Here i go with one of my middle-term strategies i'll reveal to you in almost full coverage. Hope you’ll enjoy, and some of you, paper trade its signals & later probably express your opinion in comments how to ameliorate it. The strategy, let it be named “Meques MRS strategy”, tied with four hour ES (S&P 500 e-mini futures) chart. It’s based on MFI (money flow index (14), RSI (relative strength index (14)) & stochastic lines with lots of internal details I’ll try to explain you through statistics.
The strategy gives a buy signal if all of the 3 following issues confirmed:
1) RSI 14 below 32;
2) MFI 14 below 22;
3) Stochastic lines (value line & signal line) are crossing below 22
The strategy gives a sell signal if all of the 3 following issues confirmed:
1) RSI 14 above 68;
2) MFI 14 above 78;
3) Stochastic lines are crossing above 78
Below you can see charts with nice strategy signals examples (on the left chart – sell signal, on the right – buy, respectively; time – CEST). Want to emphasize that only when all 3 signals are confirmed we get buy/sell signal – not earlier. In addition, in the same period chart of SPX (S&P 500 ETF) i’m also seeking a confirmations based on 3 technical indicators i mentioned above.
I have discovered 18 occasions since october of 2008 and have noticed and calculated following facts:
1) 72% strategy signals were correct (or 13 from 18 occasions). It means near 28% of signals or 5 from 18, were false;
2) 83% of the signals were correct (or 5 from 6 occasions) when ES 4hour chart signals (3/3 tech. indicators conf.) were confirmed by 3/3 same technical indicators on SPX 4hour chart;
3) 100% of the signals (but that’s cause of lack of occasions) were correct (4 from 4) when ES siganals were confirmed by 2/3 tech. indicators on SPX;
4) 43% of the signals (3 from 7) were correct when only 1 from 3 tech. indicators on SPX have confirmed them;
So if you enter a trade on each Meques MRS signal only near 28% of time you’ll lose. But statistics above corresponds to the deduction, that if you enter only on signals that are confirmed by two or three from three possible, according to strategy, technical indicators on SPY, only 1 from 5 trades will bring you loss.
If Meques MRS signal have appeared on ES 4hour chart it dosnt mean unfortunately that market will immediately move towards direction signal have indicated. Statistic sais ES can go lower (higher) on an average of 10 points from 6 candles on 4 hour chart (about 1 day/globex session) after correct (not faulty) buy (sell) signal have appeared. What about profit? In the 13 occasions, when the signals were true, profit have exceeded an average of 40 points after 18 four hour candles (near 3days/globes sessions) after the signals have emerged.
I have decided to unveil you my strategy right now, because i can show you fresh example of the signal that was generated in the past session on friday 11th september. As you can see below, on the chart of ESZ9 contract on wich we have rolled-over on 10th september, we got sell signal. Middle chart below represents SPX, whose 3/3 technical indicators confirming ESZ9 sell signal. But ES continued chart (right) brings uncertainty. Cause of previous ESU9 contract didn’t set up technical internals to show overbought signs like ESZ9 do.
But still, relatively to statics data, down the road more than 80% of the odd, ES will start contracting or topping (ranging). Again, back to statistics, it’s possible that ES right from here still will continue climbing & will touch 1050p ES strong resistance level which corresponds to be 50% fibonacci from 6th march 09’ low at 666p & 19th may 08’ high at 1441p. But looks like odds are on, according solely current strategy, we now have already nice opportunity to enter sell position on the technical development, i have depicted above & relevant fundamental basis, i have revealed in the previous post.
The strategy gives a buy signal if all of the 3 following issues confirmed:
1) RSI 14 below 32;
2) MFI 14 below 22;
3) Stochastic lines (value line & signal line) are crossing below 22
The strategy gives a sell signal if all of the 3 following issues confirmed:
1) RSI 14 above 68;
2) MFI 14 above 78;
3) Stochastic lines are crossing above 78
Below you can see charts with nice strategy signals examples (on the left chart – sell signal, on the right – buy, respectively; time – CEST). Want to emphasize that only when all 3 signals are confirmed we get buy/sell signal – not earlier. In addition, in the same period chart of SPX (S&P 500 ETF) i’m also seeking a confirmations based on 3 technical indicators i mentioned above.
I have discovered 18 occasions since october of 2008 and have noticed and calculated following facts:
1) 72% strategy signals were correct (or 13 from 18 occasions). It means near 28% of signals or 5 from 18, were false;
2) 83% of the signals were correct (or 5 from 6 occasions) when ES 4hour chart signals (3/3 tech. indicators conf.) were confirmed by 3/3 same technical indicators on SPX 4hour chart;
3) 100% of the signals (but that’s cause of lack of occasions) were correct (4 from 4) when ES siganals were confirmed by 2/3 tech. indicators on SPX;
4) 43% of the signals (3 from 7) were correct when only 1 from 3 tech. indicators on SPX have confirmed them;
So if you enter a trade on each Meques MRS signal only near 28% of time you’ll lose. But statistics above corresponds to the deduction, that if you enter only on signals that are confirmed by two or three from three possible, according to strategy, technical indicators on SPY, only 1 from 5 trades will bring you loss.
If Meques MRS signal have appeared on ES 4hour chart it dosnt mean unfortunately that market will immediately move towards direction signal have indicated. Statistic sais ES can go lower (higher) on an average of 10 points from 6 candles on 4 hour chart (about 1 day/globex session) after correct (not faulty) buy (sell) signal have appeared. What about profit? In the 13 occasions, when the signals were true, profit have exceeded an average of 40 points after 18 four hour candles (near 3days/globes sessions) after the signals have emerged.
I have decided to unveil you my strategy right now, because i can show you fresh example of the signal that was generated in the past session on friday 11th september. As you can see below, on the chart of ESZ9 contract on wich we have rolled-over on 10th september, we got sell signal. Middle chart below represents SPX, whose 3/3 technical indicators confirming ESZ9 sell signal. But ES continued chart (right) brings uncertainty. Cause of previous ESU9 contract didn’t set up technical internals to show overbought signs like ESZ9 do.
But still, relatively to statics data, down the road more than 80% of the odd, ES will start contracting or topping (ranging). Again, back to statistics, it’s possible that ES right from here still will continue climbing & will touch 1050p ES strong resistance level which corresponds to be 50% fibonacci from 6th march 09’ low at 666p & 19th may 08’ high at 1441p. But looks like odds are on, according solely current strategy, we now have already nice opportunity to enter sell position on the technical development, i have depicted above & relevant fundamental basis, i have revealed in the previous post.
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