TTM Squeeze Indicator Update

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I've received many requests for my version of the TTM Squeeze Indicator. I can't technically call it the TTM Squeeze Indicator because it doesn't have the exact functionality as the indicator that costs $300+.  Specifically, the difference isn't with the actual squeeze indication because that is exact.  The difference is with the corresponding momentum histogram.  While my momentum histogram provides the same trading direction as the TTM proprietary Squeeze indicator (bullish or bearish), it may not provide the smoothing characteristics that seem inherent in their momentum histogram.   So my indicator will provide you with the exact functionality as the TTM Squeeze Indicator for SQUEEZE indication and entry direction.  What it won't provide exactly is momentum change for exit.  They recommend that you exit when the momentum oscillator starts weakening.  I would recommend the same but I cannot say for sure that their momentum oscillator is any better than using the MACD or Momentum indicators for exit.  From my experience, it is best whether your using the TTM or my squeeze indicator to get additional confirmation for exit.  

Either way I find this indicator to be great for showing an "explosion" of volatility and even though you can create this indicator yourself using Bollinger Bands, Keltner or Donchian channels, and a momentum indicator, it just doesn't compare to having a nicely formatted custom indicator with colored dots. 

The real reason for this post was to let everyone interested in this indicator to give me a little more time to release the newest version of it.  Right now I'm providing the FP Squeeze Indicator (Forex Project Squeeze Indicator) version 0.1.  After I've completed version 1.0, it will more closely emulate the TTM indicator, most likely as close as it possibly could.  The only way I can see it emulating the TTM indicator closer is if John or Hubert from TTM reveal more about their momentum oscillator.  

Currently I only provide a version for esignal but I'm thinking about providing it for MetaTrader also.  I've received requests for Tradestation but unfortunately I don't use Tradestation so I don't have any way of programming it on this platform.  

Look for the newest version next week.  If you want me to notify you when it's complete, drop me an email and I'll add you to the list.

Popularity: 7%

Learn:Forex Exclusive Guest Idea

EUR/CAD – April 6th, 2006

 

Our attention is looking away from the USD based pairs with the NFP report due out Friday.

 

Notice the EUR/CAD has been on a month long uptrend with one
correction. We feel it is due for another minor correction. Why? There
are a few things pointing in this direction. First, the candle pattern
(a shooting star). Second, notice the high of the wick yesterday
attempted to test the .618 fib. Fourth, the resistance in this area.
And finally look at the momentum indicator at the bottom…divergence is
forming.

 

 

 

 

 

Popularity: 2%

Another tough week

I had a pretty good CAD trade before my 3rd lot closed out this morning but I missed the bigger move upward.  No need to be greedy though.  Other than that, I’ve had a pretty bad week. 

I cannot say that there haven’t been traces of impulsiveness but generally I’ve been following my stop loss and limits.  This is a good thing.  1 mistake that I have made was making 2 trades because of the advice of others.  This is where I lost a majority of my money this week.  There is no problem with taking the advice of another if you also did the research and study.  But what I did was blindly go with what 1 other person recommended.  I’ve been receiving John Carter’s newsletter this week during a 2 week trial and his latest recommendations didn’t work out.  This isn’t a knock on him because you obviously have to expect losses.  What hurts more to me is that I was not in control enough of myself to make my own decisions.  The only decision I made was to read a newsletter and place a trade exactly as it was written.  If I didn’t want to do any thinking, I shouldn’t have been trading. 

What’s done is done.  I always preach to myself to make my own decisions and live by them.  You cannot expect to make money by listening to a newsletter here and a newsletter there.  That’s a good way to lose your money and fast.  If I subscribed to John Carter’s trading room or was an avid follower of his newsletter, I might expect better results. 

