In this article you will find download links and technical information from the german Traders Magazine article „Trading System Development Theories.“ You can get information on the trading system itself from Traders Magazine 05/2011.

Program code

The Forex Hourly System

Analysis Indicators

Theory

The above article explains two of the essential properties of a price data chain, that can for example be introduced into Tradesignal as a chart. The properties are „Trend“ and „Volatility.“ In order to test the findings in the article, there are three indicators ready to download alongside the Trading System.

The trading system itself can be applied directly after importing to Tradesignal. Open a chart, for example the Eur/USD that is used in the article, set the trading period to one hour and insert the trading system afterwards.

Analysis MTF Trend

The indicator calculates exponential moving averages based on hourly and daily closing prices. An accurate analysis of this indicator is only useful in equal or shorter time periods. If the trend phase signal is activated, the selected phases will be highlighted in the chart. The corresponding section of the chart then turns a darker background colour. The available climbing market phase positions will be indicated as price average and gradient of the average. The market phase Day High means that the price lies above the average of the daily closing price. All corresponding Chart sections will be darker. Finally the price divergence will be calculated from the average and placed ready as an indicator. Since Tradesignal cannot display a chart and subchart simultaneously, the trend divergence projection of the indicator „subchart“ will need to be downloaded later on.

Analyse MTF Volatility

The indicator calculates the volatility based on the chart periods and finally on hourly and daily closing prices. For projection the „Subchart“ indicator will need to be downloaded. Also this indicator offers the option of highlighting adjustable market phases in the chart background. The indicator analyses the position to its average or the gradient against the previous value.

Parameter Description Forex Hourly Trading System

Following are the descriptions of all parameters of the trading system:

• Start – defines the start of the trade. Enter here a time in hh:mm format.
• End – defines proposed end of trade. Also enter here a time in hh:mm format.
• Swing Trend – activates the Swing Setup.
• Correction_Trend – activates the Correction Setup.
• Fast – the shortest calculation period of the MACD indicator.
• Slow – the longest calculation period of the MACD indicator.
• Trigger – The calculation period of the signal line of the MACD indicator.
• Trend – The trend filter period which will be calculated as exponential moving average.
• Vola – the calculation period of the volatility indicator.
• Min Range – defined in Swing Setup, how big the trade range of the current trading day must be, compared to the average over 10 days.
• Max Delta – the percentage divergence of current price trends. This value will be used in Correction Setup.
• Percent – percentage of available capital that can be risked per trade.
• Lot - The Lot size of the trading goods pair.
• Max Lots – restricts the calculated share of the Lot amount which will be entered here.
• Stop - Stop in percent of entry price.
• Stop_Adjust – share of the closing range that will act as a buffer to the adjustment of the Stop Loss Price at closing high/low.
• Target – percentage value of the entry price which will calculate the Take Profit Level.

Parameter Description Analysis MTF Trend

• Paint Chart – activates the highlighting of selected market phases in the chart background.
• Select Trend – market phases that can be visualised.
• Period Daytrend – the calculation period of the trend filter based on daily closing prices.
• Period Hourtrend - the calculation period of the trend filter based on hourly closing prices.
• Subchart Output –select the indicator that can be projected in the subchart.

Parameter Description Analysis MTF Volatility

• Paint Chart - activates the highlighting of selected market phases in the chart background..
• Select Vola – market phases that can be visualised.
• Period Vola – calculation period of the volatility based on the trade periods entered in the chart.
• Avg Vola – average of the volatility based on the time periods entered in the chart.
• Period Vola Hour – calculation period of the volatility based on hourly closing prices.
• Avg Vola Hour – average of the volatility based on hourly closing prices.
• Period Vola Day – calculation period of the volatility based on daily closing prices.
• Avg Vola Day – average of the volatility based on daily closing prices.