VWMA, WMA, ZEMA)
• Period: number of previous bars.
• Source: possibility to choose the type of source, open, close, high, low, hl2 hlc3, ohlc4.
• Reaction: this configuration affects the color change before a change of direction, 1 being an immediate reaction and higher values, a more delayed reaction obtaining les false "changes of direction", a value of 3 filters the direction quite well.
- Trend Configuration
• Uptrend Condition P / VRI: possibility to select any of these conditions:
o Bullish MA direction
o Quick bullish MA direction
o Slow and fast bullish MA direction
o Price higher than slow MA
o Price higher than fast MA
o Price higher than slow and fast MA
o Price higher than slow MA and bullish direction
o Price higher than fast MA and bullish direction
o Price higher than slow, fast MA and bullish direction
o No condition
• Condition P / VVI bear trend: possibility of selecting any of these conditions:
o Slow bearish MA direction
o Fast bearish MA direction
o Slow and fast bearish MA direction
o Price less than slow MA
o Price less than fast MA
o Price less than slow and fast MA
o Price lower than slow MA and bearish direction
o Price less than fast MA and bearish direction
o Price less than slow, fast MA and bearish direction
o No condition
- Control bar configuration
• Minimum body percentage%: possibility to select what body percentage the bar must have.
• Paint control bar: when selected, paint the control bar.
• See control bar label: when selected, a label with the legend BC is plotted.
- Configuration bar ignored
• Above X% of the control bar: possibility to select above what percentage of the control bar the ignored bar must be located.
• Paint ignored bar: when selected, paint the ignored bar.
- Signal bar configuration
• You cannot override the minimum of the ignored bar: when selected, the condition is added that the signal bar cannot override the minimum of the ignored bar.
• Paint signal bar: when selected, paint the signal bar.
• See arrow: when selected it shows the direction arrow of the possible movement.
• See bear and arrow: when selected it shows bear and arrow label
• See bull and arrow: when selected it shows bull and arrow label
The following image shows the ignored bar and painted signal:
- Take profit / loss
The profit / loss taking varies depending on the trader and its risk / monetary plan, the proposal is a recommendation based on the nature of the event that is to have a small risk unit (stop below the minimum of the ignored bar), look for objectives in ratios greater than 2: 1 and eliminate the risk in 1: 1 by taking the stop to BE, all parameters are configurable and are the following:
• See recommended stop loss and take profit: trace the levels of Stop, BE, TP1 and TP2, as well as their prices to know them quickly based on the assumed risk
• To: select which event you want to draw the SL and TP (VRI, VVI)
• Extend stop loss line x bars: allows extending the stop line by x number of bars
• Extend take profit line x bars: allows extending the stop line by x number of bars
• Ratio to move to break even: allows you to select the minimum ratio to move stop to break even (default 1: 1)
• Take profit 1 ratio: allows you to select the ratio for take profit 1 (default 2: 1)
• Take profit 2 ratio: allows you to select the ratio for take profit 2 (default 4: 1)
- Alerts
• It is possible to configure the following alerts:
-VRI DETECTED
-VVI DETECTED
-VRI / VVI DETECTED
Final Notes:
- The term hard rules refers to the fact that an event is sought with the rules detailed above to obtain a high quality event but this brings 2 situations to consider, less
number of events and events that are generated in a strong impulse may be leaked, a very large control bar followed by an ignored narrow body away from moving averages, despite having a good chance of continuing, taking a stop very tight in a strong impulse you can touch it by the simple fact of the own volatility at that time.
- The setting of the parameters “Minimum body percentage% (control bar)”, “Above x% of the control bar (bar ignored)” and “Cannot override the minimum of the ignored bar” can bring large Benefits in terms of number of events and that can also be of high quality, feel free to find the best configuration for your instrument to operate.
- It is recommended to look for trending events, near moving averages and at an early stage of it.
- The display of several nearby VRIs or VVIs in an advanced trend may indicate a depletion of it.
- The alerts can be worked in 2 ways: at the closing of the candle (confirms event but the risk unit may be larger or smaller) or immediately the body of the ignored bar is exceeded, in case you are operating from the mobile and miss many events because of the short time I recommend that you operate in a superior time frame to have more time.
- The indicator is configured with “flexible” rules to have more events, but without any important criteria, each trader has to look for the best configuration that suits his instrument.
- It is recommended to partially close the operation based on the ratio and always keep a part of the position to apply manual trailing stop and try to maximize profits.
The code is open feel free to use and modify it, a mention in credits is appreciated.
If you liked this SCRIPT THUMB UP!
Greetings to all, I wish you much green!
CryptoEngineering 🔥Isn’t It Time You Made Your Crypto Portfolio Great Again? 🔥
The falling knives, the heartbreaking crashes, the devastating feeling of watching a missed trade soar all the way to the moon.
The markets aren’t fair, which means you need a tool that gives you an edge. So,It is time to try EngineeringRobo.
The Engineeringrobo is a great ally in a crypto market - when the price moves the algorithm will automatically show Buy and Sell orders when there is a best opportunity to make a profit. It is a just SMART trading system script on TradingView that brings the easiest approach to trading with a high profitability rate.
I created EngineeringRobo to help you on your traders as a robo advisor , It will "not " trade on behalf of you on exchanges via API. It is not an AI robot,It is am ALGO Trading robot. You can use it on any trading markets (BIST, S&P 500,Commodities ,Forex, Crypto ) with any time frame!
My unique algorithm find profitable altcoins based on their Ichimoku, McGinley, MA, RSI, MACD, Stochastic, Volumes and Price Changes gives you BUY and SELL signals. The EngineeringRobo indicator displays two different signals for entry and exit on a coin to maximize its profitability on the chart. The signals can appear at any time during an open candle, but once closed the signal is final and wont change in the future.
One of the biggest advantages of algo trading is removing human emotion from the crypto markets,humans trading are susceptible to emotions that lead to irrational decisions.Robo doesn't have to think or feel good to make a trade. If conditions are met, it enters.When the trade goes the wrong way or hits a profit target, It exits. It doesn't get angry at the market or feel invincible after making a few good trades. The two emotions that lead to poor decisions that algo traders aren't susceptible to are fear,and greed.
That's why It makes money but most of you not!
What Are the Advantages of using it as a ROBO Advisor?
🔴Reduce your required screen-time
🔴Reduce anxiety over missing setups when you are busy
🔴Turn existing indicators into alerts (eg. Whenever RSI goes overbought)
🔴Find comfort in knowing that you have me on your side
To get the maximized results from @EngineeringRobo
Open tradingview
Decide the coin/BTC
Pick 1M
Draw the Support & Resistance lines
Change the 1W
Draw the lines - Support & Resistance
Find out Chart Patterns
Change to 3D/1D / 3H
Check Robo' signals
Set your orders
Enjoy your profits💰
***Even the best automated day trading software can trigger false trends.
In August 2012 by Knight Capital group;who lost over $440 million in just half an hour when their trading software went rogue in response to market conditions. That's why it is a Robo advisor not trading bot! Engineeringrobo is not a get-rich-quick scheme as well!
Disclaimer
Information on EngineeringRobo should not be seen as a recommendation to trade BIST, S&P 500,Commodities ,Forex, Crypto.
EngineeringRobo is not licensed nor authorized to provide advice on investing and related matters.
Information on the page is not, nor should it be seen as investment advice.Any trading decisions that you make are solely your responsibility. Clients without sufficient knowledge should seek individual advice from an authorized source.
Crypto and Forex trading entails significant risks and there is a chance that clients lose all of their invested money. Past performance is not a guarantee of future returns. Before trading with any of the Algos, clients should make sure they understand the risks.
EngineeringRobo nor its agents or partners are not registered and do not provide any services on the US territory.
***I have been trading since 2016 . Got my first bitcoin in 2013
Cyatophilum Bands Pro Trader V3 [ALERTSETUP]An Original Automated Strategy that can be used for Manual or Bot Trading, on any timeframe and market.
>> Presentation <<
This script comes with a Backtest Version
How it works
No, these are NOT Bollinger Bands..
The Cyatophilum Bands are an original formula that I created. You will probably never find it anywhere else.
Their behavior is the following:
When they are horizontal it means the trend is going sideways and they represent supports (lower band) and resistances (upper band).
When they are climbing or falling it means the trend is either bullish or bearish and they represent Trend Lines.
The strategy enters Long on a Bull Breakout and enters Short on a Bear Breakout.
The exits are triggered either on a Trend Reversal, a Stop Loss or a Take Profit.
FEATURES
Take Profit System
Stop Loss System
Show Net profit Line
More features here
Finding a profitable configuration is GUARANTEED
0. Choose your symbol and timeframe. Then add the Backtest version to your chart. If at any time you decide to change your timeframe, go back to step 1.
1. Open the strategy tester and look at the buy & hold line.
If it is mostly climbing (last value greater than 0) then it means we are in a bull market. You should then opt or a long only strategy.
If it is mostly dropping (last value lower than 0) then it means we are in a bear market. You should then opt or a short only strategy.
Note : This first step is really important. Trading against the market has very little chances to succeed.
2. Go into the Strategy Input Parameters:
check "Enable Long Results" and uncheck "Enable Short Results" if you are in a long only strategy.
check "Enable Short Results" and uncheck "Enable Long Results" if you are in a short only strategy.
3. Open the Strategy Tester and open the Strategy Properties.
We are going to find the base parameters for the Bands.
The "Bands Lookback" is the main parameter to configure for any strategy. It corresponds to how strong of a support and resistance the bands will behave. The lower the timeframe, the higher lookback you will need. It can move from 10 to 60. For example 60 is a good value for a 3 minute timeframe. Try different values, and look at the "net profit" value in the Overview tab of the Strategy Tester. Keep the Lookback value that shows the best net profit value.
Then play with the "Bands Smoothing" from 2 to 20 and keep the best net profit value.
The "Band Smoothing" is used to reduce noise.
Usually, the default value (10) is what gives the best results.
From this point you should already be able to have a profitable strategy (net profit>0), but we can improve it using the Stop Loss and the Take Profit feature.
4. To activate the Stop Loss feature, click on the "SECURITY" checkbox
You should see horizontal red lines appear.
A Long/short exit alert will be triggered if the price were to cross this line. (A red Xcross will appear)
Choose the Stop Loss percentage.
On top of that, you can enable the feature "Trailing Stop". It will make the red line follow the price, at a speed that you can configure with the "Trailing Speed" parameter.
Now, sometimes a stop is triggered and it was just a fakeout. You can enable "Re-entries after a stop" to avoid missing additional opportunities.
5. To activate the Take Profit feature, click on the "TAKE PROFIT" checkbox
You should see horizontal green lines appear.
A Long/short exit alert will be triggered if the price were to cross this line. (A flag will appear)
Choose the Take Profit percentage.
A low takeprofit will provide a safer strategy but can reduce potential profits.
A higher takeprofit will increase risk but can provide higher potential profits.
6. Money Management
You can configure the backtest according to your own money management.
Let's say you have 10 000 $ as initial capital and want to trade only 5%, set the Order Size to 5% of Equity.
You can increase net profit by increasing the order size but this is at your own risk.
How to create alerts explained here
Sample Uses Cases
Use it literally anywhere
This indicator can be used on any timeframe and market (not only cryptocurrencies).
About the Backtest below
The Net Profit (Gross profit - Gross loss) is calculated with a commission of 0.05% on each order.
No leverage used. This is a long strategy.
Each trade is made with 10 % of equity from an inital capital of 10 000$. The net profit can be bigger by increasing the % of equity but this a trader's rule to minimise the risk.
I am selling access to all my indicators on my website : blockchainfiesta.com
To get a 2 days free trial, just leave a comment , thanks !
Join my Discord for help, configurations, requests, etc. discord.gg
cryptomars 1.0 Concussion trend alarm Description:
1. In the indicator, there is an orange signal that fluctuates linearly. It is a buy signal when it goes from bottom to top. When the signal line remains in the upper position, it indicates a multi-party trend.
2. When it goes from top to bottom, it indicates a sell signal. When the signal line remains below, it indicates a sales trend.
3. Depending on the time level, when the position of the signal line changes, determine whether the current candle is completed or not according to the time level of the chart you selected to determine the signal. For example, if you select a chart level of 5 meters, then when the signal line changes, for example, it will send a sell signal from top to bottom. At this time, please do not rush to sell. You should wait for this 5 meter candlestick to complete. When the candle is over and the next candle is started, if the signal line remains in the top-down form, the sell signal is normal and you can sell it.
Because the position of the signal appears, it is the location of the sale. During the completion of the candlestick , the signal may disappear after disappearing. We only have to wait for a while to get a more stable deal.
4. The alarm setting is very simple. There are two lines in the indicator. One is the orange signal line that fluctuates up and down, and the other is the fixed zero line of “zero”.
We set it in the alarm. When the signal line passes "zero" from the top, the short signal is sent only when the candle map is completed. When the signal line passes "zero" from "up" below, the signal is sent for a long time when the candlestick is completed.
One trick, the appearance of the signal, is that the price runs in one direction for a while, so it appears at or near the bottom. Because, when we have already made a profit in the transaction, we can make a profit in advance, and we do not need to wait for the opposite signal to stop the profit and reduce the risk of profit retracement.
Because in this market, the fluctuations are very large, and the people who compete are also very fierce. What we need to do is to make every transaction as possible, and we are all profitable. If we sell and find that the price is still rising, please don't feel sorry, don't consider eating all the profits.
6. When the signal appears, in most cases, even in the impact trend, it will still run a distance in the direction of the signal, that is, you will profit, so please close the position and make a profit in time. Otherwise, when the price volatility is too small, you miss the profit point, the price starts to run in the opposite direction, and you may change from profit to loss.
BITMEX's trailing stop loss is a great feature, please use it flexibly.
7, if it is a shock trend, please try not to trade.
8. We recommend that you turn on the “cryptomars 3.0” and “cryptomars 2.0” indicators. No matter who signs the trade first, you can trade, which can help you get more profit.
9. Remember, I hope this indicator will be your powerful assistant, but please don't rely on it completely. Learning more trading knowledge and skills is even more important. Therefore, when we consider the profitable position, you can use your trading skills, MACD , KDJ, etc. to assist and profit in a more suitable position.
cryptomars 2.0 short alarmDescription:
1. In the indicator, there is an orange signal that fluctuates linearly. It is a buy signal when it goes from bottom to top. When the signal line remains in the upper position, it indicates a multi-party trend.
2. When it goes from top to bottom, it indicates a sell signal. When the signal line remains below, it indicates a sales trend.
3. Depending on the time level, when the position of the signal line changes, determine whether the current candle is completed or not according to the time level of the chart you selected to determine the signal. For example, if you select a chart level of 5 meters, then when the signal line changes, for example, it will send a sell signal from top to bottom. At this time, please do not rush to sell. You should wait for this 5 meter candlestick to complete. When the candle is over and the next candle is started, if the signal line remains in the top-down form, the sell signal is normal and you can sell it.
Because the position of the signal appears, it is the location of the sale. During the completion of the candlestick , the signal may disappear after disappearing. We only have to wait for a while to get a more stable deal.
4. The alarm setting is very simple. There are two lines in the indicator. One is the orange signal line that fluctuates up and down, and the other is the fixed zero line of “zero”.
We set it in the alarm. When the signal line passes "zero" from the top, the short signal is sent only when the candle map is completed. When the signal line passes "zero" from "up" below, the signal is sent for a long time when the candlestick is completed.
One trick, the appearance of the signal, is that the price runs in one direction for a while, so it appears at or near the bottom. Because, when we have already made a profit in the transaction, we can make a profit in advance, and we do not need to wait for the opposite signal to stop the profit and reduce the risk of profit retracement.
Because in this market, the fluctuations are very large, and the people who compete are also very fierce. What we need to do is to make every transaction as possible, and we are all profitable. If we sell and find that the price is still rising, please don't feel sorry, don't consider eating all the profits.
6. When the signal appears, in most cases, even in the impact trend, it will still run a distance in the direction of the signal, that is, you will profit, so please close the position and make a profit in time. Otherwise, when the price volatility is too small, you miss the profit point, the price starts to run in the opposite direction, and you may change from profit to loss.
BITMEX's trailing stop loss is a great feature, please use it flexibly.
7, if it is a shock trend, please try not to trade.
8. We recommend that you turn on the “cryptomars 3.0” and “cryptomars 1.0” indicators. No matter who signs the trade first, you can trade, which can help you get more profit.
9. Remember, I hope this indicator will be your powerful assistant, but please don't rely on it completely. Learning more trading knowledge and skills is even more important. Therefore, when we consider the profitable position, you can use your trading skills, MACD , KDJ, etc. to assist and profit in a more suitable position.
cryptomars alarm 3.0
Description:
1. In the indicator, there is an orange signal that fluctuates linearly. It is a buy signal when it goes from bottom to top. When the signal line remains in the upper position, it indicates a multi-party trend.
2. When it goes from top to bottom, it indicates a sell signal. When the signal line remains below, it indicates a sales trend.
3. Depending on the time level, when the position of the signal line changes, determine whether the current candle is completed or not according to the time level of the chart you selected to determine the signal. For example, if you select a chart level of 5 meters, then when the signal line changes, for example, it will send a sell signal from top to bottom. At this time, please do not rush to sell. You should wait for this 5 meter candlestick to complete. When the candle is over and the next candle is started, if the signal line remains in the top-down form, the sell signal is normal and you can sell it.
Because the position of the signal appears, it is the location of the sale. During the completion of the candlestick , the signal may disappear after disappearing. We only have to wait for a while to get a more stable deal.
4. The alarm setting is very simple. There are two lines in the indicator. One is the orange signal line that fluctuates up and down, and the other is the fixed zero line of “zero”.
We set it in the alarm. When the signal line passes "zero" from the top, the short signal is sent only when the candle map is completed. When the signal line passes "zero" from "up" below, the signal is sent for a long time when the candlestick is completed.
One trick, the appearance of the signal, is that the price runs in one direction for a while, so it appears at or near the bottom. Because, when we have already made a profit in the transaction, we can make a profit in advance, and we do not need to wait for the opposite signal to stop the profit and reduce the risk of profit retracement.
Because in this market, the fluctuations are very large, and the people who compete are also very fierce. What we need to do is to make every transaction as possible, and we are all profitable. If we sell and find that the price is still rising, please don't feel sorry, don't consider eating all the profits.
6. When the signal appears, in most cases, even in the impact trend, it will still run a distance in the direction of the signal, that is, you will profit, so please close the position and make a profit in time. Otherwise, when the price volatility is too small, you miss the profit point, the price starts to run in the opposite direction, and you may change from profit to loss.
BITMEX's trailing stop loss is a great feature, please use it flexibly.
7, if it is a shock trend, please try not to trade.
8. We recommend that you turn on the “cryptomars 2.0” and “cryptomars 1.0” indicators. No matter who signs the trade first, you can trade, which can help you get more profit.
9. Remember, I hope this indicator will be your powerful assistant, but please don't rely on it completely. Learning more trading knowledge and skills is even more important. Therefore, when we consider the profitable position, you can use your trading skills, MACD , KDJ, etc. to assist and profit in a more suitable position.
Complete Trend Trading System [Fhenry0331]This system was designed for the beginner trader to make money swing trading. Your losses will be small and your gains will be mostly large. You will show consistent profit. Period.
The system works on any security you like to trade. I used GBPUSD as an example because of the up swing and down swing it had recently. I tried to put as much information of how the system works in the chart. Hope it helps and is not to cluttered.
I will reiterate how the system works here: Everything is based off of closed price.
Legend
Uptrend: Buy
Green bar: initial start of an uptrend or uptrend continuing. Place order above that bar. If the initial bar does not stray too far from the MVWAP , I will place orders above subsequent bars if no filled occurred.
If initial start of the trend is missed, I will wait for the pullback. A pullback is a close below the MVWAP, and a close above the EMA (Low), RSI is above 50. Orders are placed above the pullback bars with plotted char "B" and also plotted green triangle up. Again orders are placed above those bars. the bars do not notate automatic buys. Don't chase anything. You will miss the initial bar on something because of news or earnings and it rocket up. Just wait, it will pullback. If it doesn't, to hell with it, on to the next.
Take profits: In the indicator you will see "T." That notates to take some profits. It is a suggestion. I was always told to take profits into spikes, as well as you can never lose money if you take profits. Up to you if you want to scale out and take the suggested profits or not.
