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Trend indicators Forex trading without delay
Every trader who tested at least a dozen trading strategies, knows firsthand how difficult it is to find a trend indicator without lag. So today I wanted to share two algorithms that will help you recognize the trend at its very beginning.
The first indicator is called SLMA, and it is not difficult to guess, he is another version of the moving average, which traders submit most claims about being late.
In contrast to the classical Moving Average calculates the average price over a selected interval, SLMA performs some conversions a user-defined period, after which using the Boolean functions maps the dynamics of prices on multiple timeframes on the chart and displays the final evaluation of the overall trend.
With all these changes and innovations trend indicator works without lag, which is clearly seen in the following graph where I compared the usual MA and SLMA, built on 50 of candles.
Indicators that are not late
Even with this figure, it is certain that the formula of trend "indicator without lag" is radically different from the usual moving averages. Don't change as output parameters MA (with constant period), she never, under any circumstances, will be similar to the SLMA.
To prove it, again comparable "Masha" and reviewed progress but now we need to set the calculation period is not 50, and 5 to the algorithm was less able to compare trends from different time frames:
Signals without delay
And again the indicator SLMA react to market fluctuations much faster than average prices, if he tries to get ahead of the real trend.
Thus, if you consider the fact that this trend indicator no lagging signals, that is, takes place just before the beginning of a new trend, it can be used to search for optimal points for the conclusion of transactions on purchase and sale. It is enough just to compare readings SLMA on different timeframes, for example:
Different TF in indicators
Get some semblance of a system of Three screens Alexander elder:
The first window is the trend indicator without lag shows the global trend in which direction you should trade.
Markings on the second window is used as a signaling module, an asset is acquired at the moment when SLMA is torn up and sold after the indicator line turned down.
A third window by and large not necessary, but the tendency of the very young right can be used to search for signals on a timely exit positions.
Speaking of time frames, probably from some readers, the question arose – "why not have several indicators with different periods on one chart?". Unfortunately, the code in the SLMA that there were some errors, because of which the working window displays the markup is only a single line, i.e. can be at least ten turkeys to attach to chart, but the terminal will see only one of them.
In any case, despite this minor drawback to forgive, this tool will be useful not only in new systems (built from scratch, as they say), it can be a great alternative to the usual moving average and in older techniques.
The "extreme" trend indicator without lag
All Forex indicators can be divided into three groups – the first in one form or another, using average prices, the second is built on tick or real volumes, and others work behind the price extremes and the levels.
An example of the first type have just been discussed above, the volume indicators are useless without the knowledge of candlestick analysis. Representative of the third group I want to tell you today, as it's called Perfect Trend Lines (the second name Neuro Trend).
Perfect Trend Lines on the chart
This trend indicator without lag shows the price reversal, though, when you compare it to the markings from the SLMA, it may seem that he is slightly behind the actual trend.
Here's another two business indicators:
The Chaikin Oscillator
Momentum
Actually, this error is acceptable since the principle of identification of the trend, laid in Perfect Trend Lines, fundamentally different from the comparison of the average prices. It is based on one simple assumption which follows a trend set in a time when the price breaks the last extremum, in particular:
If the exchange rate of the currency pair or the price of any other asset is reduced, then talk about the trend reversal to bullish can be after the quotes will update its latest maximum.
Bearish trend identificireba the opposite principle, that is, to confirm it the price should break the last low.
Without redrawing algorithm
In other words, the bullish trend is a series of rising lows, a bearish trend is a series of lower highs. This logic was laid in the basis of Perfect Trend Lines, the red line shows the maximum and minimum prices for the selected period.
Examples of non-repainting indicators
Thus, this trend indicator is working without lag, because if you say otherwise, you will have to throw away a basic principle that describes the order of formation of any trend.
Finally, I would like to remind you that always act ahead of the trend will not work, especially if you follow the signals of indicators, so from time to time even today considered algorithms will generate false signals.
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| Category: Forex | Added by: (30.10.2017)
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| Views: 436
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