EA based on Quarters Theory

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EA based on Quarters Theory

Postby Giorgi » Tue Jan 01, 2019 3:33 am

I will share simplified version of a strategy I have used with quite some success for a while, hoping we can turn it into a EA for MT.

The strategy is based on The Quartes Theory as already discussed here: http://fxcodebase.com/code/viewtopic.php?f=27&t=65146

I actually use a few more "moving parts", but this simple version is a good starting point.

Timeframe
  • 1h or 30min

Pairs
  • Majors only (with USD)
  • GBPUSD has worked better for me.

Trading Hours
  • Entry on London or NY only. Should be able to configure.
  • I only enter trades from Europe open (London -1) to London Close, and may avoid entries during the switch
  • Exit can be forced at the end of NY or not.

Indicators
  • Moving Averages - In this simple version I use SMA 8 of the same timeframe, but Period, Timeframe and MA Type should be configurable. Also, the ability to check the relation between more than one MA is desirable, for example, only go long if EMA 8 is above SMA 20 and above WMA 8 of 4h chart.
  • Quarters Theory Indicator - Basically an indicator that shows the Major Small Quarter Points and highlights an area of interest between them. (Better explained below)

The Theory
The Major Small Quarter Points occur every 100 pips: At 1.2600, 1.2700, 1.2800 etc (dark green lines in the image)
Besides the psychological effect explained in the book mentioned in the referenced post, these are decision levels for the institutions. They have to decide if price is going to trade around that area or go to the next area.
If we consider a buffer area of +25 and -25 pips around each of these points, we stay with a 50 pips zone around these points that are the "decision zones" (white areas around the dark green lines in the image).
The idea is that once the institutions make up their mind and decide to move price, it will go from one of these areas to the next with certain easiness.

The Strategy

ENTRY
  • Price LEAVES a "decision zone" (Enters the light green zones in the image)
  • Is Trending: Is above Above SMA 8 (for Longs) or Below SMA 8 for Shorts (or more complex conditions)
  • During the limited trading hours
  • Has touched or crossed a Major Small Quarter Points during the previous day
EXIT
  • 25 pips - Stop at previous Major Small Quarter Point.
  • 50 pips - Target at begin of next "decision zone" (Leaves the light green zones in the image).
  • Move stop to B.E. after 25 pips

The Image gives an idea of how it works and how it performed this december.
There are several ways to improve this, like adding more of the quarters theory (more points) and having zones inside zones, or having more MAs to help with the trending decision. But i think whis is a great start.
Hope we move forward with this. Happy 2019

Capture.PNG
Last edited by Giorgi on Wed Jan 02, 2019 9:56 pm, edited 1 time in total.
"Trading is a skill. If you are not good at it it's only because you haven't practiced enough.
Don't wait for some magic tip or someone to take your hand and carry you. It just won't happen."
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Re: EA based on Quarters Theory

Postby Apprentice » Wed Jan 02, 2019 6:16 am

Your request is added to the development list under Id Number 4394
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Re: EA based on Quarters Theory

Postby Giorgi » Thu Jan 10, 2019 5:51 am

Thank you Apprentice.

This is a very good first version.
It is almost there, but the stop and some entries are not according to the requirements.

Here are the original requirements with some comments:

ENTRY
  • Price LEAVES a "decision zone" (Enters the light green zones in the image)
    I think I missed some explanation on this item. By "entering the green area" I meant the candle must open outside that area.
  • Is Trending: Is above Above SMA 8 (for Longs) or Below SMA 8 for Shorts (or more complex conditions)
    I think I failed to make this clearer. The SMA also requires the candle to have opened above or below it and to be outside the "green area" when price enters it.
  • During the limited trading hours
  • Has touched or crossed a Major Small Quarter Points during the previous day
    This is an important condition. To cut through these green areas, price should have touched or pierced the above/below Point recently.
EXIT
  • 25 pips - Stop at previous Major Small Quarter Point.
    Stops are at 50 pips instead of 25. The 25 pip stop puts it at the Quarter Point. Ideally this should be just the default value of a input, so the user could tweak it a couple pips up or down.
  • 50 pips - Target at begin of next "decision zone" (Leaves the light green zones in the image).
    It's excellent. It is being placed at the begin of the next " decision zone" instead of fixed at 50 pips. It is perfect this way. As an upgrade there could be an input to tweak it a couple pips above or below that point.
  • Move stop to B.E. after 25 pips
    Perfect the way it is

I will add some pictures to illustrate
"Trading is a skill. If you are not good at it it's only because you haven't practiced enough.
Don't wait for some magic tip or someone to take your hand and carry you. It just won't happen."
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Re: EA based on Quarters Theory

Postby Giorgi » Thu Jan 10, 2019 6:05 am

Picture with comments on entries

EA 1.PNG
"Trading is a skill. If you are not good at it it's only because you haven't practiced enough.
Don't wait for some magic tip or someone to take your hand and carry you. It just won't happen."
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Giorgi
 
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Joined: Sat Dec 29, 2018 8:08 pm

Re: EA based on Quarters Theory

Postby Apprentice » Thu Jan 10, 2019 3:57 pm

Your request is added to the development list under Id Number 4416
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Re: EA based on Quarters Theory

Postby Giorgi » Sat Jan 19, 2019 2:42 am

Hi Apprentice.

Unfortunately the EA is not working as expected. I couldn't understand how it is entering orders, but it is far from how I trade.
My original instructions might have not been very clear, so I made a video showing how the strategy works. Please take a look and let me know if there are any questions.

https://youtu.be/QvZZ__FnC_Y
"Trading is a skill. If you are not good at it it's only because you haven't practiced enough.
Don't wait for some magic tip or someone to take your hand and carry you. It just won't happen."
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Re: EA based on Quarters Theory

Postby Giorgi » Sun Jan 20, 2019 5:56 pm

Apprentice, was the video helpful to understand the strategy and what is wrong with the EA?
"Trading is a skill. If you are not good at it it's only because you haven't practiced enough.
Don't wait for some magic tip or someone to take your hand and carry you. It just won't happen."
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Joined: Sat Dec 29, 2018 8:08 pm

Re: EA based on Quarters Theory

Postby Apprentice » Mon Jan 21, 2019 8:54 am

Send to the developer, will ask if clarification will be required.
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