One exciting thing this week has been the development of my 4th custom indicator.  Just like every indicator, it is just a derivative of price but it is suited to my preferences.  I can’t say much more because I don’t know if this indicator will work out yet.  I’m still testing it but the results look promising so much so that it surprised me.  I have a firm belief that there is no holy grail.  I understand that.  But there is a system that you can create that will work in certain market conditions that will consistently make money.  With my programming experience, it is my thought that if I can create such an indicator, it can be totally automated.  This doesn’t mean that I don’t want to study charts.  Supplementing this with a steady money making system is like having another employee working next to you making trades and money for you.  You have to give it direction but generally it works primarily on its own.

Popularity: 2%

March Issue of Currency Trader Magazine

After all of our comments regarding the lack of substance regarding ichimoku chart analysis, the March issue of Currency Trader Magazine fills the gap.  There is a 6 page article, "Demystifying Ichimoku analysis."  I'm looking forward to reading it.  In addition, the new issue contains:

-Dollar Bull: Can the buck stay a step ahead of pundits?
-Japanese Yen: Marching to its own drummer
-Currency Basics: All about the interbank
-Currency System Test of the Trend Strength Indicator

Content Removed: Download from http://www.currencytradermag.com

Popularity: 1%

Forex Project Custom Indicators

I’ve received numerous requests for my version of the Squeeze and the pivot point indicator.  I have started a group on esignal where all my indicators and relevent files are located.  You can download them from here:

http://share.esignal.com/groupcontents.jsp?groupid=852 

I have encrypted the indicator source code so it cannot be viewed or modified.  This is not for any reason but to prevent shady people from publishing my work as their own and from attempting to profit from it.

Popularity: 3%

Busy Trading Week

I’ve been keeping a close eye on the charts this week.  I have never quite felt out of the market whether I’m studying the charts or thinking about what might happen next.  While this can be mentally draining, I feel like it is necessary for my training. 

I’ve kept the indicators on my chart quite busy this week as they must constantly dodge each other on the screen.  Yes, I still have too many indicators yet I don’t feel like any of them should be taken away at this point in time.  I am using the following indicators this week:

1.  Ichimoku - I love this indicator. I’m still learning to use it.  Ichimoku actually means "one glance cloud chart."  I’ve found it very useful for support/resistance confirmation.  In addition, the current trend can be determined in a glance.

2.  Trend Lines - Where would any of us be without these

3.  EMA’s - 21 EMA Wave, 8 EMA, and 50 EMA

4.  Bandwidth - Similar to the squeeze.  This indicator is used to indicate volatility or lack thereof

5.  RMOM - An indicator that I developed that uses MACD histogram values to compute whether the existing MACD value is greater than or less than the last up or down segment

6.  RSI (7) - Relative Strength Index (7 period)

7.  Directional Movement Index

8.  MACD(12,26,4)

9.  Pivot Point Oscillator - An indicator that I developed that I find quite useful now that I made modifications to it last night.  I now paint the pivot point values directly on the indicator.  This saves having to plot pivot lines on the price chart.  Using the 15 minute charts can indicate trend nicely.   See the indicator below:

 

 

 

 

 

 

Popularity: 5%

Consolidation Flags and Broadening Formations

There is a new article on Investopedia with instructions on trading 2 consolidation patterns for profit.

The first is the flag formation which is a common formation in the currency market and indicative of a continuation trend.

1.    Apply trendline to identify the flag formation
2.    Place stop 5 pips above the high or 5 pips below the low of the recently closed candle ONCE a close above or below the trendline has occurred.
3.    Place a corresponding stop two-thirds below previous session’s high or low.
4.    Use your specific rules regarding corresponding limits 

The second is the broadening formation which is commonly a consolidation before the reverse but could also be a continuation indicator

 
1.    Identify the broadening formation through diverging trendlines
2.    Apply entry 5 pips below the low or high of the session once a break has occurred
3.    Use appropriate money management
4.    Use your specific rules regarding corresponding limits

 

 

This article is elementary yet a good refresher.  http://www.investopedia.com/articles/forex/06/ConsolidationPatterns.asp

Popularity: 3%