This idea is not new, since I remembered that the 1-2-3 Pattern system employs such a method. Regardless, I still decided to design an indicator to display such a pattern. Instead of using the Fractal indicator that came with MetaTrader 4, which uses two bars back and two bars forward to determine Support/Resistance areas, I made an indicator that did two bars back and only one bar forward. It resulted in more signals, and consequently more breakout points. This would not do.
To solve this problem I decided to apply Multiple Timeframes (MTF) to filter out most of my false breakout points. So now whenever price breaks the lower-high or higher-low on a Daily Timeframe I look to the 5-Minute chart to trail my stoploss with each coming support fractal point. Here's a picture of my "rough draft" indicator (longer lines are the Daily Timeframe Fractal points, and the small dots are the 5-Minute Fractal points):
This idea will not give you vast riches, but I think a person could make a small, consistent profit every month.
I have NOT tested this idea to its fullest. So unless you are willing to wait, then I would suggest testing this on your own.
I have to admit, the Cognitum Wave Explore program you suggested is a little on the confusing side. I'm sure if I spent more time with it that I'll figure it out a apply it. However, the program requires $69 dollars that I don't have (mind you that is on the cheaper side for forex related programs).
ReplyDeleteI've come across another program that is more user friendly (especailly for the non-programmer), and doesn't cost a thing:
Forex Strategy Builder
http://www.softpedia.com/get/Others/Finances-Business/Forex-Strategy-Builder.shtml