Exit Completely: In an uptrend, close your entire position on bars colored yellow or red. (Again, closed bars)
In uptrend bars colored orange and black, do nothing, they are just pullback bars. Look for the buy pullback signal, then follow pullback buy rules for an uptrend.
Downtrend: Short
Red bar: initial start of a downtrend or downtrend continuing. Place order below the bar. If the initial bar does not stray too far fro the MVWAP, place orders below subsequent bars.
If initial start on the downtrend is missed, wait for the pullback. A pullback is a close above the MVWAP, and close below the EMA(Low). RSI is below 50. Orders are placed below the pullback bars with the plotted char "S" and also plotted red triangle. Again those bars are not automatic shorts, orders are placed below them. Don't chase anything. Wait for price to come into your plan. The idea FOMO is the stupidest thing ever, how can you miss out on something when it is always there. The market is always there and something will come into your zone. Chill.
"T": same as in uptrend, suggestion to take some profits.
Exit Completely: In a downtrend, close your entire position on bars colored orange or green.
In downtrend you will see bars colored yellow and black, do nothing, they are pullback bars. Look for the pullback short signal and follow pullback short rules.
If you have any questions get at me. Take a look at it on what you trade. Flip it through different securities.
Best of luck in all you do.
P.S. You should not take a trade right before earnings. You should also exit a trade right before earnings.
Wyckoff Method - Comprehensive Analysis# WYCKOFF METHOD - QUICK REFERENCE CHEAT SHEET
## 🟢 STRONGEST BUY SIGNALS
### 1. SPRING ⭐⭐⭐⭐⭐
- **What:** False breakdown below support on LOW volume
- **Look for:** Quick reversal, close above support
- **Entry:** When price closes back in range
- **Stop:** Below spring low
- **Target:** Top of range minimum
### 2. SOS (Sign of Strength) ⭐⭐⭐⭐
- **What:** Breakout above resistance on HIGH volume
- **Look for:** Wide spread up bar, strong close
- **Entry:** On breakout or wait for LPS pullback
- **Stop:** Below range top
- **Target:** Height of range projected up
### 3. SHAKEOUT ⭐⭐⭐⭐
- **What:** Sharp move below support with HIGH volume, immediate reversal
- **Look for:** Long lower wick, closes strong
- **Entry:** When price reclaims support
- **Stop:** Below shakeout low
- **Target:** Previous resistance
---
## 🔴 STRONGEST SELL SIGNALS
### 1. UTAD (Upthrust After Distribution) ⭐⭐⭐⭐⭐
- **What:** False breakout above resistance, quick rejection
- **Look for:** Spike high, weak close, often high volume
- **Entry:** When price closes back in range
- **Stop:** Above UTAD high
- **Target:** Bottom of range minimum
### 2. SOW (Sign of Weakness) ⭐⭐⭐⭐
- **What:** Breakdown below support on HIGH volume
- **Look for:** Wide spread down bar, weak close
- **Entry:** On breakdown or wait for LPSY rally
- **Stop:** Above range bottom
- **Target:** Height of range projected down
### 3. UPTHRUST ⭐⭐⭐⭐
- **What:** Move above resistance on LOW volume, weak close
- **Look for:** Long upper wick, closes in lower half
- **Entry:** When resistance holds
- **Stop:** Above upthrust high
- **Target:** Support level
---
## 📊 ACCUMULATION PHASES (Bottom Formation)
```
PHASE A: Stopping the Downtrend
├─ PS (Preliminary Support) - First buying
├─ SC (Selling Climax) - Panic bottom ⚠️ KEY EVENT
├─ AR (Automatic Rally) - Relief bounce
└─ ST (Secondary Test) - Retest SC low
PHASE B: Building the Cause
├─ Trading range forms
├─ Multiple tests of support
├─ Volume decreasing
└─ Absorption occurring
PHASE C: The Test
├─ SPRING - False breakdown ⚠️ KEY EVENT
└─ TEST - Support holds on low volume
PHASE D: Dominance Emerges
├─ SOS - Breakout ⚠️ KEY EVENT
├─ LPS - Last Point of Support (pullback)
└─ BU - Backup
PHASE E: Markup
└─ New uptrend, strong momentum
```
**Background Color:** Blue → Green (getting brighter)
**Action:** Buy in Phase C/D, Hold through Phase E
---
## 📊 DISTRIBUTION PHASES (Top Formation)
```
PHASE A: Stopping the Uptrend
├─ PSY (Preliminary Supply) - First selling
├─ BC (Buying Climax) - Euphoric top ⚠️ KEY EVENT
├─ AR (Automatic Reaction) - Sharp drop
└─ ST (Secondary Test) - Retest BC high
PHASE B: Building the Cause
├─ Trading range forms
├─ Multiple tests of resistance
├─ Demand being absorbed
└─ Volume patterns change
PHASE C: The Test
└─ UTAD - False breakout ⚠️ KEY EVENT
PHASE D: Dominance Emerges
├─ SOW - Breakdown ⚠️ KEY EVENT
└─ LPSY - Last Point of Supply (rally to exit)
PHASE E: Markdown
└─ New downtrend, strong selling
```
**Background Color:** Orange → Red (getting darker)
**Action:** Sell in Phase C/D, Stay out during Phase E
---
## 💰 VOLUME SPREAD ANALYSIS (VSA)
| Signal | Meaning | Color | Implication |
|--------|---------|-------|-------------|
| **ND** (No Demand) | Up bar, LOW volume | 🟠 Orange | Weakness - uptrend ending |
| **NS** (No Supply) | Down bar, LOW volume | 🔵 Blue | Strength - downtrend ending |
| **SV** (Stopping Volume) | VERY HIGH volume, narrow spread | 🟣 Purple | Potential reversal |
| **UT** (Upthrust) | Above resistance, LOW vol, weak close | 🔴 Red | Sell signal |
| **SO** (Shakeout) | Below support, HIGH vol, strong close | 🟢 Green | Buy signal |
---
## 🎯 VOLUME INTERPRETATION
| Volume Level | Bar Color | Meaning |
|--------------|-----------|---------|
| **VERY HIGH** (>2x average) | Dark Green/Red | Climax, potential reversal |
| **HIGH** (>1.5x average) | Light Green/Red | Strong interest |
| **NORMAL** | Gray | Average trading |
| **LOW** (<0.7x average) | Faint Gray | Testing, no interest |
---
## ⚖️ EFFORT vs RESULT
| Scenario | Volume | Spread | Meaning |
|----------|--------|--------|---------|
| **High Effort, Low Result** | HIGH | Narrow | ⚠️ Potential reversal |
| **Low Effort, High Result** | LOW | Wide | ⚠️ Trend weakening |
| **High Effort, High Result** | HIGH | Wide | ✅ Strong trend |
| **Low Effort, Low Result** | LOW | Narrow | 😴 No interest |
---
## 📏 TRADING RULES
### ✅ DO:
- ✅ Wait for confirmation before entering
- ✅ Trade in direction of higher timeframe
- ✅ Use springs and UTAD as primary signals
- ✅ Measure trading range for targets
- ✅ Place stops outside the range
- ✅ Look for volume confirmation
- ✅ Check multiple timeframes
- ✅ Focus on Phase C and D events
### ❌ DON'T:
- ❌ Buy during Phase E Markdown
- ❌ Sell during Phase E Markup
- ❌ Trade against major trend
- ❌ Ignore volume signals
- ❌ Enter without clear stop loss
- ❌ Trade every signal
- ❌ Use on very low timeframes without practice
- ❌ Ignore the context
---
## 🎪 COMPOSITE OPERATOR (Smart Money)
### 💰 Green Money Symbol (Bottom)
- **Meaning:** Institutions accumulating
- **Location:** Demand zones, springs, tests
- **Action:** Follow the smart money - buy
### 💰 Red Money Symbol (Top)
- **Meaning:** Institutions distributing
- **Location:** Supply zones, UTAD, weak rallies
- **Action:** Follow the smart money - sell
---
## 📍 SUPPLY & DEMAND ZONES
### 🟢 Demand Zones (Green Boxes)
- **Created at:** SC, Spring, Shakeout
- **Represents:** Where smart money bought
- **Action:** Look for bounces
### 🔴 Supply Zones (Red Boxes)
- **Created at:** BC, UTAD, Upthrust
- **Represents:** Where smart money sold
- **Action:** Look for rejections
---
## 🎯 TARGET CALCULATION
### Measured Move Method
```
1. Measure trading range height
Example: Top at 120, Bottom at 100 = 20 points
2. Add to breakout point (accumulation)
Breakout at 120 + 20 = Target: 140
3. Or subtract from breakdown (distribution)
Breakdown at 100 - 20 = Target: 80
```
### Multiple Targets
- **Conservative:** 1x range height (100% probability reached)
- **Moderate:** 1.5x range height (70% probability)
- **Aggressive:** 2x range height (40% probability)
---
## ⏰ TIMEFRAME GUIDE
| Timeframe | Use For | Reliability | Recommended For |
|-----------|---------|-------------|-----------------|
| **Weekly** | Major trends | ⭐⭐⭐⭐⭐ | Position traders |
| **Daily** | Swing trades | ⭐⭐⭐⭐⭐ | Most traders |
| **4-Hour** | Active swing | ⭐⭐⭐⭐ | Active traders |
| **1-Hour** | Day trading | ⭐⭐⭐ | Experienced only |
| **15-Min** | Scalping | ⭐⭐ | Experts only |
**Golden Rule:** Always check one timeframe higher for context!
---
## 🚨 ALERT PRIORITY
### 🔔 MUST-HAVE ALERTS
1. Spring
2. UTAD
3. SOS
4. SOW
### 🔔 NICE-TO-HAVE ALERTS
5. Selling Climax (SC)
6. Buying Climax (BC)
7. Smart Money Accumulation
8. Smart Money Distribution
### 🔔 CONFIRMATION ALERTS
9. Phase E Markup
10. Phase E Markdown
---
## 💡 QUICK DECISION TREE
```
Is there a clear trading range?
├─ YES
│ ├─ Did price break BELOW support?
│ │ ├─ Volume LOW + Quick reversal = SPRING → BUY ✅
│ │ └─ Volume HIGH + Stays down = Breakdown → SELL ⚠️
│ │
│ └─ Did price break ABOVE resistance?
│ ├─ Volume LOW + Quick reversal = UTAD → SELL ✅
│ └─ Volume HIGH + Stays up = Breakout → BUY ⚠️
│
└─ NO
├─ Strong uptrend = Wait for re-accumulation
└─ Strong downtrend = Wait for re-distribution
```
---
## 📝 PRE-TRADE CHECKLIST
Before entering any trade:
- Identified the current Wyckoff phase
- Confirmed with volume analysis
- Checked higher timeframe trend
- Located supply/demand zones
- Identified clear entry point
- Set stop loss level
- Calculated target (risk:reward >1:2)
- Verified position size (risk 1-2%)
- Have at least 2 confirming signals
- Not trading against major trend
---
## 🧠 REMEMBER
**The Three Laws:**
1. **Supply & Demand** - Price is determined by imbalance
2. **Cause & Effect** - Range size predicts move size
3. **Effort & Result** - Volume should confirm price movement
**The Key Principle:**
> "Trade with the Composite Operator (smart money), not against them"
**Best Setups:**
1. Spring in accumulation (Phase C)
2. UTAD in distribution (Phase C)
3. SOS breakout (Phase D)
4. SOW breakdown (Phase D)
**When in Doubt:**
- ❓ Stay out
- 📈 Use higher timeframe
- 📚 Review the documentation
- 🎯 Wait for clearer signal
---
## 📱 INDICATOR SETTINGS QUICK SETUP
**For Stocks/Crypto (Good Volume Data):**
- Volume MA Length: 20
- High Volume Multiplier: 1.5
- Climax Volume: 2.0
- Swing Length: 5
**For Forex (Limited Volume Data):**
- Volume MA Length: 20
- High Volume Multiplier: 1.3
- Climax Volume: 1.8
- Swing Length: 7
- Turn OFF "Volume Confirmation"
**For Day Trading:**
- Swing Length: 3
- All other settings: Default
**For Position Trading:**
- Swing Length: 7-10
- Volume MA Length: 30
- Use Daily/Weekly charts
---
## 🎓 SKILL PROGRESSION
### Beginner (Month 1-2)
- Focus on: SC, Spring, SOS
- Timeframe: Daily only
- Goal: Identify phases correctly
### Intermediate (Month 3-6)
- Add: All accumulation events
- Timeframe: Daily + 4H
- Goal: Trade springs profitably
### Advanced (Month 6-12)
- Add: Distribution events, VSA
- Timeframe: Multiple timeframes
- Goal: Trade complete cycles
### Expert (Year 2+)
- Master: All events, all timeframes
- Combine: With other methodologies
- Goal: Consistent profitability
---
**Print this sheet and keep it next to your trading desk!**
*Remember: Quality over quantity. Wait for the best setups.*
# Wyckoff Method - Comprehensive Analysis Indicator
## Complete Implementation Guide for TradingView Pine Script
---
## TABLE OF CONTENTS
1. (#overview)
2. (#installation)
3. (#theory)
4. (#components)
5. (#signals)
6. (#strategies)
7. (#settings)
8. (#alerts)
9. (#patterns)
10. (#troubleshooting)
---
## OVERVIEW
This indicator implements Richard Wyckoff's complete trading methodology, including:
- **All 5 Phases** of Accumulation and Distribution
- **18+ Wyckoff Events** (PS, SC, AR, ST, Spring, SOS, LPS, BC, UTAD, SOW, etc.)
- **Volume Spread Analysis (VSA)** principles
- **Supply & Demand Zone** detection
- **Composite Operator** logic (Smart Money tracking)
- **Effort vs Result** analysis
- **Three Wyckoff Laws**: Supply/Demand, Cause/Effect, Effort/Result
---
## INSTALLATION
### Step 1: Copy the Code
1. Open the `wyckoff_comprehensive.pine` file
2. Select all code (Ctrl+A / Cmd+A)
3. Copy to clipboard (Ctrl+C / Cmd+C)
### Step 2: Add to TradingView
1. Go to TradingView.com
2. Open any chart
3. Click "Pine Editor" at the bottom of the screen
4. Click "New" or "Open"
5. Paste the entire code
6. Click "Save" and give it a name
7. Click "Add to Chart"
### Step 3: Verify Installation
You should see:
- Labels on the chart (PS, SC, Spring, SOS, etc.)
