Trade Speedometer

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Trade Speedometer

Postby irvin_verma » Tue Nov 06, 2012 12:08 pm

Hi,
Can anyone code a Trade Speedometer Indicator?
I think it will be of great use in predicting / deciding the direction and size of the next candle.
I backtested my formula for this on EUR/JPY and EUR/USD and it gave astonishing results.

Speed of trade = (Price Change / Volume) per unit time.
= (Open-Close)/tick volume in the default period.
If SoT of current candle is greater than twice the average SoT of the selected period, next candle will be in the same direction of the current candle. (Our signals can be given at the close of the current candle).

Caution: If current candle is followed by same color 2-3 candles, no signal is to be given.
As an example:
Date E/J(Open) E/J(High) E/J(Low) E/J(Close) Volume(E/J) Direction Price change Speed
11/06/2012 03:56:00 102.456 102.456 102.429 102.429 96 DOWN -0.027 2.81
11/06/2012 03:57:00 102.429 102.429 102.398 102.413 158 DOWN -0.016 1.01

as speed is greater than 1.70 (average of 14 candles), it predicts that next candle will be down.

This indicator can be made to look like a speedometer or just the number can appear with the signal on the candle. I think this will help a great deal in making right decisions.

The theory behind this is that every rise or fall needs a force or inertia greater than the existing force, so as soon we see or capture such extra force, we can determine the next candle direction and values also.

I am looking forward, if someone may try it out.

Thanks.
Irvin
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Re: Trade Speedometer

Postby mstreck » Wed Nov 07, 2012 5:25 am

Hi,

I am just curious to see what do you use for the tick volume. Do you use any already existing indicator to estimate the tick volume, and if so, can you post this? With that being available, the rest of what you ask for should not be that hard to implement.

Sounds like an interesting concept!

Cheers,
Martin
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Re: Trade Speedometer

Postby Apprentice » Wed Nov 07, 2012 6:15 am

sot.png

This is the first draft of indicator.
I need more clarification on data presentation.
and the formula used for the calculation.
For example, you are using the Open - close or ABS (Open-Close)
If you have Excel example this would be a great help.
Numbers you are using Do not add up.
SoT.lua
(1.92 KiB) Downloaded 672 times
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Re: Trade Speedometer

Postby irvin_verma » Wed Nov 07, 2012 9:29 am

HI,
FIRST OF ALL THANKS A LOT FOR TAKING THE TIME TO DEVELOP THIS ASTONISHING INDICATOR.
i DO UNDERSTAND YOUR QUESTIONS AND HOPE TO ANSWER THEM. I HAVE ATTACHED THE EXCEL FILE I USED AS CALCULATION FOR BACK TESTING.

THE OUTPUT I EXPECT SHOULD BE IN THE FORM OF AN ARROW UNDER (UP) OR ABOVE (DOWN) ON THE CURRENT CANDLE, IF THE FOLLOWING CONDITIONS ARE MET.

SPEED OF TRADE = PRICE CHANGE ([ABS(CLOSE-OPEN)]/ VOLUME)*10000

1. SPEED IS > 2* AVG. SPEED OF SELECTED NO. OF CANDLES, THEORETICALLY, IT HAS DOUBLE THE AVERAGE FORCE TO MAKE THE PRICE CHANGE IN THAT DIRECTION, SO THE PRICE SHOULD CONTINUE IN THE SAME DIRECTION FOR ANOTHER CANDLE. WE ARE CONCERNED WITH DIRECTION ONLY YET. THE QUANTUM OF PRICE CHANGE CAN ALSO BE PREDICTED, BUT I M WORKING ON THE FORMULA YET.

IN THIS CALCULATION THE AVG. SPEED HAS BEEN 0.75.

IN THE EXCEL FILE SIGNAL CALCULATION IS LIKE THIS (IF SPEED > 2* (AVERAGE SPEED OF LAST 5 OR 10 OR CUSTOMISED CANDLES) SIGNAL DIRECTION IS SAME AS CURRENT CANDLE. 1 DENOTES SIGNAL WENT CORRECT, 0 DENOTES IT WENT WRONG. ALSO IF THE PREVIOUS CANDLE IS OF THE SAME DIRECTION, NO SIGNAL EVEN IF THE SPEED IS IN RANGE. SPEED GREATER THAN 4 WILL SIGNAL A DEFINITE OPPOSITE, MEANING IT HAS BEEN ENOUGH, NOW A DIRECTION CHANGE IS UNAVOIDABLE.

I THINK THIS WILL BE OK NOW.
LET ME KNOW IF ANY QUESTIONS.

