Richard Donchian, no longer with us, was the devisor of several trend-following systems, not least the Turtle Trading system, which is still with us.
Donchian channels are a measure of market volatility, much the same as Bollinger bands
and are about as simple as you can get:-
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Found this, which is good for one way of providing an audible alert when the currency pair price reaches a given level of profit/loss.
You’ll need to download audioplus.mq4 file below, and save to your MetaTrader\Experts\ directory.
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If you can’t get the idea of trading forex succesfully during these market movements, I guess it would be back to the drawing-board.
Here’s some nice clean charts – EUR/USD 1-hour, from yesterday and the day before. Overall, you’d probably describe confidence in either currency as weak, with each successive news event setting off a trend one way or the other. The market is undecided, but these are relatively large swings in terms of pips – a sign of the volatile times.
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So you want to trade moving average crossovers, huh? Take a currency pair – if the 12 period moving average (exponential or simple, usually exponential) crosses above the 26 period MA we would take this as a signal to go long on the pair. Things are looking bullish…
This is (largely) the principle behind moving average convergence/divergence, MACD
Here’s an example – GBP/USD 1-hour chart from a week or so back, with (roughly speaking) a double-top pattern formed, the shorter period MA, in red, crossing below the purple longer period MA, and the market going bearish. No real problem with this example.
The Average True Range (ATR), like Bollinger Bands, is a measure of volatility.
It’s another J Welles Wilder production, starting with an index he called the True Range, defined as the greatest of the following 3 values:
Current High – the current Low
Absolute value of (current High – previous Close)
Absolute value of (current Low – previous Close)
The Average True Range is commonly calculated using 14 periods. See the chart below, showing a period of level trading, relatively low volatilitiy, followed by a down trend and higher volatility. Standard Bollinger bands are also plotted.
Here’s a tricky question.
It’s a 5-min chart so the action is thick and fast – doesn’t matter which pair… And the question is what to do at the little bump in the down trend. Parabolic SAR has reversed, and the RSI, plotted below, has also come back above 30 – but, with the wonderful benefit of hindsight, it’s only a pause in the trend…
Heiken Ashi, in Japanese = “average bar”. The standard candlestick uses open, high, low, close price values over the same time period. With Heiken Ashi, previous time periods enter the calculation to provide a modified candlestick. See the chart below of a downtrend…
Ichimoku Kinko Hyo is a Swiss Army knife of an indicator which tries to do the whole lot on one chart – support/resistance levels, trend direction, and entry/exit points of varying strengths. The name is something like ‘one glance’ in Japanese.
Williams Percentage Range, or Williams %R is a momentum indicator similar to Stochastic indicators and again is concerned with determining overbought and oversold levels.
%R = (highest high over x periods – close) / (highest high over x periods – lowest low over x periods) * -100
The range is from 0 to -100 with above -20 = overbought, and below -80 = oversold.
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There’s a set of forex chart patterns which suggest continuation – that is, they are against an established trend, which may resume after their completion.
The flag looks like a rectangle directed against the trend, over a period of 5 to 15 candlesticks. Here’s an example in a bear market
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