- Background colors indicating phases
- Volume analysis in the lower pane
- A table in the top-right corner showing current phase
---
## WYCKOFF METHOD THEORY
### The Three Fundamental Laws
#### 1. **Law of Supply and Demand**
- Price rises when demand exceeds supply
- Price falls when supply exceeds demand
- The indicator tracks volume vs price movement to identify imbalances
#### 2. **Law of Cause and Effect**
- A period of accumulation (cause) leads to markup (effect)
- A period of distribution (cause) leads to markdown (effect)
- Trading ranges build "cause" for future price movement
#### 3. **Law of Effort vs Result**
- **Effort** = Volume (energy put into the market)
- **Result** = Price movement (spread of the bar)
- High effort with low result = potential reversal
- Low effort with high result = trend weakness
### The Five Phases
#### **ACCUMULATION CYCLE**
**Phase A: Stopping the Downtrend**
- Preliminary Support (PS): First sign of buying
- Selling Climax (SC): Panic selling exhaustion
- Automatic Rally (AR): Bounce from SC
- Secondary Test (ST): Test of SC low on lower volume
**Phase B: Building the Cause**
- Trading range develops
- Supply being absorbed by composite operator
- Multiple tests of support and resistance
- Volume generally decreases
**Phase C: The Test (Spring)**
- False breakdown below support
- Traps late sellers
- Quick reversal on low volume
- Last chance to accumulate before markup
**Phase D: Dominance Emerges**
- Sign of Strength (SOS): Break above resistance
- Last Point of Support (LPS): Pullback opportunity
- Backup (BU): Final consolidation
- Demand clearly exceeds supply
**Phase E: Markup**
- New uptrend established
- Price moves rapidly higher
- Phase E can last months/years
- Original trading range becomes support
#### **DISTRIBUTION CYCLE**
**Phase A: Stopping the Uptrend**
- Preliminary Supply (PSY): First sign of selling
- Buying Climax (BC): Euphoric buying exhaustion
- Automatic Reaction (AR): Sharp selloff from BC
- Secondary Test (ST): Test of BC high on lower volume
**Phase B: Building the Cause**
- Trading range at top
- Demand being absorbed by composite operator
- Multiple tests of support and resistance
**Phase C: The Test (UTAD)**
- Upthrust After Distribution
- False breakout above resistance
- Traps late buyers
- Quick reversal
**Phase D: Dominance Emerges**
- Sign of Weakness (SOW): Break below support
- Last Point of Supply (LPSY): Rally opportunity to exit
- Supply clearly exceeds demand
**Phase E: Markdown**
- New downtrend established
- Price moves rapidly lower
- Original trading range becomes resistance
---
## INDICATOR COMPONENTS
### 1. EVENT LABELS
#### Accumulation Events (Green labels)
- **PS** = Preliminary Support
- **SC** = Selling Climax (largest label, most important)
- **AR** = Automatic Rally
- **ST** = Secondary Test
- **SPRING** = Spring (critical buy signal)
- **TEST** = Test of support
- **SOS** = Sign of Strength (breakout)
- **LPS** = Last Point of Support
- **BU** = Backup
#### Distribution Events (Red labels)
- **PSY** = Preliminary Supply
- **BC** = Buying Climax (largest label, most important)
- **AR** = Automatic Reaction
- **ST** = Secondary Test
- **UTAD** = Upthrust After Distribution (critical sell signal)
- **SOW** = Sign of Weakness
- **LPSY** = Last Point of Supply
#### VSA Events (Small colored labels)
- **ND** (Orange) = No Demand - weakness
- **NS** (Blue) = No Supply - strength
- **SV** (Purple) = Stopping Volume
- **UT** (Red) = Upthrust - weakness
- **SO** (Green) = Shakeout - strength
#### Composite Operator (💰 symbols)
- Green 💰 at bottom = Smart Money Accumulation
- Red 💰 at top = Smart Money Distribution
### 2. BACKGROUND COLORS
- **Light Blue** = Phase A (Accumulation)
- **Light Orange** = Phase A (Distribution)
- **Very Light Green** = Phase C (Accumulation Testing)
- **Very Light Red** = Phase C (Distribution Testing)
- **Light Green** = Phase D (Accumulation Strength)
- **Light Red** = Phase D (Distribution Weakness)
- **Green** = Phase E (Markup - Bull trend)
- **Red** = Phase E (Markdown - Bear trend)
### 3. SUPPLY & DEMAND ZONES
- **Green boxes** = Demand zones (where smart money accumulated)
- **Red boxes** = Supply zones (where smart money distributed)
- Zones extend 20 bars into the future
- Price reactions at these zones are significant
### 4. VOLUME PANEL
- **Dark Green/Red bars** = Very High Volume (climax)
- **Light Green/Red bars** = High Volume
- **Gray bars** = Normal Volume
- **Faint Gray bars** = Low Volume
- **Blue line** = Volume Moving Average
### 5. INFORMATION TABLE (Top Right)
Displays real-time analysis:
- **Current Phase** (A, B, C, D, or E)
- **Status** (description of what's happening)
- **Volume** (Very High, High, Normal, Low)
- **Spread** (Wide, Normal, Narrow)
- **Effort/Result** (Poor, Normal, Good)
- **Range** (YES if in trading range)
- **Bias** (BULLISH, BEARISH, or NEUTRAL)
---
## HOW TO READ THE SIGNALS
### STRONG BUY SIGNALS (in order of strength)
1. **SPRING** (strongest)
- False breakdown below support
- Look for: Low volume, quick reversal, close above support
- Entry: When price closes back above support level
- Stop: Below the spring low
2. **SOS (Sign of Strength)**
- Break above trading range resistance
- Look for: High volume, wide spread up bar
- Entry: On breakout or pullback to LPS
- Stop: Below trading range
3. **Shakeout (SO)**
- Similar to spring but more violent
- Look for: High volume, penetration of support, strong close
- Entry: When price reclaims support
- Stop: Below shakeout low
4. **LPS (Last Point of Support)**
- Pullback after SOS
- Look for: Low volume, shallow pullback
- Entry: When support holds
- Stop: Below LPS
5. **No Supply (NS)**
- Down bar on very low volume
- Indicates lack of selling pressure
- Confirms accumulation phase
### STRONG SELL SIGNALS (in order of strength)
1. **UTAD (Upthrust After Distribution)** (strongest)
- False breakout above resistance
- Look for: High volume spike, rejection, close below resistance
- Entry: When price closes back below resistance
- Stop: Above UTAD high
2. **SOW (Sign of Weakness)**
- Break below trading range support
- Look for: High volume, wide spread down bar
- Entry: On breakdown or rally to LPSY
- Stop: Above trading range
3. **Upthrust (UT)**
- Move above resistance on low volume, weak close
- Look for: Low volume, close in lower half of bar
- Entry: When resistance becomes resistance again
- Stop: Above upthrust high
4. **LPSY (Last Point of Supply)**
- Rally after SOW
- Look for: Low volume, weak rally
- Entry: When rally fails
- Stop: Above LPSY
5. **No Demand (ND)**
- Up bar on very low volume
- Indicates lack of buying pressure
- Confirms distribution phase
### NEUTRAL/WARNING SIGNALS
- **High Effort, Low Result** = Potential reversal coming
- **Stopping Volume** = Trend may be ending
- **Absorption** = Large volume with small movement (accumulation/distribution)
---
## TRADING STRATEGY EXAMPLES
### Strategy 1: Accumulation Range Breakout
**Setup:**
1. Identify trading range (blue background in Phase B)
2. Wait for Spring or Test (Phase C)
3. Wait for SOS breakout (Phase D)
**Entry:**
- Option A: Buy on SOS breakout
- Option B: Wait for LPS pullback (better risk/reward)
**Stop Loss:**
- Below the spring low or trading range bottom
**Target:**
- Measure height of trading range (cause)
- Project upward from breakout point (effect)
- Minimum target = range height
**Example:**
```
Trading Range: 100 to 120 (20 point range)
SOS Breakout at: 120
Target: 120 + 20 = 140 minimum
```
### Strategy 2: Distribution Range Breakdown
**Setup:**
1. Identify trading range after uptrend
2. Wait for UTAD (Phase C)
3. Wait for SOW breakdown (Phase D)
**Entry:**
- Option A: Sell on SOW breakdown
- Option B: Wait for LPSY rally (better risk/reward)
**Stop Loss:**
- Above the UTAD high or trading range top
**Target:**
- Measure height of trading range
- Project downward from breakdown point
- Minimum target = range height
### Strategy 3: Spring Trading
**Setup:**
1. Strong downtrend followed by range
2. Price breaks below range bottom
3. Volume is LOW on breakdown
4. Price quickly reverses and closes above support
**Entry:**
- When candle closes above support level
- Or on retest of support
**Stop Loss:**
- Below spring low (usually tight)
**Target:**
- Top of trading range
- Previous swing high
**Risk/Reward:**
- Typically 1:3 or better
### Strategy 4: Smart Money Tracking
**Setup:**
1. Look for 💰 symbols in demand zones
2. Multiple accumulation signals (PS, SC, ST, Test)
3. Volume decreasing during range
**Entry:**
- At next demand zone test
- On SOS breakout
**Confirmation:**
- Background turning green (Phase D/E)
- Table shows "BULLISH" bias
### Strategy 5: VSA Reversal
**Setup:**
1. Strong trend in place
2. Stopping Volume (SV) appears at extreme
3. Followed by No Demand (ND) or No Supply (NS)
**Entry:**
- When trend breaks down/up
- On retest of extreme
**Example (Bullish):**
```
Downtrend → Stopping Volume → No Supply → Up bar
Entry: Buy when price moves above SV bar
```
---
## SETTINGS & CUSTOMIZATION
### Volume Analysis Settings
**Volume MA Length** (default: 20)
- Shorter = More sensitive to volume changes
- Longer = Smoother, less noise
- Recommended: 15-25 for most timeframes
**High Volume Multiplier** (default: 1.5)
- Threshold for "high volume"
- Lower = More signals
- Higher = Only extreme volume
- Recommended: 1.3-2.0
**Climax Volume Multiplier** (default: 2.0)
- Threshold for climax events (SC, BC)
- Should be significantly higher than normal
- Recommended: 2.0-3.0
### Phase Detection Settings
**Swing Detection Length** (default: 5)
- How many bars to look left/right for swing points
- Shorter = More swings detected (more noise)
- Longer = Fewer swings (cleaner, might miss some)
- Recommended: 3-7
**Range Expansion Threshold** (default: 1.5)
- Multiplier for "wide spread" bars
- Higher = Only very wide bars qualify
- Recommended: 1.3-2.0
**Volume Confirmation** (default: ON)
- Requires volume confirmation for events
- Turn OFF for very low volume instruments
- Keep ON for stocks, forex, crypto
### Display Options
Toggle on/off:
- ✅ **Show Accumulation/Distribution Phases** - Background colors
- ✅ **Show Wyckoff Events** - All labeled events
- ✅ **Show Volume Spread Analysis** - VSA labels
- ✅ **Show Supply/Demand Zones** - Boxes on chart
- ✅ **Show Composite Operator Signals** - 💰 symbols
### Color Customization
- **Bullish Color** - All accumulation events
- **Bearish Color** - All distribution events
- **Neutral Color** - Range/neutral signals
---
## ALERT SETUP
### Available Alerts
1. **Selling Climax (SC)** - Potential bottom forming
2. **Spring** - Strong buy signal
3. **Sign of Strength (SOS)** - Bullish breakout
4. **Buying Climax (BC)** - Potential top forming
5. **UTAD** - Strong sell signal
6. **Sign of Weakness (SOW)** - Bearish breakdown
7. **Phase E Markup** - Uptrend confirmed
8. **Phase E Markdown** - Downtrend confirmed
9. **Smart Money Accumulation** - Institutions buying
10. **Smart Money Distribution** - Institutions selling
### How to Set Up Alerts
1. Click the "⏰" icon on TradingView
2. Select "Create Alert"
3. Condition: Choose the indicator and alert type
4. Example: "Wyckoff Method - Spring"
5. Set notification preferences (popup, email, webhook)
6. Click "Create"
### Recommended Alert Strategy
**Conservative Trader:**
- Spring
- SOS
- UTAD
- SOW
**Aggressive Trader:**
- Add: SC, BC, Smart Money signals
**Long-term Investor:**
- Phase E Markup
- Phase E Markdown
- Smart Money Accumulation
---
## COMMON PATTERNS
### Pattern 1: Classic Accumulation
```
Phase A: Downtrend → PS → SC → AR → ST
Phase B: Range building (4-12 weeks typical)
Phase C: Spring (false breakdown)
Phase D: SOS → LPS → BU
Phase E: Markup (new uptrend)
```
**What to do:**
- Mark the range boundaries
- Wait for spring
- Buy on LPS or SOS
- Hold through markup
### Pattern 2: Classic Distribution
```
Phase A: Uptrend → PSY → BC → AR → ST
Phase B: Range building (topping process)
Phase C: UTAD (false breakout)
Phase D: SOW → LPSY
Phase E: Markdown (new downtrend)
```
**What to do:**
- Mark the range boundaries
- Wait for UTAD
- Sell on LPSY or SOW
- Stay out during markdown
### Pattern 3: Re-Accumulation
```
Uptrend → Trading Range → Spring → Uptrend continues
```
- Occurs during existing uptrend
- Shorter accumulation period
- Often no clear SC (trend is already up)
- Spring is the key signal
### Pattern 4: Re-Distribution
```
Downtrend → Trading Range → UTAD → Downtrend continues
```
- Occurs during existing downtrend
- Shorter distribution period
- Often no clear BC (trend is already down)
- UTAD is the key signal
### Pattern 5: Failed Breakout
**Bullish Failed Breakout:**
```
Range → Breakdown → Immediate reversal (Spring)
```
- Price breaks support
- Volume is LOW
- Immediate strong reversal
- Very bullish
**Bearish Failed Breakout:**
```
Range → Breakout → Immediate reversal (UTAD)
```
- Price breaks resistance
- Volume may be high initially
- Quick rejection and reversal
- Very bearish
---
## TIMEFRAME RECOMMENDATIONS
### Daily Charts (Most Reliable)
- Best for swing trading
- Clear phases and events
- Less noise
- Recommended for beginners
### 4-Hour Charts
- Good for active swing traders
- Faster signals than daily
- Still reliable
### 1-Hour Charts
- For day traders
- More false signals
- Need to filter carefully
- Use in conjunction with higher timeframe
### 15-Minute / 5-Minute
- Only for experienced traders
- High noise level
- Many false signals
- Use daily chart for context
**Golden Rule:** Always check higher timeframe first!
---
## MULTI-TIMEFRAME ANALYSIS
### Top-Down Approach (Recommended)
1. **Weekly Chart** - Identify major trend and phase
2. **Daily Chart** - Find current accumulation/distribution
3. **4H Chart** - Identify entry timing
4. **Entry Timeframe** - Execute trade
### Example Analysis:
**Weekly:** Phase E Markup (bullish)
**Daily:** Phase B Re-accumulation
**4-Hour:** Spring detected
**Action:** Buy on daily LPS
---
## WYCKOFF + OTHER INDICATORS
### Complementary Tools
1. **Moving Averages**
- 20/50 SMA for trend context
- Already plotted on indicator
2. **RSI**
- Divergences at SC/BC
- Confirms overbought/oversold
3. **MACD**
- Confirms trend change in Phase D
- Divergences support Wyckoff events
4. **Volume Profile**
- Identifies value areas
- Confirms supply/demand zones
5. **Order Flow / Footprint Charts**
- See institutional activity
- Confirms smart money signals
**Don't Over-Complicate:**
- Wyckoff is a complete system
- Other indicators are supplementary
- When in doubt, trust Wyckoff
---
## TROUBLESHOOTING
### Issue: Too Many Labels
**Solution:**
- Increase swing length (Settings → 7 or 10)
- Increase volume multipliers
- Turn off VSA labels if not needed
- Focus on major events only (SC, Spring, SOS, BC, UTAD, SOW)
### Issue: Missing Expected Events
**Solution:**
- Decrease swing length (Settings → 3)
- Decrease volume multipliers
- Turn OFF volume confirmation
- Check timeframe (use daily chart)
### Issue: False Signals
**Solution:**
- Use higher timeframe
- Wait for confirmation
- Don't trade against major trend
- Look for multiple signal convergence
### Issue: Can't See Background Colors
**Solution:**
- Check "Show Phases" is enabled
- Increase monitor brightness
- Colors are subtle by design (not to obscure price)
### Issue: Volume Shows Incorrectly
**Solution:**
- Ensure volume data is available for your symbol
- Some symbols have poor volume data
- Forex spot pairs have no real volume
- Use futures or stock markets for best results
### Issue: No Trading Range Detected
**Solution:**
- Market may be trending strongly
- Trading range might be too small
- Wait for price to consolidate
- Not all markets have clear ranges
---
## ADVANCED TIPS
### 1. Count Point & Figure Charts
- Wyckoff used P&F to measure "cause"
- Width of range × height = minimum move target
- Longer accumulation = larger markup
### 2. Watch for Absorption
- High volume + narrow spread = someone absorbing
- In downtrend = accumulation
- In uptrend = distribution
### 3. Multiple Timeframe Springs
- Spring on daily + spring on weekly = very strong
- Increases probability significantly
### 4. Failed Signals Are Signals Too
- Failed spring = weakness, expect lower
- Failed UTAD = strength, expect higher
### 5. Context is King
- Don't buy during Phase E Markdown
- Don't sell during Phase E Markup
- Respect the major trend
### 6. Volume Precedes Price
- Study volume changes first
- Price follows volume
- Decreasing volume in range = building energy
### 7. Composite Operator Mindset
- Think like institutions
- Where would smart money buy/sell?
- They need liquidity (retail traders)
---
## RISK MANAGEMENT
### Position Sizing
**Conservative:**
- Risk 1% per trade
- Wider stops at range boundaries
**Moderate:**
- Risk 1-2% per trade
- Stops below spring/above UTAD
**Aggressive:**
- Risk 2-3% per trade
- Tight stops
- Higher win rate needed
### Stop Loss Placement
**Accumulation:**
- Below spring low
- Below trading range bottom
- Below demand zone
**Distribution:**
- Above UTAD high
- Above trading range top
- Above supply zone
### Take Profit Strategy
**Method 1: Measured Move**
- Range height = minimum target
- 2x range height = extended target
**Method 2: Fibonacci Extensions**
- 1.0 = range height
- 1.618 = extended target
- 2.618 = maximum target
**Method 3: Trail the Stop**
- Move stop to breakeven at 1R
- Trail under swing lows in markup
- Lock in profits progressively
---
## BACKTESTING CHECKLIST
Before trading with real money:
- Backtest on 50+ historical examples
- Record all signals in trading journal
- Calculate win rate (aim for >50%)
- Calculate average R:R (aim for >1:2)
- Test on multiple instruments
- Test on multiple timeframes
- Test in different market conditions
- Verify signal consistency
- Practice on demo account
- Start small with real money
---
## RECOMMENDED READING
### Books
1. **"Studies in Tape Reading"** - Richard D. Wyckoff
2. **"The Richard D. Wyckoff Method"** - Rubén Villahermosa
3. **"Charting the Stock Market: The Wyckoff Method"** - Jack Hutson
4. **"Master the Markets"** - Tom Williams (VSA)
### Courses
1. Wyckoff Analytics - Official Wyckoff course
2. TradeVSA - Volume Spread Analysis
3. StockCharts - Wyckoff education
### Communities
1. Wyckoff Analytics Forum
2. Reddit r/Wyckoff
3. TradingView Wyckoff ideas section
---
## FREQUENTLY ASKED QUESTIONS
**Q: Can I use this on crypto?**
A: Yes, works well on major cryptocurrencies with good volume.
**Q: Does it work on forex?**
A: Yes, but use futures volume (like 6E for EUR/USD) for better accuracy.
**Q: What's the best timeframe?**
A: Daily chart for most traders. 4H for more active trading.
**Q: How long does accumulation last?**
A: Typically 2-12 weeks. Longer accumulation = bigger markup.
**Q: Can I automate this?**
A: You can use the alerts, but manual analysis is recommended.
**Q: What's the win rate?**
A: With proper filtering: 60-70% on major signals (Spring, UTAD, SOS, SOW).
**Q: Should I trade every signal?**
A: No. Focus on Spring, UTAD, SOS, and SOW in trending markets.
**Q: What if I see conflicting signals?**
A: Use higher timeframe for context. When in doubt, stay out.
**Q: How do I know which phase I'm in?**
A: Check the table in top-right corner. Also look at background color.
**Q: Can I use this for options trading?**
A: Yes, excellent for timing option entries (especially around Spring/UTAD).
---
## FINAL THOUGHTS
The Wyckoff Method is:
- **A complete trading system** (not just an indicator)
- **Based on 100+ years** of market wisdom
- **Used by institutions** and professional traders
- **Requires practice** and screen time
- **Highly effective** when applied correctly
**Success Tips:**
1. Start with daily charts
2. Focus on major events (SC, Spring, SOS, BC, UTAD, SOW)
3. Always check higher timeframe context
4. Wait for confirmation before entering
5. Manage risk properly
6. Keep a trading journal
7. Be patient - wait for the best setups
**Remember:**
- Not every range will have all events
- Some phases may be abbreviated
- Context and confluence matter most
- Practice makes perfect
---
## SUPPORT & UPDATES
For questions, improvements, or bug reports:
- Check TradingView script comments
- Join Wyckoff trading communities
- Study historical examples
- Practice on demo accounts
**Good luck and happy trading!**
---
*Disclaimer: This indicator is for educational purposes. Always do your own analysis and risk management. Past performance does not guarantee future results.*
# WYCKOFF VISUAL SETUP EXAMPLES
## ACCUMULATION SCHEMATIC #1 (Classic Bottom)
```
Price Chart View:
│ PHASE E
│ MARKUP
│ ╱
│ ╱
┌─SOS─────┤ ╱
│ │ ╱
┌───────────┤ ┌LPS │╱
│ PHASE B │ │ │
│ (Cause) └──┴──────┤
┌AR──┤ │
┌────┤ │ ┌─Spring │ PHASE D
│ └ST──┤ │ │
│ │ │ │
────SC────────┴─────────┴───────────┴──────────
│
PS
│ PHASE A
│
Downtrend
```
### PHASE A - Stopping the Downtrend
```
PS: │ High volume down bar
▼ First sign of support
■ Not bottom yet
SC: │ VERY HIGH volume
▼ Panic selling exhaustion
█ Long lower wick
█ This is the low
AR: │ Automatic rally
▲ Relief bounce
■ High volume acceptable
ST: │ Secondary test
▼ Low volume (KEY!)
■ Tests SC low
```
### PHASE B - Building the Cause
```
┌─────────┐
│ ~~~ │ Multiple tests
│ ~ ~ │ Volume decreases
│~ ~ │ Range gets tighter
└─────────┘
Duration: 2-12 weeks typical
The longer, the bigger the eventual move
```
### PHASE C - The Test (SPRING)
```
║ False breakdown
─────╨─────
▼ Low volume
█ Breaks below support
■
█ Quick reversal
▲ Closes ABOVE support
CRITICAL: Volume must be LOW
Close must be strong
Happens quickly (1-3 bars)
```
### PHASE D - Strength Emerges
```
SOS: ▲ Sign of Strength
────╥──── Break above resistance
║ High volume
║ Wide spread
LPS: ▼ Last Point Support
■ Pullback on LOW volume
▲ Great entry point
BU: ▲ Backup
■ Final consolidation
▲ Before markup
```
### PHASE E - Markup
```
╱
╱
╱ Strong uptrend
╱ High momentum
╱ Can last months/years
──╱──
```
---
## DISTRIBUTION SCHEMATIC #2 (Classic Top)
```
Price Chart View:
Uptrend
│
PSY
│ PHASE A
────BC────────┬─────────┬───────────┬──────────
│ │ UTAD │
│ PHASE B │ │ PHASE D
┌AR──┤ ┌LPSY │ │
│ │ │ └───────────┤
│ └──┴──────┐ │╲
└ST──┤ │ │ ╲
│ └───────────┤ ╲
└─SOW─────┤ │ ╲
│ │ ╲
│ PHASE C │ ╲
│ │ PHASE E
│ │ MARKDOWN
```
### PHASE A - Stopping the Uptrend
```
PSY: │ High volume up bar
▲ Preliminary supply
■ Selling starting
BC: │ VERY HIGH volume
▲ Buying climax
█ Euphoric top
█ Long upper wick
AR: │ Automatic reaction
▼ Sharp selloff
■ High volume
ST: │ Secondary test
▲ Low volume (KEY!)
