Impulse Setup on Gold

As a continuation of yesterday's Post where We explained the Impulse Setup, today We had an excellent example of this Setup on Gold ( GC )

In the attached chart we can see how after the Employment Report at 8:30 ET, the Gold Market had some quick moves almost impossible to trade ( take a look at the  TIS_Bar_Time indicator at the bottom of the Chart showing several bars with time duration close to zero ).

After Maket calmed from the Report reaction, the Bar duration returned to an average of 30 seconds and We had 2 signals ; 

A Short, with only target 1 available ( 10 to 15 ticks ). Rest of position out at break even.

A Long, with first and second targets, and also a possible runner with trailing stop

 If you liked this setup or have any questions and suggestions please post and share !

 Regards,

Pablo Maglio
www.TheIndicatorStore.com

Trade Setup for Impulsive Markets

The most profitable markets are those with Impulsive Movements.

A Market leaves the Trend mode and switches to Impulse Mode when there are no more pullbacks big enough to get into the trade, and when it finally happens the move is finished leaving just a small winner or even a loser.

On volatile markets, the switch from sideways to Impulse is so fast that we dont even get an entry on the first trending pullback. This is why it is so important to define when the Impulse Mode is starting so we can use an early entry.

The most volatile markets are crude oil, gold, silver, nat gas ( CL, GC, SI, NG ).

Cash Index Markets like S&P ( ES ) are mostly on sideways or trending mode. Some of these trend moves may sometimes change to Impulse Mode, allowing to the trend entries increase their profits.

We have several ways combining classic Indicators, to define when the market is Impulsing.

The most used ways to trigger an Impulse Signal are :

1)      A Fast Moving Average crossing outside a Slow Band

2)      A Fast Band crossing all outside a Slow Band ( similar to previous method but with an extra security margin)

In the following Charts we can see both Methods ; ( The vertical Red Line shows where the Impulse Mode Starts on each example )

     

 The Band can be a Bollinger Band, a Keltner Channel or a Fixed Envelope ( like on the examples shown )

We have to take into account that if we use Range Charts, all Bars will have same height, so volatility ( and ATR ) will be constant, turning Keltner Channels into Fixed Envelopes.

Now we have different ways to define the Impulse Mode Signals, now we just need to define the entry.

In a trend system, we use the slow EMA ( like on the PM_EMA setup ), but on Impulsive Moves, the Markets never come back to the EMA.

The entry can be defined again using an envelope ( Bollinger, Keltner, Fixed ) of lower size than the signal envelope ;

An entry for example 1 can be the lower slow band ( green) 

An entry for example 2 can be a 50% of upper fast band ( blue )

As shown, using EMAs and Envelopes to define signals and entries, we can get a big number of different setups. We just need to find the best combination for each Instrument.

Having all these rules automated is a big Help that let us backtest, optimize and even trade any configuration. We at The Indicator Store have a Strategy Pack called PM_Impulse, that contains several individual strategies following different combinations of the explained setups.

If you like this article please leave your comments and share with your firneds

Regards,

Pablo Maglio
www.TheIndicatorStore.com

OpenGap Indicator for NinjaTrader

There is a lot of info about the Gaps, and mainly about those not yet closed ; the OpenGaps. In the following article I will show the several ways we can use the OpenGap Indicator.

To begin, we must define what is a "Gap" ; it is the difference between prior session Close and current session Open.
This definition limits the number of markets where this definiton is valid to apply ; We need an instrument with  a well defined Day Session time like Standard and Poors ( ES ), where there is a  24 Hours Market, but the main Volume is in the Day Session Trading Time.

If the Gap ( Yesterday's Close - Today's Open ) is greater than a certain value ( usually 2 to 3 points in ES ) then we consider there is an Open Gap.

The Open Gaps are followed by lot of Traders, so its importance as Support and Resistance is huge. If We are not following this Strategy, We should at least have into account the existent Open Gaps, to act according to their location. For example, taking a partial or total profit slightly before the next Open Gap is a good idea to start.

In the following picture, we can see a recent example from December 28, 2012:

Another examples form November 2012

These example pictures are using the Indicator OpenGap for NinjaTrader, that can be obtained on the following link

If you liked this article, please comment or share with your friends.

Regards,

Pablo Maglio
www.TheIndicatorStore.com

TIS Squeeze Darvas Setup Indicator

On this New Post I will explain the Squeeze Darvas Setup and how to trade it with an Indicator for Ninjatrader

The Name of the Setup is Darvas_Squeeze and the indicators needed are :

• Squeeze Indicator
• Darvas Indicator

For the purpose of this explanation I will be using TIS_Squeeze and TIS_Darvas but any general Squeeze and Darvas indicators will work fine.

