Data Sheet for FX AlgoTrader Multi-Currency Real Time Daily Range Analyzer

Transcription

1 Data Sheet for FX AlgoTrader Multi-Currency Real Time Daily Range Analyzer Product Overview. The FX AlgoTrader real-time multi currency range analyzer provides a powerful macro level perspective of the forex spot market. Traders using this indicator have the ablity to analyze a wide spectrum of forex pairs from a single chart window. The system constantly monitors the achieved daily range for 24 currency pairs and then compares each pair s range with it s 14 day Average True Range. This comparative result is displayed as a histogram for each pair. The visual representation of achieved ranges allows traders to instantly see which pairs have moved the most or least in relation to their typical daily range. The indicator monitors the frequency which pairs make new highs or lows within the current chart timeframe and also calculates the average number of new high/lows over a 5 bar period. Using this high/low statistical data allows traders to very quickly determine the mood or flow of the market based on the analysis timeframe. The average high/low frequency count are the most significant numbers. They are labelled as 'Av/5 Bars' on the chart. Pairs with comparatively high readings indicate liquidity and a pair which is making consistent new highs or lows. The longer the analysis period (dictated by the chart timeframe) the more significant this data becomes. Pairs which are making new highs and new lows within a 5 bar period (ie you observe similar readings for both new highs and new lows) are whipsawing and potentially suitable for range trading. Pairs with just a high average frequency count would be potentially suitable for long only trades. The opposite is true for pairs only registering significant low average frequency counts they would potentially indicate short opportunities. The chart timeframe on which the indicator is run is important. If you scalp it is best to run the indicator on short term charts ie 5 or 15 minute charts. The high/low statistics data will take 5 bars to fully populate so if you run the indicator on a 5 minute chart it will take 25 minutes to fully load the internal data buffers. If you run the indicator on an hourly chart it will take 5 hours to fully populate. If you trade the London open and you trade off hourly charts it would be sensible to load the indicator at least 5 hours before the London open or leave it running overnight. Note: Whenever the timeframe on the chart is changed the analyzer will reset and loose all the accumulated data. It is therefore better to leave the analyzer running on it's on chart not used to trading. Component breakdown of the Analyzer.

2 Practical Interpretaton of Data. Screenshot taken 04/02/11 10:48 - Timeframe 5 minutes

3 Observations - Cable (GBPUSD) is making highest number of new lows over a 5 bar period. This signifies it is trending down in the immediate short term. Euro showing moderate strength against sterling as EURGBP shows new high in the last 25 minutes. (The Red '1' in the 'Av/5 Bar' column) USDCHF making new highs (The '2' in the 'Av/5 Bar' column) Best pairs to examine for trade opportunites are: GBPUSD, EURGBP and USDCHF.

4 The hourly Cable chart with V3 pivots indicator clearly shows Sterling unde pressure. The previous days low has been broken and the next intraday support level is S1. Short term short opportunities may be available on retraces to price derived SR levels/technical levels (Pivots/Fibs)

5 EURGBP potentially breaking out on hourly chart. Best trade would be to wait for retest of support and go long around price derived SR level. Lower level technical analysis is required to pin point entry.

6 USDCHF hourly chart showing USDCHF in uptrend with V3 pivots overlayed. Best trade - long at central pivot which was a proven support level 2 and 3 hours previously. External Input Parameters External input parameter description. Vertical_Position - controls the vertical display height of the analyzer screen output. Alert_Threshold - notifies the trader when x number of new highs or lows has been achieved for a given pair. Reset_Frequencies_On_New_Bar - if set to true the analyzer will clear the current 'H_Freq' and 'L_Freq' data buffers. H_Freq_Color, H_Freq_Av_Color, L_Freq_Color,L_Freq_Av_Color - defines colours for data items Pair Data - eg EURUSD - true/false - if true the currency pair will be included in the analyzer calulations. Troubleshooting "No History Data" - This condition occurs where your MT4 platform either doesn't support the asset or doesn't have enough price history for a calculation to be performed. The solution is:- Check the asset is supported by looking at the MT4 Market Watch function. If you can open a chart for the asset then do so. Scroll through some timeframes for the asset which you have a history problem with - this will suck data off the brokers server

7 If the above doesn't work - open the MT4 History Center (Press F2) and download data from your broker for the asset you are having a problem with