■ Tests BC high
```
### PHASE C - The Test (UTAD)
```
▲ False breakout
────╥────
║ Breaks ABOVE resistance
║ Often high volume spike
▼
█ Rejection / weak close
█ Closes BELOW resistance
▼
CRITICAL: Closes weak
Quick rejection
Traps buyers
```
### PHASE D - Weakness Emerges
```
SOW: ▼ Sign of Weakness
────╨──── Break below support
║ High volume
║ Wide spread
LPSY: ▲ Last Point Supply
■ Rally on LOW volume
▼ Last chance to exit
```
---
## VOLUME PATTERNS (Critical to Understanding)
### ACCUMULATION Volume Pattern
```
Volume
│ SC
█
█ ST
■ ■ Spring
■ ■ ■ SOS LPS
──┴────┴────┴──────█───■────►
│ │ │ │ │
│ │ │ │ │
A A C D D
Pattern: HIGH → low → low → HIGH → low
Key: Volume DECREASES during range
INCREASES on breakout
```
### DISTRIBUTION Volume Pattern
```
Volume
│ BC
█
█ ST
■ ■ UTAD
■ ■ ■ SOW LPSY
──┴────┴────┴──────█───■────►
│ │ │ │ │
│ │ │ │ │
A A C D D
Pattern: HIGH → low → varies → HIGH → low
Key: Volume MAY increase on UTAD
Definitely HIGH on breakdown (SOW)
```
---
## REAL TRADE SETUPS
### Setup #1: SPRING BUY
```
Entry Conditions:
1. Clear trading range identified
2. Price breaks BELOW support
3. Volume is LOW (critical!)
4. Price reverses QUICKLY
5. Closes ABOVE support level
Entry: Next bar or on retest
Stop: Below spring low
Target: Top of range (minimum)
Example:
Support: $100
Spring low: $98 (low volume)
Close: $101
Entry: $102
Stop: $97.50
Target: $120 (range top)
Risk/Reward: 1:4
```
### Setup #2: UTAD SELL
```
Entry Conditions:
1. Clear trading range identified (after uptrend)
2. Price breaks ABOVE resistance
3. Often high volume spike
4. Price reverses QUICKLY
5. Closes BELOW resistance level
Entry: Next bar or on retest
Stop: Above UTAD high
Target: Bottom of range (minimum)
Example:
Resistance: $200
UTAD high: $205 (spike)
Close: $198
Entry: $197
Stop: $206
Target: $180 (range bottom)
Risk/Reward: 1:2
```
### Setup #3: SOS BREAKOUT
```
Entry Conditions:
1. Clear accumulation range
2. Spring already occurred (ideal)
3. Price breaks ABOVE resistance
4. HIGH volume on breakout
5. Wide spread up bar
Entry Option A: On breakout ($120)
Entry Option B: Wait for LPS pullback ($115)
Stop: Below range or LPS
Target: Range height projected up
Example:
Range: $100-$120 (20 points)
SOS breakout: $120
Entry A: $120
Stop: $115
Target 1: $140 (100%)
Target 2: $150 (150%)
```
---
## VSA SPECIFIC PATTERNS
### Pattern 1: No Demand (Weakness)
```
▲
■ Up bar
■ Low volume ◄── KEY
▲ Small body
Context: After uptrend
Meaning: Buyers exhausted
Action: Prepare to sell
```
### Pattern 2: No Supply (Strength)
```
▼
■ Down bar
■ Low volume ◄── KEY
▼ Small body
Context: After downtrend
Meaning: Sellers exhausted
Action: Prepare to buy
```
### Pattern 3: Stopping Volume
```
═ Very high volume
█ Narrow spread ◄── KEY
═ Price not moving
Context: At extremes
Meaning: Absorption
Action: Expect reversal
```
---
## COMMON MISTAKES (What NOT to Do)
### ❌ Mistake 1: Buying Prematurely
```
WRONG:
SC
▼
█ ← DON'T BUY HERE
CORRECT:
Spring
─────╨─────
▼
█ ← BUY HERE
▲
```
### ❌ Mistake 2: Ignoring Volume
```
WRONG: "It broke below support, must be spring"
─────╨───── High volume
█
This is a BREAKDOWN, not a spring!
CORRECT Spring:
─────╨───── LOW volume ✓
■ Quick reversal ✓
▲
```
### ❌ Mistake 3: Trading Against Trend
```
WRONG:
Markdown Phase E
╲
╲ ← Trying to buy here
╲
╲
CORRECT:
Wait for new accumulation to complete
```
---
## MULTI-TIMEFRAME EXAMPLE
### Weekly Chart: Phase E Markup (Bullish)
```
╱
╱
╱ Long-term uptrend
╱
───╱─────
```
### Daily Chart: Re-Accumulation Phase C
```
┌─────────┐
│ Spring │ ← We are here
│ ▼ │
─────┴────█────┴─────
▲
```
### 4-Hour Chart: Entry Timing
```
Last 48 hours:
─────╨───── Spring occurred
█
▲ ← Enter now
■
```
**Result:** Triple confirmation across timeframes = High probability trade
---
## PROFIT TARGETS (Visual Guide)
### Method 1: Basic Measured Move
```
Resistance: 120 ┐ ─────────
│
│ 20 points
│
Support: 100 ┘ ─────────
Breakout: 120
Target: 120 + 20 = 140
╱╱╱ 140 (Target)
╱╱╱
╱╱╱
──────◄ 120 (Breakout)
│
Range │ 20
│
──────┘ 100
```
### Method 2: Multiple Targets
```
╱╱╱ 150 (Target 3: 2.5x) - 20% position
╱╱╱
╱╱╱ 140 (Target 2: 2x) - 30% position
╱╱╱
─────◄╱ 130 (Target 1: 1x) - 50% position
│
10 │ 120 (Breakout)
│
─────┘ 110 (Support)
```
### Method 3: Trailing Stop
```
1. Move stop to breakeven at Target 1
2. Trail stop under swing lows
3. Let winners run
╱╱╱
╱ ╱╱ ← Trail stop here
╱╱ ╱
╱ ╱ ← Then here
─────◄──╱
← Start here (breakeven)
```
---
## TIMING ENTRIES (Exact Bar Patterns)
### Perfect Spring Entry
```
Bar 1: ▼ Breaks below (Low vol)
█
Bar 2: ▲ Reverses (Closes strong)
█ ◄─ ENTER HERE
Bar 3: ■ Confirms
▲
DON'T WAIT for Bar 3!
Enter on Bar 2 close
```
### Perfect UTAD Entry
```
Bar 1: ▲ Breaks above (Spike vol OK)
█
Bar 2: ▼ Reverses (Closes weak)
█ ◄─ ENTER HERE
Bar 3: ■ Confirms
▼
SHORT on Bar 2 close
Don't wait for more confirmation
```
---
## COMPOSITE OPERATOR PSYCHOLOGY
### What Smart Money Does (Follow Them)
**Accumulation:**
```
1. Create fear (PS, SC)
2. Shake out weak hands (Spring)
3. Absorb supply quietly (Phase B)
4. Test for remaining supply (Test)
5. Mark it up (SOS → Phase E)
💰 They buy LOW when retail panics
```
**Distribution:**
```
1. Create euphoria (PSY, BC)
2. Trap late buyers (UTAD)
3. Distribute to buyers (Phase B)
4. Test for remaining demand (ST)
5. Mark it down (SOW → Phase E)
💰 They sell HIGH when retail buys
```
### Where to Look for Smart Money
```
💰 Buy signals appear at:
- Demand zones (green boxes)
- Springs and shakeouts
- Tests of support
- After selling climax
💰 Sell signals appear at:
- Supply zones (red boxes)
- UTAD and upthrusts
- Weak rallies (LPSY)
- After buying climax
```
---
## PRACTICE EXERCISES
### Exercise 1: Identify the Phase
Look at any chart and ask:
1. Is there a trading range? (Phase B likely)
2. Did we just stop a trend? (Phase A)
3. Was there a spring/UTAD? (Phase C)
4. Is there a breakout? (Phase D)
5. Is trend running? (Phase E)
### Exercise 2: Volume Analysis
For each bar, note:
- Volume level (High/Normal/Low)
- Spread (Wide/Normal/Narrow)
- Effort vs Result (Matching? Diverging?)
### Exercise 3: Find Historical Springs
Go back 6 months:
- Mark all springs you can find
- Note the setup before each
- Track what happened after
- Calculate win rate
---
## FINAL VISUALIZATION: The Complete Cycle
```
ACCUMULATION → MARKUP → DISTRIBUTION → MARKDOWN → ACCUMULATION...
Distribution Accumulation
(Top) (Bottom)
┌───────────────┐ ┌───────────────┐
│ BC UTAD │ │ Spring SC │
│ │ │ │ │ │ │ │
────┴───┴───┴───────┴─╲ ╱────────┴───┴───┴────
╲ ╱
Markdown ╲ ╱ Markup
(Phase E) ╲ ╱ (Phase E)
╲ ╱
╲ ╱
╲ ╱
╲ ╱
V
The market cycles endlessly
Your job: Identify where you are in the cycle
Trade accordingly
```
---
**Remember:**
- 📊 Study charts daily
- 📝 Journal every setup
- 🎯 Wait for the best signals
- 💰 Follow smart money
- ⏰ Be patient
- 🚀 Let winners run
**The indicator does the heavy lifting - you make the decisions!**
Nexural ORB Nexural ORB - Multi-Timeframe Opening Range Breakout Indicator
Introduction
This indicator was built out of frustration. After testing dozens of ORB tools, both free and paid, I found that most of them either did too little or cluttered the chart with unnecessary information. The Opening Range Breakout is one of the oldest and most reliable intraday strategies, yet most indicators treat it as an afterthought - just a box on the chart with no context.
This is not that kind of indicator.
The Nexural Ultimate ORB tracks the Opening Range across three timeframes simultaneously, provides quality scoring to help you identify high-probability setups, detects when multiple levels align for confluence, and now includes historical ORB data so you can scroll back and review previous sessions. It does not tell you when to buy or sell. It does not promise profits. What it does is give you clean, accurate levels with the context you need to make informed decisions.
I am going to be completely transparent about what this indicator does, how it works, what it does well, and where it falls short. If you are looking for a magic solution that prints money, this is not it. If you are looking for a professional-grade tool that will become a permanent part of your charting setup, keep reading.
What Is The Opening Range Breakout
Before diving into the indicator itself, let me explain the strategy it is built around.
The Opening Range is simply the high and low price established during the first portion of the trading session. For US equities and futures, this typically begins at 9:30 AM Eastern Time. The theory behind trading the Opening Range is straightforward: the first 15, 30, or 60 minutes of trade often sets the tone for the rest of the day. Institutional traders, algorithms, and market makers are all actively positioning during this window, and the levels they establish become reference points for the remainder of the session.
When price breaks above the Opening Range High, it suggests bullish momentum and the potential for continuation higher. When price breaks below the Opening Range Low, it suggests bearish momentum and the potential for continuation lower. The strategy has been used by floor traders for decades and remains relevant today because the underlying market dynamics have not changed - the open is when the most information gets priced in, and the levels established during that period matter.
This indicator does not trade the ORB for you. It identifies the levels, tracks multiple timeframes, and provides context. The actual trading decisions are yours.
How The Opening Range Is Calculated
The indicator calculates the Opening Range for three timeframes:
The 15-Minute ORB captures the high and low from 9:30 AM to 9:45 AM. This is the shortest timeframe and typically produces the tightest range. Breakouts from the 15-minute ORB tend to occur earliest in the session and can provide early directional signals, though they are also more prone to false breakouts due to the narrow range.
The 30-Minute ORB captures the high and low from 9:30 AM to 10:00 AM. This is considered by many institutional traders to be the most significant timeframe. The 30-minute window allows enough time for the initial volatility to settle while still capturing the core opening activity. Many professional trading desks reference the 30-minute ORB as their primary intraday framework.
The 60-Minute ORB captures the high and low from 9:30 AM to 10:30 AM. This is the widest range and produces fewer signals, but those signals tend to be more reliable. The 60-minute ORB is particularly useful on high-volatility days when the 15 and 30-minute ranges get quickly violated.
The calculation itself is simple. As each bar completes during the opening period, the indicator compares the current high and low to the stored values and updates them if new extremes are reached. Once the timeframe completes, the levels lock in and do not change for the rest of the session.
I want to be absolutely clear about one thing: there is no repainting. The ORB levels are calculated in real-time as the opening period develops. Once a timeframe completes, those levels are final. You will not look back at your chart and see different levels than what appeared in real-time. This is critically important for any indicator you use for actual trading decisions.
Visual Hierarchy and Line Styles
One of the main problems with multi-timeframe indicators is visual clutter. When you have six lines on the chart representing three different ORBs, it becomes difficult to quickly identify which level belongs to which timeframe.
This indicator solves that problem through a clear visual hierarchy. Each timeframe has its own color, line width, and line style, all of which are fully customizable.
By default, the 15-Minute ORB uses solid lines with the heaviest weight. This makes it the most prominent on the chart because it is typically the first level to be tested and often the most actively traded.
The 30-Minute ORB uses dashed lines with a medium weight. This keeps it visible but clearly secondary to the 15-minute levels.
The 60-Minute ORB uses dotted lines with a medium weight. This places it in the background as a reference level rather than an active trading zone.
You can change any of these settings. If you prefer to trade the 30-minute ORB exclusively, you can make it solid and bold while keeping the others subtle. If you only want to see the 60-minute ORB, you can disable the other two entirely. The flexibility is there because every trader has different preferences.
The dashboard in the top right corner of the chart displays the corresponding line style next to each timeframe, so you always know which line on the chart matches which row in the dashboard.
The Quality Scoring System
Not every Opening Range is worth trading. Some days produce tight, clean ranges with strong follow-through. Other days produce wide, choppy ranges that lead to multiple false breakouts. One of the most valuable features of this indicator is the Quality Score, which grades each session from A-plus down to C.
The Quality Score is calculated based on several factors:
Range Size is the most important factor. The indicator compares the current ORB range to the average daily range over the past 20 sessions. A tight range, defined as less than 40 percent of the average daily range, receives the highest score. The logic here is simple: tight ranges indicate consolidation, and consolidation often precedes expansion. When the ORB is tight, a breakout has more room to run.
A normal range, between 40 and 80 percent of the average daily range, receives a moderate score. These are typical trading days without any particular edge from a range perspective.
A wide range, greater than 80 percent of the average daily range, receives the lowest score. When the ORB is already wide, much of the day's move may have already occurred during the opening period, leaving less opportunity for breakout continuation.
Volume is the second factor. Above-average volume during the opening period indicates genuine institutional participation. The indicator compares the current volume to the 20-bar average. Significantly elevated volume adds to the quality score, while below-average volume does not penalize the score but does not help it either.
Day of Week matters more than most traders realize. Statistical studies of market behavior consistently show that Tuesday, Wednesday, and Thursday produce cleaner trending days than Monday or Friday. Monday mornings often see erratic price action as the market digests weekend news and repositions. Friday afternoons often see reduced participation as traders close out positions before the weekend. The quality score reflects these tendencies by adding points for mid-week sessions and subtracting points for Monday mornings and Friday afternoons.
Overnight Activity is relevant primarily for futures traders. If the overnight session produced a significant range, defined as greater than half of the average true range, it suggests that institutions were active during the overnight hours. This often leads to more directional behavior during the regular session.
The quality score is displayed in the dashboard as a letter grade. A-plus indicates excellent conditions across multiple factors. A indicates good conditions. B indicates average conditions. C indicates below-average conditions that warrant caution.
I want to be honest about the limitations of this system. The quality score is a guideline, not a guarantee. A C-rated day can still produce a profitable breakout. An A-plus day can still result in a failed breakout that reverses. The score helps you calibrate your expectations and position sizing, but it does not predict the future.
Confluence Detection
Confluence occurs when multiple significant price levels cluster together within a tight range. When the 15-minute ORB high aligns with the overnight high, or when the ORB low sits right at the session opening price, you have confluence. These zones tend to produce stronger reactions because multiple types of traders are watching the same level.
The indicator automatically detects confluence using a tolerance-based system. By default, the tolerance is set to 0.15 percent of price. This means that if two levels are within 0.15 percent of each other, they are considered confluent.
The levels that are checked for confluence include the Session Opening Price, which is the exact price at 9:30 AM. This level matters because it represents the point where the market transitioned from overnight to regular session trading. Many traders reference the opening print throughout the day.
The Overnight High and Low are also checked. For futures markets, this includes all trading from 6:00 PM the previous evening through 9:29 AM. For stocks, this includes extended hours trading. These levels represent the extremes established before the regular session began.
Finally, the indicator checks whether the ORB levels from different timeframes align with each other. When the 15-minute high matches the 30-minute high, that level gains additional significance.
When confluence is detected, two things happen on the chart. First, the affected ORB line changes color to gold, making it visually obvious that this level has additional significance. Second, the dashboard displays a Confluence row at the bottom, alerting you to the condition.
The Confluence label also appears directly on the chart, positioned within the ORB zone so you can immediately see where the confluence exists.
Smart Label System
A common problem with indicators that display multiple price levels is label overlap. When you have six ORB levels plus auxiliary levels like the session open and overnight high and low, the right side of the chart can become a cluttered mess of overlapping text.
This indicator solves that problem with a smart labeling system that combines matching levels. If the 15-minute low, 30-minute low, and 60-minute low are all at the same price, instead of displaying three separate labels, the indicator displays a single label that reads 15L/30L/60L followed by the price.
The system uses a tolerance of 2 percent of the ORB range to determine whether levels are close enough to combine. This keeps the labels clean while still displaying separate labels when levels are meaningfully different.
The labels are positioned to the right of the current price action, extending beyond the last bar so they remain visible as new bars form. Each label includes the level identifier and the exact price value.
Historical ORB Display
This feature addresses one of the most common limitations of ORB indicators: the inability to see previous sessions when scrolling back through your chart.
With the history feature enabled, the indicator stores ORB data for up to 20 previous sessions. When you scroll back in time, you will see the ORB levels for each historical session, drawn from the session start to the session end.
Historical ORBs are displayed with slightly faded colors, using 50 percent transparency compared to the current session. This creates a clear visual distinction between current and historical levels while still allowing you to analyze past price action relative to those levels.
The history depth is configurable. You can set it anywhere from 1 to 20 days depending on your needs. If you primarily care about the current session and the previous day for context, set it to 1 or 2. If you want to analyze an entire week or more of ORB behavior, increase the setting.
You can also disable the history feature entirely by enabling Current Session Only mode. This returns the indicator to showing only the active session, which some traders prefer for a cleaner chart during live trading.
Breakout Detection and Filters
The indicator marks breakouts with triangle signals. A green triangle below the bar indicates a bullish breakout above the ORB high. A red triangle above the bar indicates a bearish breakout below the ORB low.
However, not every crossing of an ORB level represents a valid breakout worth acting on. The indicator includes several filters to reduce false signals.
The Volume Filter requires that volume on the breakout bar be at least 1.2 times the 20-bar average volume. You can adjust this multiplier in the settings. The logic is straightforward: breakouts on weak volume are more likely to fail. A genuine breakout that is going to follow through should be accompanied by above-average participation.
The Time Filter prevents breakout signals after a specified hour. The default is 2:00 PM Eastern. The rationale is that late-session breakouts often lack follow-through because there is not enough trading time remaining for the move to develop. You can adjust or disable this filter based on your trading style.
The Single Trigger mechanism ensures that each breakout fires exactly once per session. If price crosses above the ORB high, you will see one bullish signal on the bar where the crossing occurred. If price subsequently pulls back and crosses above again, you will not see a second signal. This prevents signal spam and keeps your chart clean.
The indicator also includes Reclaim Detection. If price breaks out and then returns back inside the ORB zone, you will see a warning signal marked with an X. This condition often indicates a failed breakout and potential reversal. It is not a trade signal, but rather information that the breakout you just witnessed may not be valid.
Range Extensions
Once the ORB is established, many traders look for profit targets based on the range itself. The indicator includes extension levels that project multiples of the ORB range above and below the extremes.
By default, two extension levels are shown: 1.0 times the range and 1.5 times the range. If the 15-minute ORB is 50 points, the 1.0 extension above the high would be 50 points above the high, and the 1.5 extension would be 75 points above the high.
These extensions serve as potential profit targets for breakout trades. The 1.0 extension represents a measured move equal to the ORB itself. The 1.5 extension represents a slightly more ambitious target.
You can adjust the extension multipliers in the settings. Some traders prefer 0.5 and 1.0. Others prefer 1.0 and 2.0. The flexibility is there to match your trading approach.
The extension lines are displayed as faint dotted lines so they do not compete visually with the ORB levels themselves. The labels show the multiplier value along with the exact price.
## The Midline
The 50 percent level of the ORB, known as the midline, is displayed as a dashed line within the ORB zone. This level matters because it often acts as short-term support or resistance during consolidation periods within the range.
When price is trading inside the ORB and approaches the midline, you may see a reaction. The midline can also serve as a reference for whether price is showing strength or weakness within the range. If price is spending most of its time above the midline, that suggests a bullish bias even before a breakout occurs. If price is spending most of its time below the midline, that suggests a bearish bias.
The midline can be disabled in the settings if you prefer a cleaner chart.
The Dashboard
The dashboard is positioned in the top right corner of the chart and provides all relevant ORB information at a glance.
The header row displays the indicator name, the current Quality Score grade, the Range Classification, and the Session Status.
The Range Classification shows whether the current 15-minute ORB is Tight, Normal, or Wide compared to the 20-day average. This gives you immediate context about whether the range is unusual in either direction.
The Session Status shows whether the market is currently in session or closed. A green Live indicator means the session is active. A red Closed indicator means the session has ended.
Below the header, each timeframe row displays the following information:
The Timeframe column shows 15m, 30m, or 60m along with a visual indicator of the line style you have selected for that timeframe.
The High column displays the ORB high price for that timeframe.
The Low column displays the ORB low price for that timeframe.
The Range column displays the distance between high and low.
The Status column shows the current state. Before the ORB completes, this shows a countdown of minutes remaining. After completion, it shows whether the price has broken out bullish, broken out bearish, or remains in range.
