Why a new thread?
1. The original (over 1000 posts) is too long - discouraging for new participants.
2. The ALF method is herein improved and simplified. It will be more effective over different timeframes without the need to modify indicator settings.
Currency Pair And Timeframe:
Any pair, any timeframe.
What is ALF?
Adaptive Laguerre Filter - an indicator created by John Ehlers . It is a superior overbought/oversold tool. There is a free technical paper at Ehlers' website entitled "Time Warp Without Space Travel" which you may download if you really want to know the gory details.
A few thread requests:
Let us refrain from discussing repainting - nothing I post here repaints any candle other than the current one. Period.
Some who followed the original thread will want to try comparing the TVI candles from that thread to the Fractal Candles introduced here. Go ahead, but please don't post screenshots of comparisons in this thread.
Entries, Exits, and Stops:
Entry Guidelines:
Best to trade with the prevailing trend (if there is one). Look at ALF - if it is significantly higher now than it was at the left side of the chart, trend is up, vice-versa for down. If it is about the same, market is ranging.
Do not trade when ALF is flat and PA is cycling back and forth through ALF in a narrow range (20-30 pips or less).
Enter on an open above/below ALF. PA should be appearing to pull away (or peel away) from ALF with candle range increasing over prior bars. The only exception to this is a large one-candle move through ALF - best to ambush this and not wait for the candle to close.
Stop Guidelines:
A few pips on the opposite side of ALF is generally a good place to set stops.
Exit Guidelines:
There are 3 possibilities.
1. PA re-connects with ALF. This is a good exit for trades in which ALF bends in the direction of the trade.
2. A candle of another color. An optional exit for shorter trades when ALF does not begin to follow PA.
3. Because you have a "feeling" about the trade, or the market is jumpy, you have gained 10-15 pips and would like to keep it.
What is Fractal_Candles_SR_v3 and what is it measuring?
Go here http://ta.mql4.com/indicators/bills/fractal or read Chapter 8 of "Trading Chaos" by Bill Williams - support and resistance as delineated by Williams Fractals is what Fractal_Candles is measuring. There are no moving averages involved - only Price Action.
Bars are colored based on the direction expected by the indicator. When bars are not colored they may be thought of as "wait and see" bars. Use common sense with these, however, and don't turn a win into a loss.
Indicators and template posted below:
Download and copy ALF.ex4 and Fractal_Candles_SR_v3.ex4 to the yourmt4/ experts/indicators folder and ALF_SR.tpl to the yourmt4/templates folder.
If you find this thread to be interesting and helpful, don't forget to vote for it - not to gratify my ego but to attract more participants.
Alert Indicator added:
I've added ALF_Alert.ex4 to the attached files. Included are an email option and the facility to change the text of the alert messages. There are also arrows which (optionally) appear when an alert is sent. The arrow colors are also user-definable.
1. The original (over 1000 posts) is too long - discouraging for new participants.
2. The ALF method is herein improved and simplified. It will be more effective over different timeframes without the need to modify indicator settings.
Currency Pair And Timeframe:
Any pair, any timeframe.
What is ALF?
Adaptive Laguerre Filter - an indicator created by John Ehlers . It is a superior overbought/oversold tool. There is a free technical paper at Ehlers' website entitled "Time Warp Without Space Travel" which you may download if you really want to know the gory details.
A few thread requests:
Let us refrain from discussing repainting - nothing I post here repaints any candle other than the current one. Period.
Some who followed the original thread will want to try comparing the TVI candles from that thread to the Fractal Candles introduced here. Go ahead, but please don't post screenshots of comparisons in this thread.
Entries, Exits, and Stops:
Entry Guidelines:
Best to trade with the prevailing trend (if there is one). Look at ALF - if it is significantly higher now than it was at the left side of the chart, trend is up, vice-versa for down. If it is about the same, market is ranging.
Do not trade when ALF is flat and PA is cycling back and forth through ALF in a narrow range (20-30 pips or less).
Enter on an open above/below ALF. PA should be appearing to pull away (or peel away) from ALF with candle range increasing over prior bars. The only exception to this is a large one-candle move through ALF - best to ambush this and not wait for the candle to close.
Stop Guidelines:
A few pips on the opposite side of ALF is generally a good place to set stops.
Exit Guidelines:
There are 3 possibilities.
1. PA re-connects with ALF. This is a good exit for trades in which ALF bends in the direction of the trade.
2. A candle of another color. An optional exit for shorter trades when ALF does not begin to follow PA.
3. Because you have a "feeling" about the trade, or the market is jumpy, you have gained 10-15 pips and would like to keep it.
What is Fractal_Candles_SR_v3 and what is it measuring?
Go here http://ta.mql4.com/indicators/bills/fractal or read Chapter 8 of "Trading Chaos" by Bill Williams - support and resistance as delineated by Williams Fractals is what Fractal_Candles is measuring. There are no moving averages involved - only Price Action.
Bars are colored based on the direction expected by the indicator. When bars are not colored they may be thought of as "wait and see" bars. Use common sense with these, however, and don't turn a win into a loss.
Indicators and template posted below:
Download and copy ALF.ex4 and Fractal_Candles_SR_v3.ex4 to the yourmt4/ experts/indicators folder and ALF_SR.tpl to the yourmt4/templates folder.
If you find this thread to be interesting and helpful, don't forget to vote for it - not to gratify my ego but to attract more participants.
Alert Indicator added:
I've added ALF_Alert.ex4 to the attached files. Included are an email option and the facility to change the text of the alert messages. There are also arrows which (optionally) appear when an alert is sent. The arrow colors are also user-definable.
