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[01 martie 2015] Vamist este prima si cea mai mare comunitate Forex din Romania. A luat nastere in 2005 si de-a lungul timpului a trecut prin mai multe transformari. Acum, dupa 10 ani, primim orice fel de traderi si investitori. Deci, indiferent daca tranzactionezi sau investesti in actiuni, valute, marfuri sau orice alt instrument, bine ai venit!

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To Trade or Not To Trade the Time (part 2)

Posted by tradelover, in MQL Treasure Cave, Points and Figures 07 January 2008 · 3999 views

MQL Treasure Cave
By the way, happy pillaging for 2008!

Well, when talking about the time, there are mainly three schools. Some traders would say that the time is very important. They use candlesticks or bars charts, volumes, money flow index and other tools like that. This category of traders is the largest, and they use manly the price action on their trades, but they consider the time into the equation too. In fact, they use the time "partially". All these methods of charting that I enumerated above are in fact "time dependent" charting. You plot on the chart the price action, in time. That is, on X axis is the time, and on Y axis is the price. But here, time's contribution ends. For every candle, you know the opening and closing time, but that's all. By changing the time frame to a more granulated one, as from daily to hourly, you can have an idea about how the price developed inside of one candle. Eventually, you can get some information about the time when highest price and lowest price were reached, information that is not stored in the daily chart. But you still won't get any clue about the real movement of the price in time, about the "speed" of the price (speed is the time differential), or about the "acceleration" of the price. Indicators as momentum, or ROC, or other, are trying to give you a coarse view of these "time-actions" of the price, but they are also stored "bar by bar" and they are not of much help.

There is a second school (category) of traders that put the time in the first place. They don't use fixed hours, like opening and closing of sessions, or important moments during the week or the month, but a continuous "movement" of the price, and they use different type of charts that show the time-action of the price in the first place. This method use the time in the first place, and then the price. They plot on their charts information as "speed of the price" and "acceleration of the price" and few of them include also weekends into the hotpot. Together with second level quotations, this is a very strong instrument for a momentum ECN trader, but as such brokers require a big amount of money to play with, very few is known about this strategies, and they are not really useful for small traders like us, thus such charting methods are not so common. Maybe I would post in the future some technicals about "total time" trading, like polygraphs and multi-tick charts, but that is not the subject of the current entry.

What I would like to talk about now, is the third class of traders: that traders are not using the time at all. Yes, there is a big lot of traders that trade only the price. Most of them are big fish and they won't talk about their methods. They will keep intoxicating you with bars and candlesticks, as their goal is to gain the money that you are going to lose. They are mainly fundamental traders, that look to the economical data and plot their charts not as bars or candles, but totally time-independent. These traders are not interested in the TIME when a movement of the price took place, but only in the MOVEMENT itself. You can look on investopedia for Renko charts, or Kagi charts, to have an image about how these charts works. But incontestable, the king of "timeless" charting is Point And Figure (called below PF). Kagi charting is a very good tool to show the differences between supply and demand, and can be used by itself in trading long-term-trending markets, with quite a good risk/reward ratio. Kagi works like a Stop And Reverse technique and can give nice profits if traded with a StopLoss on classical SAR indicator curve. Renko charts represent just a pale time-spreading of point & figure charts, and they had some appeal to the people because most of the small traders have their mind "deformed" by candlesticks and bars. They like to see the "time-spreading" of the price in front of their eyes, and they don't feel comfy seeing only the columns of PF. That is where Renko charts come in. The disadvantage of PF is that you can't see the time at all. There is no NortEast/SouthEast movement, but only North/South columns. But this come with an advantage too: trading PF you will improve your discipline. Because you are not anymore interested of price action inside of any square. You just place your trades when the squares change according with your strategy entry, and close them when the squares change according with your strategy exit. If you don't know what I am talking about, you can find and read some materials on web, about PF trading strategies. There is plenty of good (and not so good) books about.

But the big advantage of PF is the time frame that you can see in front of your eyes. What? Didn't I just said that PF is not using the time? Well, it is not. But PF is a "highly condensed" form of the price action. For a normal H1 chart you can see in front of your eyes, depending on your screen resolution, about half a year of price action, even if you go to the lowest magnification factor. If your pair is moving in average 30 pips per hour (common value for some pairs) then your PF chart with a box size of 30 will show you on the screen the price action for the last few years! The resistances and supports are also more reliable, as they are not dependent of broker's behavior (as for example few brokers, like IBFX will show a Sunday candle, other not, this is "pushing" you trendlines on a normal candlestick chart to a different angles). Moreover, the "quiet" periods of the market are compressed in few squares, but the "agitated" periods (that with more opportunities to make money, or... lose money) are expanded. You also can select which box size you like, so it can "fit" you even if you are a long term investor or an intraday scalper. Changing the "time frame" of you candles won't change the "looking" of a PF chart, as they are not time-dependent.

So, the big advantage of PF charting is the fact that PF charting is not time-dependent, and it concentrates only on the price action.

Well, then what is its big disadvantage? Arrr... well... his big disadvantage is the fact that PF charting is not time-dependent... Don't smile! I know Asimov said it before me (see the end of his novel "The Naked Sun"). You can not see the opening and closing time of sessions, you can not see the weekends, you can not trade the "momentum", and YES, you CAN NOT see anything inside of the squares. Each square is a black box for you, even if it is an X, an O, a green rectangle or a red one, for you all are black boxes. You must wait for the price to jump outside of the box to be able to take any decisions.

So, my problem long time ago was how to improve the utility of the PF charts. Like for example to add to each box some useful info about how the price action inside of the box was. Was it choppy? Was it smooth? How may times the price tried to go out of the box? How long time the price stayed inside of the box? Couldn't be nicer if you were able to see the "fighting"... inside the boxes? Can a box in the middle of a column work as resistance or support level? Can it?