Below the timeframe rows, the Distance row shows how far the current price is from the nearest ORB level. This helps you gauge whether price is approaching a potential breakout zone.
If confluence is detected, a highlighted row appears at the bottom of the dashboard indicating that significant level alignment exists.
Supported Markets and Sessions
The indicator supports multiple market types with appropriate session times:
US Stocks use a session from 9:30 AM to 4:00 PM Eastern.
US Futures use a session from 9:30 AM to 4:00 PM Eastern, with overnight tracking from 6:00 PM the previous evening.
Forex uses a 24-hour session since the market trades continuously.
Crypto uses a 24-hour session since the market trades continuously.
Custom allows you to define your own session times for markets not covered by the presets.
The timezone is configurable. The default is America/New_York, but you can change it to Chicago, Los Angeles, London, Tokyo, or UTC depending on your location and preference.
Settings Overview
The settings are organized into logical groups:
General settings include the market type, current session only toggle, and history days.
Session settings include custom session times and timezone selection.
ORB Timeframes settings include individual toggles for showing or hiding each timeframe, color selection, line width, and line style. This is where you customize the visual appearance of each ORB level.
Quality Scoring settings include the ATR period and range comparison lookback. These affect how the quality score is calculated.
Confluence Detection settings include the tolerance percentage and toggles for the session open and overnight high and low levels.
Breakout Settings include the volume filter toggle and multiplier, time filter toggle and cutoff hour, and reclaim detection toggle.
Visuals settings include toggles for the fill zone, labels, dashboard, distance display, and midline.
Extensions settings include toggles for showing extensions and the multiplier values for each extension level.
How I Use This Indicator
I will share my personal approach, though you should adapt it to your own style.
First, I wait for the ORB to complete. I do not trade during the first 15 to 30 minutes of the session. The levels are still forming, and the price action during this window is often erratic. I let the dust settle and the range establish itself.
Second, I check the Quality Score. If it is an A or A-plus day with a tight range and good volume, I am more aggressive. If it is a C day with a wide range on a Friday afternoon, I am either sitting on my hands or trading with reduced size.
Third, I look for confluence. If the 15-minute high is sitting right at the overnight high, that level has additional significance. Breakouts through confluence zones tend to be more decisive.
Fourth, I confirm with volume. Even though the indicator filters for volume, I still glance at the volume bars. I want to see that breakout candle have conviction.
Fifth, I manage expectations based on range type. If the ORB is tight, I expect an explosive move and give the trade room to develop. If the ORB is wide, I expect choppier action and tighten my parameters.
Sixth, I use the distance reading. If price is already 50 points beyond the ORB high and the range was only 40 points, I have missed the move. Chasing extended price is not smart trading.
Honest Pros and Cons
What this indicator does well:
It provides clean, accurate ORB levels that do not repaint. This is the foundation, and it is done correctly.
It offers multi-timeframe tracking with clear visual differentiation. You can see all three ORBs at once without confusion.
The quality scoring system helps you avoid low-probability setups. It is not perfect, but it adds valuable context.
The confluence detection highlights significant level alignment automatically. This saves you from manually checking multiple levels.
The smart label system prevents visual clutter. Labels combine when appropriate and remain readable.
The historical ORB display allows you to scroll back and review previous sessions. This is valuable for analysis and pattern recognition.
The customization is extensive. Every visual element can be adjusted to match your preferences.
It works across stocks, futures, forex, and crypto with appropriate session handling.
What this indicator does not do:
It does not give you buy and sell signals with entries and exits. This is a levels and analysis tool, not a trading system.
It does not include backtesting or performance tracking. You need a separate strategy tester for that.
It does not guarantee that breakouts will follow through. The filters help, but failed breakouts still occur.
The quality score is a guideline, not a prediction. Low-quality days can still produce good trades. High-quality days can still produce losing trades.
The confluence detection is proximity-based. It identifies when levels are near each other but does not know if those levels are actually significant to other traders.
Technical limitations to be aware of:
On chart timeframes larger than 15 minutes, the ORB calculation becomes less precise because you have fewer bars in the opening period. This indicator works best on 1 to 15 minute charts.
The overnight high and low tracking works best on futures. Stocks do not have true overnight sessions in the same way.
If your chart does not have volume data, the volume filter will not function properly.
Risk Management
This section is not about the indicator. It is about trading.
No indicator, no matter how well designed, can protect you from poor risk management. Before you trade any ORB breakout, you need to define your risk.
Where is your stop? A common approach is to place the stop on the opposite side of the ORB zone. If you are taking a bullish breakout above the high, your stop goes below the low. This means your risk is the full ORB range plus any slippage.
Is that risk acceptable? If the ORB range is 100 points and you are trading a 50 dollar per point contract, your risk is 5000 dollars plus commissions. Can you afford that loss? If not, either reduce your size or skip the trade.
Where is your target? The extensions provide potential targets, but you need to decide in advance where you will take profits. Hoping for an unlimited run while watching your profits evaporate is not a strategy.
What is your win rate? ORB breakouts do not work every time. Depending on the market and conditions, you might win 50 to 60 percent of the time. That means you will have losing trades. Are you prepared for a string of three or four losers in a row? It will happen.
None of this is specific to this indicator. It applies to all trading. But I include it here because I see too many traders focus on the indicator while ignoring the fundamentals of risk management. The indicator can help you identify setups. It cannot manage your risk for you.
Final Thoughts
I built this indicator for my own trading, then refined it to the point where I felt comfortable sharing it. It is not a holy grail. It will not make you profitable if you do not already have a trading process. What it will do is give you clean, accurate ORB levels with context that most indicators do not provide.
The Opening Range Breakout works because institutions and algorithms reference these same levels. When the first 30 or 60 minutes of trading establishes a range, that becomes a reference point for the rest of the session. This indicator makes those levels visible and adds intelligence around when they are worth paying attention to.
Use it as a tool, not a crutch. Combine it with your own analysis. Manage your risk properly. And please, do not trade with money you cannot afford to lose.
If you have questions or feedback, I am actively maintaining this indicator and will consider feature requests for future updates.
Trade well.
Tags
ORB, Opening Range Breakout, Intraday, Day Trading, Futures, Stocks, Multi-Timeframe, Breakout, Support Resistance, Session, NQ, ES, SPY, QQQ, Opening Range, Institutional Levels
Recommended Timeframes
This indicator works best on 1-minute, 2-minute, 3-minute, 5-minute, 10-minute, and 15-minute charts. It can be used on higher timeframes, but the ORB calculation becomes less precise.
Recommended Markets
US Stock Indices and Futures including ES, NQ, YM, RTY, SPY, QQQ, DIA, IWM. Individual stocks with sufficient liquidity. Forex major pairs. Cryptocurrency with defined trading sessions.
Kernel Market Dynamics [WFO - MAB]Kernel Market Dynamics
⚛️ CORE INNOVATION: KERNEL-BASED DISTRIBUTION ANALYSIS
The Kernel Market Dynamics system represents a fundamental departure from traditional technical indicators. Rather than measuring price levels, momentum, or oscillator extremes, KMD analyzes the statistical distribution of market returns using advanced kernel methods from machine learning theory. This allows the system to detect when market behavior has fundamentally changed—not just when price has moved, but when the underlying probability structure has shifted.
The Distribution Hypothesis:
Traditional indicators assume markets move in predictable patterns. KMD assumes something more profound: markets exist in distinct distributional regimes , and profitable trading opportunities emerge during regime transitions . When the distribution of recent returns diverges significantly from the historical baseline, the market is restructuring—and that's when edge exists.
Maximum Mean Discrepancy (MMD):
At the heart of KMD lies a sophisticated statistical metric called Maximum Mean Discrepancy. MMD measures the distance between two probability distributions by comparing their representations in a high-dimensional feature space created by a kernel function.
The Mathematics:
Given two sets of normalized returns:
• Reference period (X) : Historical baseline (default 100 bars)
• Test period (Y) : Recent behavior (default 20 bars)
MMD is calculated as:
MMD² = E + E - 2·E
Where:
• E = Expected kernel similarity within reference period
• E = Expected kernel similarity within test period
• E = Expected cross-similarity between periods
When MMD is low : Test period behaves like reference (stable regime)
When MMD is high : Test period diverges from reference (regime shift)
The final MMD value is smoothed with EMA(5) to reduce single-bar noise while maintaining responsiveness to genuine distribution changes.
The Kernel Functions:
The kernel function defines how similarity is measured. KMD offers four mathematically distinct kernels, each with different properties:
1. RBF (Radial Basis Function / Gaussian):
• Formula: k(x,y) = exp(-d² / (2·σ²·scale))
• Properties: Most sensitive to distribution changes, smooth decision boundaries
• Best for: Clean data, clear regime shifts, low-noise markets
• Sensitivity: Highest - detects subtle changes
• Use case: Stock indices, major forex pairs, trending environments
2. Laplacian:
• Formula: k(x,y) = exp(-|d| / σ)
• Properties: Medium sensitivity, robust to moderate outliers
• Best for: Standard market conditions, balanced noise/signal
• Sensitivity: Medium - filters minor fluctuations
• Use case: Commodities, standard timeframes, general trading
3. Cauchy (Default - Most Robust):
• Formula: k(x,y) = 1 / (1 + d²/σ²)
• Properties: Heavy-tailed, highly robust to outliers and spikes
• Best for: Noisy markets, choppy conditions, crypto volatility
• Sensitivity: Lower - only major distribution shifts trigger
• Use case: Cryptocurrencies, illiquid markets, volatile instruments
4. Rational Quadratic:
• Formula: k(x,y) = (1 + d²/(2·α·σ²))^(-α)
• Properties: Tunable via alpha parameter, mixture of RBF kernels
• Alpha < 1.0: Heavy tails (like Cauchy)
• Alpha > 3.0: Light tails (like RBF)
• Best for: Adaptive use, mixed market conditions
• Use case: Experimental optimization, regime-specific tuning
Bandwidth (σ) Parameter:
The bandwidth controls the "width" of the kernel, determining sensitivity to return differences:
• Low bandwidth (0.5-1.5) : Narrow kernel, very sensitive
- Treats small differences as significant
- More MMD spikes, more signals
- Use for: Scalping, fast markets
• Medium bandwidth (1.5-3.0) : Balanced sensitivity (recommended)
- Filters noise while catching real shifts
- Professional-grade signal quality
- Use for: Day/swing trading
• High bandwidth (3.0-10.0) : Wide kernel, less sensitive
- Only major distribution changes register
- Fewer, stronger signals
- Use for: Position trading, trend following
Adaptive Bandwidth:
When enabled (default ON), bandwidth automatically scales with market volatility:
Effective_BW = Base_BW × max(0.5, min(2.0, 1 / volatility_ratio))
• Low volatility → Tighter bandwidth (0.5× base) → More sensitive
• High volatility → Wider bandwidth (2.0× base) → Less sensitive
This prevents signal flooding during wild markets and avoids signal drought during calm periods.
Why Kernels Work:
Kernel methods implicitly map data to infinite-dimensional space where complex, nonlinear patterns become linearly separable. This allows MMD to detect distribution changes that simpler statistics (mean, variance) would miss. For example:
• Same mean, different shape : Traditional metrics see nothing, MMD detects shift
• Same volatility, different skew : Oscillators miss it, MMD catches it
• Regime rotation : Price unchanged, but return distribution restructured
The kernel captures the entire distributional signature —not just first and second moments.
🎰 MULTI-ARMED BANDIT FRAMEWORK: ADAPTIVE STRATEGY SELECTION
Rather than forcing one strategy on all market conditions, KMD implements a Multi-Armed Bandit (MAB) system that learns which of seven distinct strategies performs best and dynamically selects the optimal approach in real-time.
The Seven Arms (Strategies):
Each arm represents a fundamentally different trading logic:
ARM 0 - MMD Regime Shift:
• Logic: Distribution divergence with directional bias
• Triggers: MMD > threshold AND direction_bias confirmed AND velocity > 5%
• Philosophy: Trade the regime transition itself
• Best in: Volatile shifts, breakout moments, crisis periods
• Weakness: False alarms in choppy consolidation
ARM 1 - Trend Following:
• Logic: Aligned EMAs with strong ADX
• Triggers: EMA(9) > EMA(21) > EMA(50) AND ADX > 25
• Philosophy: Ride established momentum
• Best in: Strong trending regimes, directional markets
• Weakness: Late entries, whipsaws at reversals
ARM 2 - Breakout:
• Logic: Bollinger Band breakouts with volume
• Triggers: Price crosses BB outer band AND volume > 1.2× average
• Philosophy: Capture volatility expansion events
• Best in: Range breakouts, earnings, news events
• Weakness: False breakouts in ranging markets
ARM 3 - RSI Mean Reversion:
• Logic: RSI extremes with reversal confirmation
• Triggers: RSI < 30 with uptick OR RSI > 70 with downtick
• Philosophy: Fade overbought/oversold extremes
• Best in: Ranging markets, mean-reverting instruments
• Weakness: Fails in strong trends, catches falling knives
ARM 4 - Z-Score Statistical Reversion:
• Logic: Price deviation from 50-period mean
• Triggers: Z-score < -2 (oversold) OR > +2 (overbought) with reversal
• Philosophy: Statistical bounds reversion
• Best in: Stable volatility regimes, pairs trading
• Weakness: Trend continuation through extremes
ARM 5 - ADX Momentum:
• Logic: Strong directional movement with acceleration
• Triggers: ADX > 30 with DI+ or DI- strengthening
• Philosophy: Momentum begets momentum
• Best in: Trending with increasing velocity
• Weakness: Late exits, momentum exhaustion
ARM 6 - Volume Confirmation:
• Logic: OBV trend + volume spike + candle direction
• Triggers: OBV > EMA(20) AND volume > average AND bullish candle
• Philosophy: Follow institutional money flow
• Best in: Liquid markets with reliable volume
• Weakness: Manipulated volume, thin markets
Q-Learning with Rewards:
Each arm maintains a Q-value representing its expected reward. After every bar, the system calculates a reward based on the arm's signal and actual price movement:
Reward Calculation:
If arm signaled LONG:
reward = (close - close ) / close
If arm signaled SHORT:
reward = -(close - close ) / close
If arm signaled NEUTRAL:
reward = 0
Penalty multiplier: If loss > 0.5%, reward × 1.3 (punish big losses harder)
Q-Value Update (Exponential Moving Average):
Q_new = Q_old + α × (reward - Q_old)
Where α (learning rate, default 0.08) controls adaptation speed:
• Low α (0.01-0.05): Slow, stable learning
• Medium α (0.06-0.12): Balanced (recommended)
• High α (0.15-0.30): Fast, reactive learning
This gradually shifts Q-values toward arms that generate positive returns and away from losing arms.
Arm Selection Algorithms:
KMD offers four mathematically distinct selection strategies:
1. UCB1 (Upper Confidence Bound) - Recommended:
Formula: Select arm with max(Q_i + c·√(ln(t)/n_i))
Where:
• Q_i = Q-value of arm i
• c = exploration constant (default 1.5)
• t = total pulls across all arms
• n_i = pulls of arm i
Philosophy: Balance exploitation (use best arm) with exploration (try uncertain arms). The √(ln(t)/n_i) term creates an "exploration bonus" that decreases as an arm gets more pulls, ensuring all arms get sufficient testing.
Theoretical guarantee: Logarithmic regret bound - UCB1 provably converges to optimal arm selection over time.
2. UCB1-Tuned (Variance-Aware UCB):
Formula: Select arm with max(Q_i + √(ln(t)/n_i × min(0.25, V_i + √(2·ln(t)/n_i))))
Where V_i = variance of rewards for arm i
Philosophy: Incorporates reward variance into exploration. Arms with high variance (unpredictable) get less exploration bonus, focusing effort on stable performers.
Better bounds than UCB1 in practice, slightly more conservative exploration.
3. Epsilon-Greedy (Simple Random):
Algorithm:
With probability ε: Select random arm (explore)
With probability 1-ε: Select highest Q-value arm (exploit)
Default ε = 0.10 (10% exploration, 90% exploitation)
Philosophy: Simplest algorithm, easy to understand. Random exploration ensures all arms stay updated but may waste time on clearly bad arms.
4. Thompson Sampling (Bayesian):
The most sophisticated selection algorithm, using true Bayesian probability.
Each arm maintains Beta distribution parameters:
• α (alpha) = successes + 1
• β (beta) = failures + 1
Selection Process:
1. Sample θ_i ~ Beta(α_i, β_i) for each arm using Marsaglia-Tsang Gamma sampler
2. Select arm with highest sample: argmax_i(θ_i)
3. After reward, update:
- If reward > 0: α += |reward| × 100 (increment successes)
- If reward < 0: β += |reward| × 100 (increment failures)
Why Thompson Sampling Works:
The Beta distribution naturally represents uncertainty about an arm's true win rate. Early on with few trials, the distribution is wide (high uncertainty), leading to more exploration. As evidence accumulates, it narrows around the true performance, naturally shifting toward exploitation.
Unlike UCB which uses deterministic confidence bounds, Thompson Sampling is probabilistic—it samples from the posterior distribution of each arm's success rate, providing automatic exploration/exploitation balance without tuning.
Comparison:
• UCB1: Deterministic, guaranteed regret bounds, requires tuning exploration constant
• Thompson: Probabilistic, natural exploration, no tuning required, best empirical performance
• Epsilon-Greedy: Simplest, consistent exploration %, less efficient
• UCB1-Tuned: UCB1 + variance awareness, best for risk-averse
Exploration Constant (c):
For UCB algorithms, this multiplies the exploration bonus:
• Low c (0.5-1.0): Strongly prefer proven arms, rare exploration
• Medium c (1.2-1.8): Balanced (default 1.5)
• High c (2.0-3.0): Frequent exploration, diverse arm usage
Higher exploration constant in volatile/unstable markets, lower in stable trending environments.
🔬 WALK-FORWARD OPTIMIZATION: PREVENTING OVERFITTING
The single biggest problem in algorithmic trading is overfitting—strategies that look amazing in backtest but fail in live trading because they learned noise instead of signal. KMD's Walk-Forward Optimization system addresses this head-on.
How WFO Works:
The system divides time into repeating cycles:
1. Training Window (default 500 bars): Learn arm Q-values on historical data
2. Testing Window (default 100 bars): Validate on unseen "future" data
Training Phase:
• All arms accumulate rewards and update Q-values normally
• Q_train tracks in-sample performance
• System learns which arms work on historical data
Testing Phase:
• System continues using arms but tracks separate Q_test metrics
• Counts trades per arm (N_test)
• Testing performance is "out-of-sample" relative to training
Validation Requirements:
An arm is only "validated" (approved for live use) if:
1. N_test ≥ Minimum Trades (default 10): Sufficient statistical sample
2. Q_test > 0 : Positive out-of-sample performance
Arms that fail validation are blocked from generating signals, preventing the system from trading strategies that only worked on historical data.
Performance Decay:
At the end of each WFO cycle, all Q-values decay exponentially:
Q_new = Q_old × decay_rate (default 0.95)
This ensures old performance doesn't dominate forever. An arm that worked 10 cycles ago but fails recently will eventually lose influence.
Decay Math:
• 0.95 decay after 10 periods → 0.95^10 = 0.60 (40% forgotten)
• 0.90 decay after 10 periods → 0.90^10 = 0.35 (65% forgotten)
Fast decay (0.80-0.90): Quick adaptation, forgets old patterns rapidly
Slow decay (0.96-0.99): Stable, retains historical knowledge longer
WFO Efficiency Metric:
The key metric revealing overfitting:
Efficiency = (Q_test / Q_train) for each validated arm, averaged
• Efficiency > 0.8 : Excellent - strategies generalize well (LOW overfit risk)
• Efficiency 0.5-0.8 : Acceptable - moderate generalization (MODERATE risk)
• Efficiency < 0.5 : Poor - strategies curve-fitted to history (HIGH risk)
If efficiency is low, the system has learned noise. Training performance was good but testing (forward) performance is weak—classic overfitting.
The dashboard displays real-time WFO efficiency, allowing users to gauge system robustness. Low efficiency should trigger parameter review or reduced position sizing.
Why WFO Matters:
Consider two scenarios:
Scenario A - No WFO:
• Arm 3 (RSI Reversion) shows Q-value of 0.15 on all historical data
• System trades it aggressively
• Reality: It only worked during one specific ranging period
• Live trading: Fails because market has trended since backtest
Scenario B - With WFO:
• Arm 3 shows Q_train = 0.15 (good in training)
• But Q_test = -0.05 (loses in testing) with 12 test trades
• N_test ≥ 10 but Q_test < 0 → Arm BLOCKED
• System refuses to trade it despite good backtest
• Live trading: Protected from false strategy
WFO ensures only strategies that work going forward get used, not just strategies that fit the past.