THE MAJOR USE OF THIS INDICATOR WILL BE IN PREDICTING A DIRECTION OF TRADE, AND ASSESSING WHETHER THE CURRENT TREND WILL CONTINUE FOR ANOTHER CANDLE OR WILL IT STOP OR REVERSE. I AM BACKTESTING IT ON HIGHER TIME FRAMES.

THANKS A LOT.
IRVIN
Attachments
SPEEDOMETER.xlsx
TRADE SPEEDOMETER
(51.94 KiB) Downloaded 853 times
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Re: Trade Speedometer

Postby irvin_verma » Wed Nov 07, 2012 12:49 pm

Hi apprentice,
I am grateful you made this indicator,
I have just tested it on live trades 1min and 5 min and it gives almost perfect signals for next candle direction. For your info, just let me share how i have used, whatever was available.

If at the close of a candle the SOT value is greater than 0.000200, next candle will have the same direction (color) as of the current candle. It will be true for almost every color changing candle. I checked and it is resulting in 123 / 138 correct signals.

Thanks again.
Please try to incorporate the other details.
Just wanted to inform you.
Irvin
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Re: Trade Speedometer

Postby Apprentice » Tue Nov 13, 2012 8:03 am

recapitulation
1.Speed > 2x average
Give Signal in Direction of Durrent candle

2.Speed ​​> 4 or 4x average (not 4x Average)
will give opposite signal to current

IF THE PREVIOUS CANDLE IS OF THE SAME DIRECTION, NO SIGNAL EVEN IF THE SPEED IS IN RANGE.
Can you explain this, is it like this.
if we have Up indication and Up Signal -> No new signal is given.
if we have down indication and Up signal -> Give Up Signal

if we have Down indication and Down Signal -> No new signal is given.
if we have down indication and Up signal -> Give Down Signal

Once you compare it speed with the average, the second time u use stand alone speed number .
Descriptive often is not unambiguously, more mathematical definition is desirable.
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Re: Trade Speedometer

Postby irvin_verma » Tue Nov 13, 2012 10:17 pm

Hi,
After having worked a lot on this i have concluded that the best way to use this indicator is to have two SOTs, one we already have HL or OC, and another the average of this SOT for given (user defined ) number of candles, like 3, 5, 7 etc.

The signal should appear if the current candle SOT is greater than AVG SOT line, the arrow should point in the direction of the current candle. These conditions can also be left to the user to define, like signal arrows in the same / opposite direction if:

1. SOT is Less than AVG SOT
2. SOT is greater than AVG SOT
3. SOT is within specified range
4. SOT is out of specified range
5. SUPER SPEED MOVEMENT denoted by thicker arrow if SOT is greater than 4times avg sot or less than 1/4 times AVG SOT.

The previous candle filtering can be avoided if these conditions are used. Because then we know we are already in a given trend.

It would be great to get the two lines on screen the SOT (we already have) and the AVG SOT (user defined number of candles) with a different color. The behaviour of these lines would be very interesting in predicting the future trend.

Thanks a lot.
Waiting in anticipation......
Irvin
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Re: Trade Speedometer

Postby miafx666 » Mon Sep 15, 2014 4:43 pm

Hi Apprentice!

Have you coded final version of SoT indicator with all conditions yet? I am very interested in , but i dont understand to some things which irvin wrote. ie. What average did irvin use in excel file?
How works indi on screenshot, i cant see any average line. Can anyone explain me if this theory is still working?

Thanks for replies.
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Re: Trade Speedometer

Postby Jeffreyvnlk » Sun Sep 21, 2014 7:20 pm

miafx666 wrote:Hi Apprentice!

Have you coded final version of SoT indicator with all conditions yet? I am very interested in , but i dont understand to some things which irvin wrote. ie. What average did irvin use in excel file?
How works indi on screenshot, i cant see any average line. Can anyone explain me if this theory is still working?

Thanks for replies.


You can draw the SOT moving average by yourself on Marketscope.May I explain a bit:
-The set up:SOT must exceed a threshold
- The filter: today candle is opposite of yesterday one
- The trigger: the day when SOT twice X day average but less than four times
Then long if today green, short red

Hope that helps
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Re: Trade Speedometer

Postby miafx666 » Mon Sep 22, 2014 7:20 am

Jeffrey wrote:



You can draw the SOT moving average by yourself on Marketscope.May I explain a bit:
-The set up:SOT must exceed a threshold
- The filter: today candle is opposite of yesterday one
- The trigger: the day when SOT twice X day average but less than four times
Then long if today green, short red

Hope that helps

Hi Jeffrey

Do you use this method successfuly? How to draw moving SOT average in platform? Can we chat via PMs or Skype? I will be very delighted.
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