Class: hybrid indicator
Trading type: any
Time frame: any
Purpose: search for time intervals when buy trades are banned, search for optimal point to open buy/sell trades
Level of aggressiveness: standard
Indicator «ton_gold» is a hybrid indicator which includes features from both standard indicators and so called anti-indicators. The aim of anti-indicators is not generation of trading signals, but generation of anti-signals – detection of time intervals when trading is not allowed because of a number of technical contraindications.
Despite the importance, indicators of this type are very rare. Nevertheless they are quite vital. Here are some examples:
Example 1. Buys on the top of uptrend before its reverse and start of the correction. Technical indicators like averages and trend indicators in this situation will generate buy signals. But buys on the top usually end with sufficient losses. As the result, even trading in trend can generate losses.
Example 2. Buys in the oversold zones. They look like very good trading opportunities. But in case of strong downtrend this can result significant losses.
As can be seen, strong buy signals do not necessarily mean and sometimes even can lead to critical losses.
The same is true for sales.
To avoid such situations anti-indicators can be used. For example indicator «ton_gold» generates signals which forbid buy/sell trades.
In gold version signals are generated based on results of analysis from three analytical blocks as the result the quality of the signals is maximum. One more difference from the demo and silver versions is generation of buy/sell signals. Signals from indicator «ton_gold» are formed on the basis of analysis of different technical indicators (trend indicators, moving averages, oscillators), price patterns and statistical properties of the data. Also additional elements of visualization are added – channel lines (they help to set take-profit and stop-loss parameters of the trade).
Structure of the indicator
Indicator consists of the following elements:
- blue zone – signals about the absence of ban for buy trades. Is not a buy signal, so blue zone shouldn’t be associated with ideal conditions for buy trades;
- red zone – signals about the absence of ban for sell trades. Is not a sell signal, so red zone shouldn’t be associated with ideal conditions for sell trades;
- orange zone – shows moments when buy and sell trades are forbidden. The most typical situations for the cases of buy (sell) are strong overbought (oversold), presence of strong downtrend (uptrend) and other contraindications;
- channel lines – show price value which will not be exceeded during current time frame with probability up to 70% (this probability can be increase by adjusting «Number of deviations» parameter);
- trend lines (red/blue line) – show the direction of current price dynamics using the data filtration.
Rules of trading
Rules of trading are quite easy. The absence of forbidden sign (current price is in the red/blue zone) buy/sell trades in this time frame are not forbidden. The presence of forbidden sign (current price is in the orange zone) trading is not allowed. To ease the work with indicator signals are automatically displayed on the chart. They are marked “buy” (for buy signals) or “sell” (for sell signals).
Profits are set near the opposite channel line (for buy trades – near bottom line; for sell trades – near upper line) or positions can be hold till the opposite signal appears on the chart.