Optimal Window Sizing:
Training Window:
• Too short (100-300): May learn recent noise, insufficient data
• Too long (1000-2000): May include obsolete market regimes
• Recommended: 4-6× testing window (default 500)
Testing Window:
• Too short (50-80): Insufficient validation, high variance
• Too long (300-500): Delayed adaptation to regime changes
• Recommended: 1/5 to 1/4 of training (default 100)
Minimum Trades:
• Too low (5-8): Statistical noise, lucky runs validate
• Too high (30-50): Many arms never validate, system rarely trades
• Recommended: 10-15 (default 10)
⚖️ WEIGHTED CONFLUENCE SYSTEM: MULTI-FACTOR SIGNAL QUALITY
Not all signals are created equal. KMD implements a sophisticated 100-point quality scoring system that combines eight independent factors with different importance weights.
The Scoring Framework:
Each potential signal receives a quality score from 0-100 by accumulating points from aligned factors:
CRITICAL FACTORS (20 points each):
1. Bandit Arm Alignment (20 points):
• Full points if selected arm's signal matches trade direction
• Zero points if arm disagrees
• Weight: Highest - the bandit selected this arm for a reason
2. MMD Regime Quality (20 points):
• Requires: MMD > dynamic threshold AND directional bias confirmed
• Scaled by MMD percentile (how extreme vs history)
• If MMD in top 10% of history: 100% of 20 points
• If MMD at 50th percentile: 50% of 20 points
• Weight: Highest - distribution shift is the core signal
HIGH IMPACT FACTORS (15 points each):
3. Trend Alignment (15 points):
• Full points if EMA(9) > EMA(21) > EMA(50) for longs (inverse for shorts)
• Scaled by ADX strength:
- ADX > 25: 100% (1.0× multiplier) - strong trend
- ADX 20-25: 70% (0.7× multiplier) - moderate trend
- ADX < 20: 40% (0.4× multiplier) - weak trend
• Weight: High - trend is friend, alignment increases probability
4. Volume Confirmation (15 points):
• Requires: OBV > EMA(OBV, 20) aligned with direction
• Scaled by volume ratio: vol_current / vol_average
- Volume 1.5×+ average: 100% of points (institutional participation)
- Volume 1.0-1.5× average: 67% of points (above average)
- Volume below average: 0 points (weak conviction)
• Weight: High - volume validates price moves
MODERATE FACTORS (10 points each):
5. Market Structure (10 points):
• Full points (10) if bullish structure (higher highs, higher lows) for longs
• Partial points (6) if near support level (within 1% of swing low)
• Similar logic inverted for bearish trades
• Weight: Moderate - structure context improves entries
6. RSI Positioning (10 points):
• For long signals:
- RSI < 50: 100% of points (1.0× multiplier) - room to run
- RSI 50-60: 60% of points (0.6× multiplier) - neutral
- RSI 60-70: 30% of points (0.3× multiplier) - elevated
- RSI > 70: 0 points (0× multiplier) - overbought
• Inverse for short signals
• Weight: Moderate - momentum context, not primary signal
BONUS FACTORS (10 points each):
7. Divergence (10 points):
• Full 10 points if bullish divergence detected for long (or bearish for short)
• Zero points otherwise
• Weight: Bonus - leading indicator, adds confidence when present
8. Multi-Timeframe Confirmation (10 points):
• Full 10 points if higher timeframe aligned (HTF EMA trending same direction, RSI supportive)
• Zero points if MTF disabled or HTF opposes
• Weight: Bonus - macro context filter, prevents counter-trend disasters
Total Maximum: 110 points (20+20+15+15+10+10+10+10)
Signal Quality Calculation:
Quality Score = (Accumulated_Points / Maximum_Possible) × 100
Where Maximum_Possible = 110 points if all factors active, adjusts if MTF disabled.
Example Calculation:
Long signal candidate:
• Bandit Arm: +20 (arm signals long)
• MMD Quality: +16 (MMD high, 80th percentile)
• Trend: +11 (EMAs aligned, ADX = 22 → 70% × 15)
• Volume: +10 (OBV rising, vol 1.3× avg → 67% × 15 = 10)
• Structure: +10 (higher lows forming)
• RSI: +6 (RSI = 55 → 60% × 10)
• Divergence: +0 (none present)
• MTF: +10 (HTF bullish)
Total: 83 / 110 × 100 = 75.5% quality score
This is an excellent quality signal - well above threshold (default 60%).
Quality Thresholds:
• Score 80-100 : Exceptional setup - all factors aligned
• Score 60-80 : High quality - most factors supportive (default minimum)
• Score 40-60 : Moderate - mixed confluence, proceed with caution
• Score 20-40 : Weak - minimal support, likely filtered out
• Score 0-20 : Very weak - almost certainly blocked
The minimum quality threshold (default 60) is the gatekeeper. Only signals scoring above this value can trigger trades.
Dynamic Threshold Adjustment:
The system optionally adjusts the threshold based on historical signal distribution:
If Dynamic Threshold enabled:
Recent_MMD_Mean = SMA(MMD, 50)
Recent_MMD_StdDev = StdDev(MMD, 50)
Dynamic_Threshold = max(Base_Threshold × 0.5,
min(Base_Threshold × 2.0,
MMD_Mean + MMD_StdDev × 0.5))
This auto-calibrates to market conditions:
• Quiet markets (low MMD): Threshold loosens (0.5× base)
• Active markets (high MMD): Threshold tightens (2× base)
Signal Ranking Filter:
When enabled, the system tracks the last 100 signal quality scores and only fires signals in the top percentile.
If Ranking Percentile = 75%:
• Collect last 100 signal scores in memory
• Sort ascending
• Threshold = Score at 75th percentile position
• Only signals ≥ this threshold fire
This ensures you're only taking the cream of the crop —top 25% of signals by quality, not every signal that technically qualifies.
🚦 SIGNAL GENERATION: TRANSITION LOGIC & COOLDOWNS
The confluence system determines if a signal qualifies , but the signal generation logic controls when triangles appear on the chart.
Core Qualification:
For a LONG signal to qualify:
1. Bull quality score ≥ signal threshold (default 60)
2. Selected arm signals +1 (long)
3. Cooldown satisfied (bars since last signal ≥ cooldown period)
4. Drawdown protection OK (current drawdown < pause threshold)
5. MMD ≥ 80% of dynamic threshold (slight buffer below full threshold)
For a SHORT signal to qualify:
1. Bear quality score ≥ signal threshold
2. Selected arm signals -1 (short)
3-5. Same as long
But qualification alone doesn't trigger a chart signal.
Three Signal Modes:
1. RESPONSIVE (Default - Recommended):
Signals appear on:
• Fresh qualification (wasn't qualified last bar, now is)
• Direction reversal (was qualified short, now qualified long)
• Quality improvement (already qualified, quality jumps 25%+ during EXTREME regime)
This mode shows new opportunities and significant upgrades without cluttering the chart with repeat signals.
2. TRANSITION ONLY:
Signals appear on:
• Fresh qualification only
• Direction reversal only
This is the cleanest mode - signals only when first qualifying or when flipping direction. Misses re-entries if quality improves mid-regime.
3. CONTINUOUS:
Signals appear on:
• Every bar that qualifies
Testing/debugging mode - shows all qualified bars. Very noisy but useful for understanding when system wants to trade.
Cooldown System:
Prevents signal clustering and overtrading by enforcing minimum bars between signals.
Base Cooldown: User-defined (default 5 bars)
Adaptive Cooldown (Optional):
If enabled, cooldown scales with volatility:
Effective_Cooldown = Base_Cooldown × volatility_multiplier
Where:
ATR_Pct = ATR(14) / Close × 100
Volatility_Multiplier = max(0.5, min(3.0, ATR_Pct / 2.0))
• Low volatility (ATR 1%): Multiplier ~0.5× → Cooldown = 2-3 bars (tight)
• Medium volatility (ATR 2%): Multiplier 1.0× → Cooldown = 5 bars (normal)
• High volatility (ATR 4%+): Multiplier 2.0-3.0× → Cooldown = 10-15 bars (wide)
This prevents excessive trading during wild swings while allowing more signals during calm periods.
Regime Filter:
Three modes controlling which regimes allow trading:
OFF: Trade in any regime (STABLE, TRENDING, SHIFTING, ELEVATED, EXTREME)
SMART (Recommended):
• Regime score = 1.0 for SHIFTING, ELEVATED (optimal)
• Regime score = 0.8 for TRENDING (acceptable)
• Regime score = 0.5 for EXTREME (too chaotic)
• Regime score = 0.2 for STABLE (too quiet)
Quality scores are multiplied by regime score. A 70% quality signal in STABLE regime becomes 70% × 0.2 = 14% → blocked.
STRICT:
• Regime score = 1.0 for SHIFTING, ELEVATED only
• Regime score = 0.0 for all others → hard block
Only trades during optimal distribution shift regimes.
Drawdown Protection:
If current equity drawdown exceeds pause threshold (default 8%), all signals are blocked until equity recovers.
This circuit breaker prevents compounding losses during adverse conditions or broken market structure.
🎯 RISK MANAGEMENT: ATR-BASED STOPS & TARGETS
Every signal generates volatility-normalized stop loss and target levels displayed as boxes on the chart.
Stop Loss Calculation:
Stop_Distance = ATR(14) × ATR_Multiplier (default 1.5)
For LONG: Stop = Entry - Stop_Distance
For SHORT: Stop = Entry + Stop_Distance
The stop is placed 1.5 ATRs away from entry by default, adapting automatically to instrument volatility.
Target Calculation:
Target_Distance = Stop_Distance × Risk_Reward_Ratio (default 2.0)
For LONG: Target = Entry + Target_Distance
For SHORT: Target = Entry - Target_Distance
Default 2:1 risk/reward means target is twice as far as stop.
Example:
• Price: $100
• ATR: $2
• ATR Multiplier: 1.5
• Risk/Reward: 2.0
LONG Signal:
• Entry: $100
• Stop: $100 - ($2 × 1.5) = $97.00 (-$3 risk)
• Target: $100 + ($3 × 2.0) = $106.00 (+$6 reward)
• Risk/Reward: $3 risk for $6 reward = 1:2 ratio
Target/Stop Box Lifecycle:
Boxes persist for a lifetime (default 20 bars) OR until an opposite signal fires, whichever comes first. This provides visual reference for active trade levels without permanent chart clutter.
When a new opposite-direction signal appears, all existing boxes from the previous direction are immediately deleted, ensuring only relevant levels remain visible.
Adaptive Stop/Target Sizing:
While not explicitly coded in the current version, the shadow portfolio tracking system calculates PnL based on these levels. Users can observe which ATR multipliers and risk/reward ratios produce optimal results for their instrument/timeframe via the dashboard performance metrics.
📊 COMPREHENSIVE VISUAL SYSTEM
KMD provides rich visual feedback through four distinct layers:
1. PROBABILITY CLOUD (Adaptive Volatility Bands):
Two sets of bands around price that expand/contract with MMD:
Calculation:
Std_Multiplier = 1 + MMD × 3
Upper_1σ = Close + ATR × Std_Multiplier × 0.5
Lower_1σ = Close - ATR × Std_Multiplier × 0.5
Upper_2σ = Close + ATR × Std_Multiplier
Lower_2σ = Close - ATR × Std_Multiplier
• Inner band (±0.5× adjusted ATR) : 68% probability zone (1 standard deviation equivalent)
• Outer band (±1.0× adjusted ATR) : 95% probability zone (2 standard deviation equivalent)
When MMD spikes, bands widen dramatically, showing increased uncertainty. When MMD calms, bands tighten, showing normal price action.
2. MOMENTUM FLOW VECTORS (Directional Arrows):
Dynamic arrows that visualize momentum strength and direction:
Arrow Properties:
• Length: Proportional to momentum magnitude (2-10 bars forward)
• Width: 1px (weak), 2px (medium), 3px (strong)
• Transparency: 30-100 (more opaque = stronger momentum)
• Direction: Up for bullish, down for bearish
• Placement: Below bars (bulls) or above bars (bears)
Trigger Logic:
• Always appears every 5 bars (regular sampling)
• Forced appearance if momentum strength > 50 OR regime shift OR MMD velocity > 10%
Strong momentum (>75%) gets:
• Secondary support arrow (70% length, lighter color)
• Label showing "75%" strength
Very strong momentum (>60%) gets:
• Gradient flow lines (thick vertical lines showing momentum vector)
This creates a dynamic "flow field" showing where market pressure is pushing price.
3. REGIME ZONES (Distribution Shift Highlighting):
Boxes drawn around price action during periods when MMD > threshold:
Zone Detection:
• System enters "in_regime" mode when MMD crosses above threshold
• Tracks highest high and lowest low during regime
• Exits "in_regime" when MMD crosses back below threshold
• Draws box from regime_start to current bar, spanning high to low
Zone Colors:
• EXTREME regime: Red with 90% transparency (dangerous)
• SHIFTING regime: Amber with 92% transparency (active)
• Other regimes: Teal with 95% transparency (normal)
Emphasis Boxes:
When regime_shift occurs (MMD crosses above threshold that bar), a special 4-bar wide emphasis box highlights the exact transition moment with thicker borders and lower transparency.
This visual immediately shows "the market just changed" moments.
4. SIGNAL CONNECTION LINES:
Lines connecting consecutive signals to show trade sequences:
Line Types:
• Solid line : Same direction signals (long → long, short → short)
• Dotted line : Reversal signals (long → short or short → long)
Visual Purpose:
• Identify signal clusters (multiple entries same direction)
• Spot reversal patterns (system changing bias)
• See average bars between signals
• Understand system behavior patterns
Connections are limited to signals within 100 bars of each other to avoid across-chart lines.
📈 COMPREHENSIVE DASHBOARD: REAL-TIME SYSTEM STATE
The dashboard provides complete transparency into system internals with three size modes:
MINIMAL MODE:
• Header (Regime + WFO phase)
• Signal Status (LONG READY / SHORT READY / WAITING)
• Core metrics only
COMPACT MODE (Default):
• Everything in Minimal
• Kernel info
• Active bandit arm + validation
• WFO efficiency
• Confluence scores (bull/bear)
• MMD current value
• Position status (if active)
• Performance summary
FULL MODE:
• Everything in Compact
• Signal Quality Diagnostics:
- Bull quality score vs threshold with progress bar
- Bear quality score vs threshold with progress bar
- MMD threshold check (✓/✗)
- MMD percentile (top X% of history)
- Regime fit score (how well current regime suits trading)
- WFO confidence level (validation strength)
- Adaptive cooldown status (bars remaining vs required)
• All Arms Signals:
- Shows all 7 arm signals (▲/▼/○)
- Q-value for each arm
- Indicates selected arm with ◄
• Thompson Sampling Parameters (if TS mode):
- Alpha/Beta values for selected arm
- Probability estimate (α/(α+β))
• Extended Performance:
- Expectancy per trade
- Sharpe ratio with star rating
- Individual arm performance (if enough data)
Key Dashboard Sections:
REGIME: Current market regime (STABLE/TRENDING/SHIFTING/ELEVATED/EXTREME) with color-coded background
SIGNAL STATUS:
• "▲ LONG READY" (cyan) - Long signal qualified
• "▼ SHORT READY" (red) - Short signal qualified
• "○ WAITING" (gray) - No qualified signals
• Signal Mode displayed (Responsive/Transition/Continuous)
KERNEL:
• Active kernel type (RBF/Laplacian/Cauchy/Rational Quadratic)
• Current bandwidth (effective after adaptation)
• Adaptive vs Fixed indicator
• RBF scale (if RBF) or RQ alpha (if RQ)
BANDIT:
• Selection algorithm (UCB1/UCB1-Tuned/Epsilon/Thompson)
• Active arm name (MMD Shift, Trend, Breakout, etc.)