If you are not sure how a Squeeze indicator works, it is very easy to understand, in fact, if you don't have a squeeze indicator, with just a Keltner and a Bollinger is possible to know when there is a squeeze signal condition :

On the following picture we can see a blue envelope ( Keltner Channel) and a green band ( Bollinger Band ).

When the Keltner is bigger ( containing inside) the Bollinger then there is a Squeeze Signal ( red dot on the Squeeze Indicator at the bottom ).

The rectangles are the Darvas boxes, and these are used to define the breakout zone ;

The way to trade this setup is using bracket orders ;

Buy Stop above the box and Sell Stop below the box.

We can use an offset in ticks, where the orders must be placed from the box ; N ticks above for the Buy Stop and N ticks below for the Sell Stop.

So, the logic to trade this setup is as follows :

1. Wait for a Squeeze Condition ( Red Dot )
2. Place Buy Stop over Box + Offset
3. Place Sell Stop below Box - Offset
4. If one orders get filled, cancel the other
5. If no more Squeeze condition ( no more red dots ) and orders are not filled, the trade is cancelled

About the settings to use, the Darvas don't need any input parameter, the only inputs needed are for the Squeeze ( Period, Bollinger Standard Deviation and Keltner Multiplier ).

The period is the same for Keltner and Bollinger.

Some good settings to start with are : a period of 20 , a Keltner Multiplier of 1.5 and a Bollinger Standard Deviation of 2.

Please post any comments, suggestions, and question here...

Also if you have a good combination of settings and want to share them, please post them here...

This setup can be traded using the Combo Indicator TIS_Combo_Darvas_Squeeze

Regards,

Pablo Maglio / www.TheIndicatorStore.com

Best Indicator for NinjaTrader

Several people asked me about which is the best indicator to use...

In my humble opinion it is not related to a specific indicator but to a group of indicators, and the most important is to choose the correct ones and how to set them all together to find an edge.

In the following example I will show you how the Small Range Setup uses a different group of indicators to filter a setup from different scopes ;

The following is a GOLD ( GC 02-13 ) Chart of today ( Dec 20, 2012 ) 

On this setup I use a trendline ( blue exponential moving average )

an envelope ( gold envelope of 8 ticks size around a 17 moving average )

and Donchian Channel of 13 bars.

When the envelope is all below the trendline we are in sell mode...

A bar can trigger a signal, only if it is making equal or higher high for a short, so we check that the high of bar must be touching the Donchian Channel.

If all of these conditions align, then we place a sell stop 2 ticks below the signal bar...

If price continues against our entry we don't get a fill, just another bar with better entry, until the envelope touches the trendline again and the trade is discarded.

On this example, we keep moving our entry up for several bars until we get a fill at 1659.4

The stop must be placed 2 ticks above the high of the entry bar ; 1660.8 so we are risking 1.4 points = $140 per contract.

We usually should go for 1.5 to 2 times the range of the chart as first target ( 15 to 20 ticks ). On this example the move was enough to get 6 points ( $600 ) per contract.

I created a dedicated indicator to follow this setup that does all the calculations, paint the bars, show the indicators used and also places a diamond where you need to place the order... Really easy... More info Here

On instruments like gold or crude oil we should always take into account the option of using trailing stops, because these markets offer great potential.

There are several ways to manage a trailing stop, and that may be one of my next posts...

Regards,

Pablo Maglio

www.TheIndicatorStore.com

Small Range Setup

New Setup : Small Range

link to big picture

This is an old setup focused to trade trending and/or impulsing markets in the direction of the trend.

The Entry Type uses Stop Orders as it is intended for fast volatile never returning markets like crude oil or gold.

This setup uses the following Tools :

• A slow Moving Average to define the Trend (blue line)
• An envelope around a fast moving average to define the trade / no-trade condition
• A channel to verify that the entry bar is making an extreme of the move
• A tool to calculate the range of the bar ( not used on range bars)

When the blue line is all outside the envelope, the setup has a trend. Otherwise it is in neutral state ; gray bars = do nothing.

If we have red bars and current bar is touching the upper channel, then we have a possible short entry.

When not using range bars we can add another condition ; signal bar must be of small range ;

The short entry is a Sell Stop some ticks below signal bar ( usually 2 to 3 ticks ).

If at next bar we have a better entry we move the order to new place, like on example above.

Once the entry is filled, the stop should be placed some ticks above the signal bar.

Using range chart is easy for this setup because the stop is a fixed value ; the range of bar + 2 times the offset. On a 9 range CL chart using 3 ticks as offset, the stop is 15 ( 9 + 2 x 3 )

I have a developed a special indicator for this setup on www.theindicatormarket.com

This is the link :

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...ahora con muchos mas productos y facilidad de busqueda y compra.

The Indicator Store has new Web Page !
..now with a lot of products and an easy to use interface to browse and purchase.

www.theindicatormarket.com