Exactly! I tried to add some time-information to the PF charting. There is not a big deal to do so. It is also quite easy to program it. The big deal is how to represent everything in graphical form to be easy to read, and nice-looking. The idea came somewhere in the mid of the last year, when I got from vamist some PF-charting indicator made by a Russian guy. The indicator itself was not a big deal, it does not consider at all the reversal amount, and it has a lot of bugs. But it gave me the graphical idea. That time we had long discussions on the forum and I tried to put all together and make a nice PF charting tool. I posted some graphics together with their comments and I distributed the tool to some Romanian friends. Few bugs popped up and I had to rewrite a part of it, and later on I added also the history stuff, together with a new version number. There are plenty of comments inside of the source code, so you better read them all before using the toy. Everything is provided "as is" and I won't take any responsibility for your loses, and also I won't claim any of your money in case you make any profit :P.

Here is the toy, and I am quite sure many of you are expecting it. It just took me some time to make some pictures and put everything in a zip. But now, as you got the indicators, be careful, having this files won't make you PF-Master overnight. If you never traded PF charts, better look for a book first, make few strategies, and try to trade them (test them) by your own and with demo money for a while.

Attached File  M_PF.ZIP (204.52KB)
downloads: 641

Open to any question and suggestion.

P.S. By the way, does anyone have a good and freeware Gif Animator?? One who won't make a 5MB file from just few slides.... I tried to attach a small animation with B-Rays and B-Flags, but the file seems to be too big to be accepted by the blog (it says "unlimited space" but....)

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I think I can help you with the animation. Send me a description with what you need and the frames and I send you back the animation :P
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Hey Tradelover,

I've come across your PnF code for Metatrader....just what I was looking for, good work. I've edited it a bit with my very very small knowledge of .mq4. I coded it to alert me on Reversals, really helps me when things get busy. I was just wondering if you could show me how to get it to alert me on breakouts.....I've been staring at your code for weeks, but I dont want to mess it up too much. Anyway, thanks for your time, if you're up to the challenge feel free to email me, ***email address removed by tradelover ***

Thanks again,

Mark *** name removed by tradelover ***

Hello Mark

Thanks for the feedback. I am very happy to get feedbacks from the few people using my tools, and up to now you are the only one, beside of my Romanian friends from the forum. You can modify the code in the way you like it, without any restrictions, but I hope you understand that you are not allowed to distribute the modified version, unless you make specific comments inside for any part that you modified, and the goal of the change you did. Something like "this part added/changed/deleted, etc, by.... to improve such and such feature". And you can add your name to it. For the parts you delete, just put them in comment and let it in the text source. For your personal use, you can do whatever you like with the code.

Unfortunately, I am not interested in distribute automatic trading tools, as "secret" strategies, real time signals, etc. Even for free or for money. This activity is a double edged sword, I don't want people follow my signals and lose money. I am an elite programmer, but I am far away from a forex guru. As you could see, my approach is to give the people tools that can improve their trading skill, not to give them "money making machines". Such machines do not exists, sooner or later they cease to work and your customer will be starting to blame you. If you give a man a fish, he can feed himself once. If you teach him fishing, he can feed himself for ever. However, if you have your own strategy, I could help you implement it, for free or for a small amount of money, depending of the complexity. Free implemented strategies would be available to the public on the forum, this is a condition. Paid ones won't be made available to anyone else and I won't use them or mention them wherever else.

The upgrade you ask for, is available in Full Version, but I did not decide to sell it yet. Sorry. However, to implement it, you don't need to alter the code inside of M-PF indicator. You can create your own EA and use iCustom() function inside of that EA, to get the signals from M-PF. You will get a 0 every time when a new candle is created but no new PF box is added, you will get a 1 or -1 every time a new column of X's or O's starts (trend reversal) and you will get a 2 or -2 every time the previous column continues with a figure of the same type (trend continuation). More comments about are given in the source code of M-PF at the FAQ section. By testing the output of iCustom() and the price level, your EA can spot breakouts, reversal points, flags, etc, it can give real time signals or even place trades, is up to you. You are free to create such a tool and distribute it for free or for money, I don't care. But please understand that I will never make a M-PF tool to trade instead of you, if you want to survive in this market, you have to learn trading by yourself.

Sorry for bringing the discussion with you here. If you really like my tool, then you can help me to improve the traffic on my blog :P and post your further comments directly here.

Happy pip-pillaging.
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please help me. i have been working so hard to become a pro trader and i really want to take a good look at the paper trader indicator but i can not get it to work.

i download it unzip it and drag it to expert/indicators. i even tried compile and got no error. i have had this happen with different indicators but i cant live without this one i have a feeling. and buy the way thank you for this knowledge, and hopefully indicator. i think my vista dose not do zip files to well.
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What do you mean you can not get it working? What does it do? Or what does not do? Do you see any boxes? Do you see any colored rectangles on screen? What messages do you receive in the log file? (please see the journal and experts tabs in terminal window). Are you trying to test it in real time, or with Strategy Tester?

Please give me some tips so I could know what your problem is. If you can unpack it and recompile it without errors, then there is no "zipping" or "vista" problem, most probably there is a MT4 problem, or some bug in the code that I am willing to fix, for sure. This unless the indicator is in fact working, but it does not do what you expect it to do. This is an indicator, it can not place trades for yourself, and you must copy it to the custom indicators folder, not in expert folder), and his work is to paint you the PF charts, over the normal candlestick (or bar, or close only) charts. That is all, how you use this information in placing your trades is up to you.

Fair winds!
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