• Validation status (✓ if validated, ? if unproven)
• Pull count (n=XXX) - how many times selected
• Q-Value (×10000 for readability)
• UCB score (exploration + exploitation)
• Train Q vs Test Q comparison
• Test trade count
WFO:
• Current period number
• Progress through period (XX%)
• Efficiency percentage (color-coded: green >80%, yellow 50-80%, red <50%)
• Overfit risk assessment (LOW/MODERATE/HIGH)
• Validated arms count (X/7)
CONFLUENCE:
• Bull score (X/7) with progress bar (███ full, ██ medium, █ low, ○ none)
• Bear score (X/7) with progress bar
• Color-coded: Green/red if ≥ minimum, gray if below
MMD:
• Current value (3 decimals)
• Threshold (2 decimals)
• Ratio (MMD/Threshold × multiplier, e.g. "1.5x" = 50% above threshold)
• Velocity (+/- percentage change) with up/down arrows
POSITION:
• Status: LONG/SHORT/FLAT
• Active indicator (● if active, ○ if flat)
• Bars since entry
• Current P&L percentage (if active)
• P&L direction (▲ profit / ▼ loss)
• R-Multiple (how many Rs: PnL / initial_risk)
PERFORMANCE:
• Total Trades
• Wins (green) / Losses (red) breakdown
• Win Rate % with visual bar and color coding
• Profit Factor (PF) with checkmark if >1.0
• Expectancy % (average profit per trade)
• Sharpe Ratio with star rating (★★★ >2, ★★ >1, ★ >0, ○ negative)
• Max DD % (maximum drawdown) with "Now: X%" showing current drawdown
🔧 KEY PARAMETERS EXPLAINED
Kernel Configuration:
• Kernel Function : RBF / Laplacian / Cauchy / Rational Quadratic
- Start with Cauchy for stability, experiment with others
• Bandwidth (σ) (0.5-10.0, default 2.0): Kernel sensitivity
- Lower: More signals, more false positives (scalping: 0.8-1.5)
- Medium: Balanced (swing: 1.5-3.0)
- Higher: Fewer signals, stronger quality (position: 3.0-8.0)
• Adaptive Bandwidth (default ON): Auto-adjust to volatility
- Keep ON for most markets
• RBF Scale (0.1-2.0, default 0.5): RBF-specific scaling
- Only matters if RBF kernel selected
- Lower = more sensitive (0.3 for scalping)
- Higher = less sensitive (1.0+ for position)
• RQ Alpha (0.5-5.0, default 2.0): Rational Quadratic tail behavior
- Only matters if RQ kernel selected
- Low (0.5-1.0): Heavy tails, robust to outliers (like Cauchy)
- High (3.0-5.0): Light tails, sensitive (like RBF)
Analysis Windows:
• Reference Period (30-500, default 100): Historical baseline
- Scalping: 50-80
- Intraday: 80-150
- Swing: 100-200
- Position: 200-500
• Test Period (5-100, default 20): Recent behavior window
- Should be 15-25% of Reference Period
- Scalping: 10-15
- Intraday: 15-25
- Swing: 20-40
- Position: 30-60
• Sample Size (10-40, default 20): Data points for MMD
- Lower: Faster, less reliable (scalping: 12-15)
- Medium: Balanced (standard: 18-25)
- Higher: Slower, more reliable (position: 25-35)
Walk-Forward Optimization:
• Enable WFO (default ON): Master overfitting protection
- Always ON for live trading
• Training Window (100-2000, default 500): Learning data
- Should be 4-6× Testing Window
- 1m-5m: 300-500
- 15m-1h: 500-800
- 4h-1D: 500-1000
- 1D-1W: 800-2000
• Testing Window (50-500, default 100): Validation data
- Should be 1/5 to 1/4 of Training
- 1m-5m: 50-100
- 15m-1h: 80-150
- 4h-1D: 100-200
- 1D-1W: 150-500
• Min Trades for Validation (5-50, default 10): Statistical threshold
- Active traders: 8-12
- Position traders: 15-30
• Performance Decay (0.8-0.99, default 0.95): Old data forgetting
- Aggressive: 0.85-0.90 (volatile markets)
- Moderate: 0.92-0.96 (most use cases)
- Conservative: 0.97-0.99 (stable markets)
Multi-Armed Bandit:
• Learning Rate (α) (0.01-0.3, default 0.08): Adaptation speed
- Low: 0.01-0.05 (position trading, stable)
- Medium: 0.06-0.12 (day/swing trading)
- High: 0.15-0.30 (scalping, fast adaptation)
• Selection Strategy : UCB1 / UCB1-Tuned / Epsilon-Greedy / Thompson
- UCB1 recommended for most (proven, reliable)
- Thompson for advanced users (best empirical performance)
• Exploration Constant (c) (0.5-3.0, default 1.5): Explore vs exploit
- Low: 0.5-1.0 (conservative, proven strategies)
- Medium: 1.2-1.8 (balanced)
- High: 2.0-3.0 (experimental, volatile markets)
• Epsilon (0.0-0.3, default 0.10): Random exploration (ε-greedy only)
- Only applies if Epsilon-Greedy selected
- Standard: 0.10 (10% random)
Signal Configuration:
• MMD Threshold (0.05-1.0, default 0.15): Distribution divergence trigger
- Low: 0.08-0.12 (scalping, sensitive)
- Medium: 0.12-0.20 (day/swing)
- High: 0.25-0.50 (position, strong signals)
- Stocks/indices: 0.12-0.18
- Forex: 0.15-0.25
- Crypto: 0.20-0.35
• Confluence Filter (default ON): Multi-factor requirement
- Keep ON for quality signals
• Minimum Confluence (1-7, default 2): Factors needed
- Very low: 1 (high frequency)
- Low: 2-3 (active trading)
- Medium: 4-5 (swing)
- High: 6-7 (rare perfect setups)
• Cooldown (1-20, default 5): Bars between signals
- Short: 1-3 (scalping, allows rapid re-entry)
- Medium: 4-7 (day/swing)
- Long: 8-20 (position, ensures development)
• Signal Mode : Responsive / Transition Only / Continuous
- Responsive: Recommended (new + upgrades)
- Transition: Cleanest (first + reversals)
- Continuous: Testing (every qualified bar)
Advanced Signal Control:
• Minimum Signal Strength (30-90, default 60): Quality floor
- Lower: More signals (scalping: 40-50)
- Medium: Balanced (standard: 55-65)
- Higher: Fewer signals (position: 70-80)
• Dynamic MMD Threshold (default ON): Auto-calibration
- Keep ON for adaptive behavior
• Signal Ranking Filter (default ON): Top percentile only
- Keep ON to trade only best signals
• Ranking Percentile (50-95, default 75): Selectivity
- 75 = top 25% of signals
- 85 = top 15% of signals
- 90 = top 10% of signals
• Adaptive Cooldown (default ON): Volatility-scaled spacing
- Keep ON for intelligent spacing
• Regime Filter : Off / Smart / Strict
- Off: Any regime (maximize frequency)
- Smart: Avoid extremes (recommended)
- Strict: Only optimal regimes (maximum quality)
Risk Parameters:
• Risk:Reward Ratio (1.0-5.0, default 2.0): Target distance multiplier
- Conservative: 1.0-1.5 (higher WR needed)
- Balanced: 2.0-2.5 (standard professional)
- Aggressive: 3.0-5.0 (lower WR acceptable)
• Stop Loss (ATR mult) (0.5-4.0, default 1.5): Stop distance
- Tight: 0.5-1.0 (scalping, low vol)
- Medium: 1.2-2.0 (day/swing)
- Wide: 2.5-4.0 (position, high vol)
• Pause After Drawdown (2-20%, default 8%): Circuit breaker
- Aggressive: 3-6% (small accounts)
- Moderate: 6-10% (most traders)
- Relaxed: 10-15% (large accounts)
Multi-Timeframe:
• MTF Confirmation (default OFF): Higher TF filter
- Turn ON for swing/position trading
- Keep OFF for scalping/day trading
• Higher Timeframe (default "60"): HTF for trend check
- Should be 3-5× chart timeframe
- 1m chart → 5m or 15m
- 5m chart → 15m or 60m
- 15m chart → 60m or 240m
- 1h chart → 240m or D
Display:
• Probability Cloud (default ON): Volatility bands
• Momentum Flow Vectors (default ON): Directional arrows
• Regime Zones (default ON): Distribution shift boxes
• Signal Connections (default ON): Lines between signals
• Dashboard (default ON): Stats table
• Dashboard Position : Top Left / Top Right / Bottom Left / Bottom Right
• Dashboard Size : Minimal / Compact / Full
• Color Scheme : Default / Monochrome / Warm / Cool
• Show MMD Debug Plot (default OFF): Overlay MMD value
- Turn ON temporarily for threshold calibration
🎓 PROFESSIONAL USAGE PROTOCOL
Phase 1: Parameter Calibration (Week 1)
Goal: Find optimal kernel and bandwidth for your instrument/timeframe
Setup:
• Enable "Show MMD Debug Plot"
• Start with Cauchy kernel, 2.0 bandwidth
• Run on chart with 500+ bars of history
Actions:
• Watch yellow MMD line vs red threshold line
• Count threshold crossings per 100 bars
• Adjust bandwidth to achieve desired signal frequency:
- Too many crossings (>20): Increase bandwidth (2.5-3.5)
- Too few crossings (<5): Decrease bandwidth (1.2-1.8)
• Try other kernels to see sensitivity differences
• Note: RBF most sensitive, Cauchy most robust
Target: 8-12 threshold crossings per 100 bars for day trading
Phase 2: WFO Validation (Weeks 2-3)
Goal: Verify strategies generalize out-of-sample
Requirements:
• Enable WFO with default settings (500/100)
• Let system run through 2-3 complete WFO cycles
• Accumulate 50+ total trades
Actions:
• Monitor WFO Efficiency in dashboard
• Check which arms validate (green ✓) vs unproven (yellow ?)
• Review Train Q vs Test Q for selected arm
• If efficiency < 0.5: System overfitting, adjust parameters
Red Flags:
• Efficiency consistently <0.4: Serious overfitting
• Zero arms validate after 2 cycles: Windows too short or thresholds too strict
• Selected arm never validates: Investigate arm logic relevance
Phase 3: Signal Quality Tuning (Week 4)
Goal: Optimize confluence and quality thresholds
Requirements:
• Switch dashboard to FULL mode
• Enable all diagnostic displays
• Track signals for 100+ bars
Actions:
• Watch Bull/Bear quality scores in real-time
• Note quality distribution of fired signals (are they all 60-70% or higher?)
• If signal ranking on, check percentile cutoff appropriateness
• Adjust "Minimum Signal Strength" to filter weak setups
• Adjust "Minimum Confluence" if too many/few signals
Optimization:
• If win rate >60%: Lower thresholds (capture more opportunities)
• If win rate <45%: Raise thresholds (improve quality)
• If Profit Factor <1.2: Increase minimum quality by 5-10 points
Phase 4: Regime Awareness (Week 5)
Goal: Understand which regimes work best
Setup:
• Track performance by regime using notes/journal
• Dashboard shows current regime constantly
Actions:
• Note signal quality and outcomes in each regime:
- STABLE: Often weak signals, low confidence
- TRENDING: Trend-following arms dominate
- SHIFTING: Highest signal quality, core opportunity
- ELEVATED: Good signals, moderate success
- EXTREME: Mixed results, high variance
• Adjust Regime Filter based on findings
• If losing in EXTREME consistently: Use "Smart" or "Strict" filter
Phase 5: Micro Live Testing (Weeks 6-8)
Goal: Validate forward performance with minimal capital
Requirements:
• Paper trading shows: WR >45%, PF >1.2, Efficiency >0.6
• Understand why signals fire and why they're blocked
• Comfortable with dashboard interpretation
Setup:
• 10-25% intended position size
• Focus on ML-boosted signals (if any pattern emerges)
• Keep detailed journal with screenshots
Actions:
• Execute every signal the system generates (within reason)
• Compare your P&L to shadow portfolio metrics
• Track divergence between your results and system expectations
• Review weekly: What worked? What failed? Any execution issues?
Red Flags:
• Your WR >20% below paper: Execution problems (slippage, timing)
• Your WR >20% above paper: Lucky streak or parameter mismatch
• Dashboard metrics drift significantly: Market regime changed
Phase 6: Full Scale Deployment (Month 3+)
Goal: Progressively increase to full position sizing
Requirements:
• 30+ micro live trades completed
• Live WR within 15% of paper WR
• Profit Factor >1.0 live
• Max DD <15% live
• Confidence in parameter stability
Progression:
• Months 3-4: 25-50% intended size
• Months 5-6: 50-75% intended size
• Month 7+: 75-100% intended size
Maintenance:
• Weekly dashboard review for metric drift
• Monthly WFO efficiency check (should stay >0.5)
• Quarterly parameter re-optimization if market character shifts
• Annual deep review of arm performance and kernel relevance
Stop/Reduce Rules:
• WR drops >20% from baseline: Reduce to 50%, investigate
• Consecutive losses >12: Reduce to 25%, review parameters
• Drawdown >20%: Stop trading, reassess system fit
• WFO efficiency <0.3 for 2+ periods: System broken, retune completely
💡 DEVELOPMENT INSIGHTS & KEY BREAKTHROUGHS
The Kernel Discovery:
Early versions used simple moving average crossovers and momentum indicators—they captured obvious moves but missed subtle regime changes. The breakthrough came from reading academic papers on two-sample testing and kernel methods. Applying Maximum Mean Discrepancy to financial returns revealed distribution shifts 10-20 bars before traditional indicators signaled. This edge—knowing the market had fundamentally changed before it was obvious—became the core of KMD.
Testing showed Cauchy kernel outperformed others by 15% win rate in crypto specifically because its heavy tails ignored the massive outlier spikes (liquidation cascades, bot manipulation) that fooled RBF into false signals.
The Seven Arms Revelation:
Originally, the system had one strategy: "Trade when MMD crosses threshold." Performance was inconsistent—great in ranging markets, terrible in trends. The insight: different market structures require different strategies. Creating seven distinct arms based on different market theories (trend-following, mean-reversion, breakout, volume, momentum) and letting them compete solved the problem.
The multi-armed bandit wasn't added as a gimmick—it was the solution to "which strategy should I use right now?" The system discovers the answer automatically through reinforcement learning.
The Thompson Sampling Superiority:
UCB1 worked fine, but Thompson Sampling empirically outperformed it by 8% over 1000+ trades in backtesting. The reason: Thompson's probabilistic selection naturally hedges uncertainty. When two arms have similar Q-values, UCB1 picks one deterministically (whichever has slightly higher exploration bonus). Thompson samples from both distributions, sometimes picking the "worse" one—and often discovering it's actually better in current conditions.
Implementing true Beta distribution sampling (Box-Muller + Marsaglia-Tsang) instead of fake approximations was critical. Fake Thompson (using random with bias) underperformed UCB1. Real Thompson with proper Bayesian updating dominated.
The Walk-Forward Necessity:
Initial backtests showed 65% win rate across 5000 trades. Live trading: 38% win rate over first 100 trades. Crushing disappointment. The problem: overfitting. The training data included the test data (look-ahead bias). Implementing proper walk-forward optimization with out-of-sample validation dropped backtest win rate to 51%—but live performance matched at 49%. That's a system you can trust.
WFO efficiency metric became the North Star. If efficiency >0.7, live results track paper. If efficiency <0.5, prepare for disappointment.
The Confluence Complexity:
First signals were simple: "MMD high + arm agrees." This generated 200+ signals on 1000 bars with 42% win rate—not tradeable. Adding confluence (must have trend + volume + structure + RSI) reduced signals to 40 with 58% win rate. The math clicked: fewer, better signals outperform many mediocre signals .
The weighted system (20pt critical factors, 15pt high-impact, 10pt moderate/bonus) emerged from analyzing which factors best predicted wins. Bandit arm alignment and MMD quality were 2-3× more predictive than RSI or divergence, so they got 2× the weight. This isn't arbitrary—it's data-driven.
The Dynamic Threshold Insight:
Fixed MMD threshold failed across different market conditions. 0.15 worked perfectly on ES but fired constantly on Bitcoin. The adaptive threshold (scaling with recent MMD mean + stdev) auto-calibrated to instrument volatility. This single change made the system deployable across forex, crypto, stocks without manual tuning per instrument.
The Signal Mode Evolution:
Originally, every qualified bar showed a triangle. Charts became unusable—dozens of stacked triangles during trending regimes. "Transition Only" mode cleaned this up but missed re-entries when quality spiked mid-regime. "Responsive" mode emerged as the optimal balance: show fresh qualifications, reversals, AND significant quality improvements (25%+) during extreme regimes. This captures the signal intent ("something important just happened") without chart pollution.
🚨 LIMITATIONS & CRITICAL ASSUMPTIONS
What This System IS NOT:
• NOT Predictive : KMD doesn't forecast prices. It identifies when the current distribution differs from historical baseline, suggesting regime transition—but not direction or magnitude.
• NOT Holy Grail : Typical performance is 48-56% win rate with 1.3-1.8 avg R-multiple. This is a probabilistic edge, not certainty. Expect losing streaks of 8-12 trades.
• NOT Universal : Performs best on liquid, auction-driven markets (futures, major forex, large-cap stocks, BTC/ETH). Struggles with illiquid instruments, thin order books, heavily manipulated markets.
• NOT Hands-Off : Requires monitoring for news events, earnings, central bank announcements. MMD cannot detect "Fed meeting in 2 hours" or "CEO stepping down"—it only sees statistical patterns.
• NOT Immune to Regime Persistence : WFO helps but cannot predict black swans or fundamental market structure changes (pandemic, war, regulatory overhaul). During these events, all historical patterns may break.
Core Assumptions:
1. Return Distributions Exhibit Clustering : Markets alternate between relatively stable distributional regimes. Violation: Permanent random walk, no regime structure.
2. Distribution Changes Precede Price Moves : Statistical divergence appears before obvious technical signals. Violation: Instantaneous regime flips (gaps, news), no statistical warning.
3. Volume Reflects Real Activity : Volume-based confluence assumes genuine participation. Violation: Wash trading, spoofing, exchange manipulation (common in crypto).
4. Past Arm Performance Predicts Future Arm Performance : The bandit learns from history. Violation: Fundamental strategy regime change (e.g., market transitions from mean-reverting to trending permanently).
5. ATR-Based Stops Are Rational : Volatility-normalized risk management avoids premature exits. Violation: Flash crashes, liquidity gaps, stop hunts precisely targeting ATR multiples.
6. Kernel Similarity Maps to Economic Similarity : Mathematical similarity (via kernel) correlates with economic similarity (regime). Violation: Distributions match by chance while fundamentals differ completely.
Performs Best On:
• ES, NQ, RTY (S&P 500, Nasdaq, Russell 2000 futures)
• Major forex pairs: EUR/USD, GBP/USD, USD/JPY, AUD/USD
• Liquid commodities: CL (crude oil), GC (gold), SI (silver)
• Large-cap stocks: AAPL, MSFT, GOOGL, TSLA (>$10M avg daily volume)
• Major crypto on reputable exchanges: BTC, ETH (Coinbase, Kraken)
Performs Poorly On:
• Low-volume stocks (<$1M daily volume)
• Exotic forex pairs with erratic spreads
• Illiquid crypto altcoins (manipulation, unreliable volume)
• Pre-market/after-hours (thin liquidity, gaps)
• Instruments with frequent corporate actions (splits, dividends)
• Markets with persistent one-sided intervention (central bank pegs)
Known Weaknesses:
• Lag During Instantaneous Shifts : MMD requires (test_window) bars to detect regime change. Fast-moving events (5-10 bar crashes) may bypass detection entirely.
• False Positives in Choppy Consolidation : Low-volatility range-bound markets can trigger false MMD spikes from random noise crossing threshold. Regime filter helps but doesn't eliminate.
• Parameter Sensitivity : Small bandwidth changes (2.0→2.5) can alter signal frequency by 30-50%. Requires careful calibration per instrument.
• Bandit Convergence Time : MAB needs 50-100 trades per arm to reliably learn Q-values. Early trades (first 200 bars) are essentially random exploration.
• WFO Warmup Drag : First WFO cycle has no validation data, so all arms start unvalidated. System may trade rarely or conservatively for first 500-600 bars until sufficient test data accumulates.
• Visual Overload : With all display options enabled (cloud, vectors, zones, connections), chart can become cluttered. Disable selectively for cleaner view.
⚠️ RISK DISCLOSURE
Trading futures, forex, stocks, options, and cryptocurrencies involves substantial risk of loss and is not suitable for all investors. Leveraged instruments can result in losses exceeding your initial investment. Past performance, whether backtested or live, is not indicative of future results.
The Kernel Market Dynamics system, including its multi-armed bandit and walk-forward optimization components, is provided for educational purposes only. It is not financial advice, investment advice, or a recommendation to buy or sell any security or instrument.
The adaptive learning algorithms optimize based on historical data—there is no guarantee that learned strategies will remain profitable or that kernel-detected regime changes will lead to profitable trades. Market conditions change, correlations break, and distributional regimes shift in ways that historical data cannot predict. Black swan events occur.
Walk-forward optimization reduces but does not eliminate overfitting risk. WFO efficiency metrics indicate likelihood of forward performance but cannot guarantee it. A system showing high efficiency on one dataset may show low efficiency on another timeframe or instrument.
The dashboard shadow portfolio simulates trades under idealized conditions: instant fills, no slippage, no commissions, perfect execution. Real trading involves slippage (often 1-3 ticks per trade), commissions, latency, partial fills, rejected orders, requotes, and liquidity constraints that significantly reduce performance below simulated results.
Maximum Mean Discrepancy is a statistical distance metric—high MMD indicates distribution divergence but does not indicate direction, magnitude, duration, or profitability of subsequent moves. MMD can spike during sideways chop, producing signals with no directional follow-through.
Users must independently validate system performance on their specific instruments, timeframes, broker execution, and market conditions before risking capital. Conduct extensive paper trading (minimum 100 trades) and start with micro position sizing (10-25% intended size) for at least 50 trades before scaling up.
Never risk more capital than you can afford to lose completely. Use proper position sizing (1-2% risk per trade maximum). Implement stop losses on every trade. Maintain adequate margin/capital reserves. Understand that most retail traders lose money. Algorithmic systems do not change this fundamental reality—they systematize decision-making but do not eliminate risk.
The developer makes no warranties regarding profitability, suitability, accuracy, reliability, or fitness for any particular purpose. Users assume all responsibility for their trading decisions, parameter selections, risk management, and outcomes.
By using this indicator, you acknowledge that you have read and understood these risk disclosures and accept full responsibility for all trading activity and potential losses.
📁 SUGGESTED TRADINGVIEW CATEGORIES
PRIMARY CATEGORY: Statistics
The Kernel Market Dynamics system is fundamentally a statistical learning framework . At its core lies Maximum Mean Discrepancy—an advanced two-sample statistical test from the academic machine learning literature. The indicator compares probability distributions using kernel methods (RBF, Laplacian, Cauchy, Rational Quadratic) that map data to high-dimensional feature spaces for nonlinear similarity measurement.
The multi-armed bandit framework implements reinforcement learning via Q-learning with exponential moving average updates. Thompson Sampling uses true Bayesian inference with Beta posterior distributions. Walk-forward optimization performs rigorous out-of-sample statistical validation with train/test splits and efficiency metrics that detect overfitting.
The confluence system aggregates multiple statistical indicators (RSI, ADX, OBV, Z-scores, EMAs) with weighted scoring that produces a 0-100 quality metric. Signal ranking uses percentile-based filtering on historical quality distributions. The dashboard displays comprehensive statistics: win rates, profit factors, Sharpe ratios, expectancy, drawdowns—all computed from trade return distributions.
This is advanced statistical analysis applied to trading: distribution comparison, kernel methods, reinforcement learning, Bayesian inference, hypothesis testing, and performance analytics. The statistical sophistication distinguishes KMD from simple technical indicators.
SECONDARY CATEGORY: Volume
Volume analysis plays a crucial role in KMD's signal generation and validation. The confluence system includes volume confirmation as a high-impact factor (15 points): signals require above-average volume (>1.2× mean) for full points, with scaling based on volume ratio. The OBV (On-Balance Volume) trend indicator determines directional bias for Arm 6 (Volume Confirmation strategy).
Volume ratio (current / 20-period average) directly affects confluence scores—higher volume strengthens signal quality. The momentum flow vectors scale width and opacity based on volume momentum relative to average. Energy particle visualization specifically marks volume burst events (>2× average volume) as potential market-moving catalysts.
Several bandit arms explicitly incorporate volume:
• Arm 2 (Breakout): Requires volume confirmation for Bollinger Band breaks
• Arm 6 (Volume Confirmation): Primary logic based on OBV trend + volume spike
The system recognizes volume as the "conviction" behind price moves—distribution changes matter more when accompanied by significant volume, indicating genuine participant behavior rather than noise. This volume-aware filtering improves signal reliability in liquid markets.
TERTIARY CATEGORY: Volatility
Volatility measurement and adaptation permeate the KMD system. ATR (Average True Range) forms the basis for all risk management: stops are placed at ATR × multiplier, targets are scaled accordingly. The adaptive bandwidth feature scales kernel bandwidth (0.5-2.0×) inversely with volatility—tightening during calm markets, widening during volatile periods.
The probability cloud (primary visual element) directly visualizes volatility: bands expand/contract based on (1 + MMD × 3) multiplier applied to ATR. Higher MMD (distribution divergence) + higher ATR = dramatically wider uncertainty bands.
Adaptive cooldown scales minimum bars between signals based on ATR percentage: higher volatility = longer cooldown (up to 3× base), preventing overtrading during whipsaw conditions. The gamma parameter in the tensor calculation (from related indicators) and volatility ratio measurements influence MMD sensitivity.
Regime classification incorporates volatility metrics: high volatility with ranging price action produces "RANGE⚡" regime, while volatility expansion with directional movement produces trending regimes. The system adapts its behavior to volatility regimes—tighter requirements during extreme volatility, looser requirements during stable periods.
ATR-based risk management ensures position sizing and exit levels automatically adapt to instrument volatility, making the system deployable across instruments with different average volatilities (stocks vs crypto) without manual recalibration.
══════════════════════════════════════════
CLOSING STATEMENT
══════════════════════════════════════════
Kernel Market Dynamics doesn't just measure price—it measures the probability structure underlying price. It doesn't just pick one strategy—it learns which strategies work in which conditions. It doesn't just optimize on history—it validates on the future.
This is machine learning applied correctly to trading: not curve-fitting oscillators to maximize backtest profit, but implementing genuine statistical learning algorithms (kernel methods, multi-armed bandits, Bayesian inference) that adapt to market evolution while protecting against overfitting through rigorous walk-forward testing.
The seven arms compete. The Thompson sampler selects. The kernel measures. The confluence scores. The walk-forward validates. The signals fire.
Most indicators tell you what happened. KMD tells you when the game changed.
"In the space between distributions, where the kernel measures divergence and the bandit learns from consequence—there, edge exists." — KMD-WFO-MAB v2
Taking you to school. — Dskyz, Trade with insight. Trade with anticipation.
(Final Clean Version) V2 Optimized Trading Guide — MWABUFX 15-Minute Intraday Setup
🕒 Recommended Timeframe
✅ 15-Minute Chart (M15) — the most balanced and accurate for MWABUFX.
Why M15 Works Best:
Filters out small, noisy market movements found on 1m–5m charts.
Responds faster than 1H or 4H, perfect for daily profits.
Aligns well with market session volatility (London & New York).
Gives 2–5 high-probability trades per day depending on the pair.
Ideal for traders using PineConnector automation or manual execution.
🧭 How to Trade on 15-Minute
🟢 Buy Setup
EMA 238 is sloping upward and price is above it.
Supertrend flips green — wait for candle to close above the line.
Confirm trend direction on 1H timeframe (optional filter).
Enter trade at the close of the signal candle.
Stop-Loss: below recent swing low.
Take Profits:
TP1 → 1:1
TP2 → 1:2
TP3 → 1:3
Move SL to breakeven after TP1 is hit.
🔴 Sell Setup
EMA 238 is sloping downward and price is below it.
Supertrend flips red — wait for candle to close below the line.
Confirm 1H trend also bearish (optional).
Enter trade at the candle close.
Stop-Loss: above recent swing high.
Take Profits: TP1, TP2, TP3 as above.
🕐 Best Trading Hours (Kenya Time / GMT+3)
Session Time Ideal Pairs Notes
London Session 10:00 AM – 2:00 PM GBPUSD, EURUSD, Gold Cleanest 15-min trends
New York Session 3:30 PM – 7:00 PM US30, NAS100, XAUUSD, GBPUSD Strong volatility, high RR trades
Avoid After 8:30 PM — Market slows down, spreads widen
📌 If you must choose one — trade 15-minute charts during London–New York overlap (3:30 PM – 6:30 PM).
⚖️ Risk & Profit Strategy
Risk only 1–2% of balance per trade.
Focus on 1–3 solid setups per session — no overtrading.
Aim for minimum 1:2 reward-to-risk ratio.
Avoid entries when EMA 238 is flat (ranging market).
💡 Pro Tips
Use “Close of Candle” confirmation — avoid jumping in mid-bar.
Combine with session bias (e.g. buy Gold during bullish NY momentum).
Use alerts through PineConnector to catch trades instantly.
Don’t trade during major red news (NFP, CPI, FOMC).
Journal every trade — review TP/SL behavior to improve timing.
BMM V2.1 FINAL VERSION ⚙️ Optimized Trading Guide — MWABUFX 15-Minute Intraday Setup
🕒 Recommended Timeframe
✅ 15-Minute Chart (M15) — the most balanced and accurate for MWABUFX.
Why M15 Works Best:
Filters out small, noisy market movements found on 1m–5m charts.
Responds faster than 1H or 4H, perfect for daily profits.
Aligns well with market session volatility (London & New York).
Gives 2–5 high-probability trades per day depending on the pair.
Ideal for traders using PineConnector automation or manual execution.
🧭 How to Trade on 15-Minute
🟢 Buy Setup
EMA 238 is sloping upward and price is above it.
Supertrend flips green — wait for candle to close above the line.
Confirm trend direction on 1H timeframe (optional filter).
Enter trade at the close of the signal candle.
Stop-Loss: below recent swing low.
Take Profits:
TP1 → 1:1
TP2 → 1:2
TP3 → 1:3
Move SL to breakeven after TP1 is hit.
🔴 Sell Setup
EMA 238 is sloping downward and price is below it.
Supertrend flips red — wait for candle to close below the line.
Confirm 1H trend also bearish (optional).
Enter trade at the candle close.
Stop-Loss: above recent swing high.
Take Profits: TP1, TP2, TP3 as above.
🕐 Best Trading Hours (Kenya Time / GMT+3)
Session Time Ideal Pairs Notes
London Session 10:00 AM – 2:00 PM GBPUSD, EURUSD, Gold Cleanest 15-min trends
New York Session 3:30 PM – 7:00 PM US30, NAS100, XAUUSD, GBPUSD Strong volatility, high RR trades
Avoid After 8:30 PM — Market slows down, spreads widen
📌 If you must choose one — trade 15-minute charts during London–New York overlap (3:30 PM – 6:30 PM).
⚖️ Risk & Profit Strategy
Risk only 1–2% of balance per trade.
Focus on 1–3 solid setups per session — no overtrading.
Aim for minimum 1:2 reward-to-risk ratio.
Avoid entries when EMA 238 is flat (ranging market).
💡 Pro Tips
Use “Close of Candle” confirmation — avoid jumping in mid-bar.
Combine with session bias (e.g. buy Gold during bullish NY momentum).
Use alerts through PineConnector to catch trades instantly.
Don’t trade during major red news (NFP, CPI, FOMC).
Journal every trade — review TP/SL behavior to improve timing.
MACD Trading System - Professional V2# MACD Trading System - Professional V2
## Executive Summary
**MACD Pro V2** is an institutional-grade trading indicator combining classical MACD analysis with advanced risk management, multi-timeframe confirmation, and comprehensive performance metrics. Designed for both manual traders and algorithmic systems, this indicator provides actionable signals with built-in stop loss calculation, take profit targets, position sizing, and trailing stop logic.
This indicator is NOT just a signal generator—it's a complete trading system with risk/reward management, performance tracking, and market regime detection.
---
## Core Features
### 1. Advanced MACD Calculation
- **Customizable EMAs**: Fast (default 8), Slow (default 21), Signal (default 5)
- **Confirmed Signals**: Uses barstate.isconfirmed to prevent repainting
- **Zero-Line Position**: Shows MACD above/below zero for momentum context
### 2. Multi-Timeframe Analysis
- **4 Simultaneous Timeframes**: 4H, 1H, 15M, 5M analyzed in parallel
- **MTF Alignment Score**: 0-100% showing consensus across timeframes
- **Smart Requests**: Uses lookahead=barmerge.lookahead_off for accuracy
### 3. Market Regime Detection
Automatically identifies current market conditions:
- **TRENDING** - ADX > 25, strong directional movement
- **RANGING** - ADX < 20, choppy sideways movement
- **VOLATILE** - ATR > 1.5x average, high uncertainty
- **NORMAL** - Default market state
### 4. Integrated Risk Management
Complete position management system:
- **Stop Loss Calculation**: Automatic SL placement based on ATR × multiplier
- **Take Profit Targets**: Calculated using Risk:Reward ratio (default 2:1)
- **Position Sizing**: Scales position size based on account risk percentage
- **Trailing Stop**: Dynamically adjusts SL as price moves in your favor
- **Drawdown Monitoring**: Tracks maximum drawdown vs account
### 5. Advanced Signal Scoring
0-100 point system weighing:
- **MTF Alignment (35%)**: Multi-timeframe confirmation strength
- **Momentum (25%)**: RSI conditions + Divergence detection
- **Volume (20%)**: Volume profile and confirmation
- **Volatility (20%)**: Market regime adjustment
**Signal Classifications:**
- **STRONG (70+)**: High confidence, tight stops, optimal entry
- **MEDIUM (50-69)**: Valid signals, confirm with price action
- **WEAK (<50)**: Low conviction, skip or use tight risk management
### 6. Professional Performance Metrics
Real-time trading statistics:
- **Win Rate**: Percentage of winning trades
- **Max Drawdown**: Largest peak-to-trough decline
- **Sharpe Ratio**: Risk-adjusted returns (anualized)
- **Profit Factor**: Gross profit / Gross loss ratio
- **Consecutive Losses**: Psychological stress indicator
### 7. Advanced Filtering System
- **Divergence Detection**: Automatic bullish/bearish divergence identification
- **Support/Resistance**: Pivot-based dynamic S/R levels
- **Volume Confirmation**: Only takes signals with volume > 1.0x average
- **Session Filter**: Optional trading hours restriction
- **Volatility Adjustment**: Reduces entries in extremely high volatility
---
## How It Works
### Signal Generation Process
**Step 1: MACD Crossover**
- Crossover of MACD above/below signal line triggers base signal
- Uses confirmed values to prevent false signals
**Step 2: Multi-Timeframe Confirmation**
- Checks trend alignment on 4H, 1H, 15M, 5M
- Calculates MTF alignment percentage
- Higher alignment = higher confidence
**Step 3: Advanced Scoring**
Signal is scored on 100-point scale:
- MTF alignment contribution (35 pts max)
- RSI + Divergence (25 pts max)
- Volume profile (20 pts max)
- Volatility regime adjustment (20 pts max)
**Step 4: Filter Application**
- Session filter (if enabled)
- Support/Resistance proximity bonus
- Volume confirmation requirement
- Drawdown check (if risk mgmt enabled)
**Step 5: Risk Calculation**
- Stop Loss placed 2 ATR below entry (customizable)
- Take Profit calculated using 2:1 risk/reward ratio
- Position size scaled to risk 1% per trade
- Trailing stop activated after 1R profit
**Step 6: Signal Output**
- Buy Signal: Green triangle (Strong) or circle (Medium)
- Sell Signal: Red triangle (Strong) or circle (Medium)
- Dashboard shows complete trade details
---
## Trading Scenarios
### Scenario 1: Strong Buy Setup
```
Requirements met:
✓ MACD crosses above signal line
✓ 3/4 timeframes bullish (4H, 1H, 15M)
✓ RSI oversold (< 30)
✓ Volume spike confirmed
✓ Score: 78/100 → STRONG BUY
System provides:
- Entry: Current price
- Stop Loss: 2 ATR below entry
- Take Profit: 2× risk distance above
- Position Size: Adjusted to 1% account risk
- Trailing Stop: Activates at 1R profit
```
### Scenario 2: Medium Buy with Divergence
```
Requirements met:
✓ MACD crosses above signal line
✓ 2/4 timeframes bullish (4H, 1H)
✓ Bullish divergence detected
✓ Price near support level
✓ Score: 62/100 → MEDIUM BUY
Considerations:
- Lower confidence → tighter risk management
- Use smaller position size
- Require additional confirmation
- Better as counter-trend entry
```
### Scenario 3: Ranging Market Filter
```
Market condition detected: RANGING
ADX < 20, sideways movement
System response:
- Reduces signal score by volatility adjustment
- May skip signals entirely
- Prioritizes higher confluence
- Warns of low trend probability
Best action: Wait for trending market
```
---
## Risk Management Deep Dive
### Stop Loss Calculation
```
Stop Loss Distance = ATR × ATR Multiplier (default 2.0)
Example:
- Current price: 1.0850
- ATR(14): 0.0045
- SL Distance: 0.0045 × 2.0 = 0.009
- BUY SL: 1.0850 - 0.009 = 1.0760
```
### Position Sizing
```
Position Size = (Account Risk % / Price Risk %)
Example:
- Risk per trade: 1% of account
- Stop distance: 0.009 on price of 1.0850
- Price risk: 0.009 / 1.0850 = 0.83%
- Position size: 1.0% / 0.83% = 1.2x (capped at 1.0x max)
```
### Trailing Stop Logic
```
Normal SL: 2 ATR below entry
Trigger Level: Entry + (Entry - SL) × Trail Activation (1.0R)
Trailing Mechanism:
- If price hits trigger, trailing SL activates
- SL moves up to: Close - 2 ATR
- SL never moves down, only up (for longs)
- Protects profits while allowing upside
```
### Drawdown Protection
```
Tracks:
- Peak equity reached
- Current drawdown from peak
- Maximum drawdown recorded
- Stops trading if max DD exceeded
Example:
- Peak: $10,000
- Current: $9,200
- Drawdown: 8%
- Max allowed: 10%
- Status: CONTINUE TRADING
```
---
## Dashboard Metrics Explained
### Market Section
- **Market Regime**: Current state (Trending/Ranging/Volatile/Normal)
- **ADX Value**: Trend strength indicator (0-100)
### Position Section
- **Current Position**: LONG, SHORT, or NONE
- **P&L**: Unrealized profit/loss percentage if in position
### Timeframe Section
- Individual 4H/1H/15M trend status
- **Alignment**: Percentage of bullish timeframes
### Risk Management Section
- **Stop Loss %**: Distance from current price
- **Take Profit %**: Target profit distance
- **Position Size**: Capital allocation multiplier
- **Risk %**: Per-trade risk percentage
### Performance Section
- **Win Rate**: % of winning trades (>60% is excellent)
- **Max DD**: Maximum drawdown experienced
- **Sharpe Ratio**: Risk-adjusted return metric
- **Profit Factor**: Ratio of profits to losses
### Indicators Section
- **RSI**: Momentum and overbought/oversold levels
- **Volume**: Current vs. average volume ratio
- **Divergence**: Active divergence detection
---
## Advanced Features
### Divergence Detection
```
Bullish Divergence:
- Price makes lower low
- MACD makes higher high
- Signals potential reversal UP
Bearish Divergence:
- Price makes higher high
- MACD makes lower low
- Signals potential reversal DOWN
Lookback: 20 bars (customizable)
```
### Support & Resistance
```
Method: Pivot High/Low detection
- Pivot Left/Right: 10 bars
- Dynamic S/R levels update as new pivots form
- Bonus score if entry near identified levels
```
### Performance Tracking
Real-time statistics calculated from:
- Win/loss signals
- Profit/loss per trade
- Consecutive losing trades
- Cumulative returns
- Standard deviation (Sharpe calculation)
Stores last 100 trades in memory for statistics.
---
## Input Parameters Explained
### MACD Settings
- **Fast EMA** (5-13): Lower = more responsive, more false signals
- **Slow EMA** (20-26): Higher = smoother, misses faster moves
- **Signal EMA** (5-9): Crossover sensitivity
### Risk Management
- **ATR Period** (default 14): Volatility measurement period
- **SL ATR Multiplier** (1.5-3.0): Stop loss tightness
- **Risk:Reward Ratio** (1-5): Profit target calculation
- **Trail Activation** (0.5-2.0): When to start trailing stop
- **Risk Per Trade** (0.1-5.0): Account risk percentage
- **Max Drawdown** (5-30%): Trading pause threshold
### Scoring Weights
Customize signal emphasis:
- **MTF Alignment** (35%): How important is multi-timeframe
- **Momentum** (25%): RSI and divergence weight
- **Volume** (20%): Volume confirmation priority
- **Volatility** (20%): Regime adjustment strength
### Advanced Filters
- **Check Divergence**: Enable/disable divergence scoring
- **Session Filter**: Restrict to specific hours
- **Min Volume Ratio**: Minimum volume for signal
### Display
- **Show Dashboard**: Main metrics table
- **Show Performance**: Trading statistics
- **Show S/R Levels**: Support/resistance visualization
---
## Best Practices
1. **Backtest Before Trading**: Test parameters on your preferred pairs
2. **Start with Strong Signals**: Use only 70+ scored signals initially
3. **Position Size**: Never risk more than 1-2% per trade
4. **Market Regime Awareness**: Skip ranging market entries
5. **Volume Confirmation**: Always check volume spikes
6. **Profit Taking**: Lock in profits at TP, don't let winners die
7. **Loss Management**: Honor stop losses, don't move them
8. **Performance Review**: Check metrics weekly, adjust if needed
---
## Trading Strategy Examples
### Conservative Strategy (Win-Rate Focus)
```
Settings:
- Signal Score Minimum: 70+ (Strong only)
- Risk Per Trade: 0.5%
- Risk:Reward: 3:1
- Position Size: 0.5x (smaller)
Targets:
- Win Rate > 65%
- Max DD < 5%
- Profit Factor > 2.0
```
### Aggressive Strategy (Profit Focus)
```
Settings:
- Signal Score Minimum: 50+ (Medium+)
- Risk Per Trade: 2%
- Risk:Reward: 1.5:1
- Position Size: 1.0x (maximum)
Targets:
- Win Rate > 55%
- Max DD < 10%
- Profit Factor > 1.5
```
### Trend Trading Strategy
```
Settings:
- Only trade when ADX > 25 (Trending)
- MTF Alignment: 3+ timeframes
- Use Trailing Stop: Yes
- Risk:Reward: 2.5:1
Focus on: Riding large moves
Best on: 4H timeframe
Pairs: Trending majors (EURUSD, GBPUSD)
```
### Divergence Trading Strategy
```
Settings:
- Signal Score Minimum: 60+
- Enable Divergence: Yes
- Volume Confirmation: Required
- Position Size: 0.75x
Focus on: Reversal entries
Best setup: Divergence at resistance/support
Risk management: Tight stops (1.5 ATR)
```
---
## Advantages
✓ Complete trading system, not just signals
✓ Built-in risk management and position sizing
✓ Real-time performance tracking
✓ Multi-timeframe confirmation reduces false signals
✓ Advanced filtering and divergence detection
✓ Market regime awareness
✓ Customizable scoring weights
✓ Professional dashboard display
✓ Support/resistance integration
✓ Trailing stop logic for profit protection
---
## Limitations
- Lagging indicator (uses confirmed bars)
- Works best on trending markets
- Not optimized for news/event trading
- Requires parameter optimization per pair
- Performance varies by timeframe
- Past performance doesn't guarantee future results
- Can produce whipsaw signals in ranging markets
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## System Requirements
- TradingView Premium or higher (for advanced charting)
- Recommended: 4H or 1H timeframe
- Historical data: Minimum 100 bars
- Currency pairs: Works on all FX pairs, stocks, commodities
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## Disclaimer
This indicator is provided for educational and informational purposes only. It is not financial advice and does not guarantee profits. Past performance does not predict future results.
**Important Notices:**
- Always use proper risk management
- Trade only with capital you can afford to lose
- Backtest thoroughly before live trading
- Combine with your own analysis
- Consider external market factors and news
- Monitor positions actively
- Keep emotional discipline
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## Support & Optimization
For best results:
1. Test on your preferred instrument (6-12 months history)
2. Adjust MACD parameters to your timeframe
3. Optimize scoring weights to your style
4. Set risk management per your account size
5. Document your trade results and review weekly
6. Adapt parameters if performance degrades
This is a powerful system when used correctly. Respect the rules and let statistics work in your favor.
