Central to your success as a trader is the ability to verify a strategy’s profitability. With countless trading ideas on the horizon, how do you determine which ones have merit? You could manually trade each strategy and record your results. If you’re a part-time retail trader on the higher timeframes, you’ll probably take a few months […]
A trailing stop is a dynamic stop loss that moves in tandem with prices to protect your floating profits. If you’re in a long trade, the trailing stop moves upward as profits accrue. If prices move against you, however, the stop does not move. The chart below shows a 100-pip trailing stop applied to a […]
The Money Flow Index (MFI) is a lesser-known relative of the RSI that incorporates the use of both price and volume. I’ve previously discussed how tick volume can be used to improve signal reliability. Can the use of volume help the MFI outperform other momentum indicators? Here I’ll build a trend following strategy using both […]
The Moving Average Convergence/Divergence (MACD) is a household name in the world of technical trading. Developed by Gerald Appel in the 1970s, it measures momentum by plotting the difference between two exponential moving averages (EMA). MACD Calculations I’ll use MT4’s default MACD from here on out. It consists of two lines: The main line and […]
If you’ve ever used a technical indicator, you’ll understand the perennial conflict between lag and reliability. You want your indicator to respond quickly to prices, while minimizing the number of false signals. In his book Cybernetic Analysis for Stocks and Futures, John Ehlers developed the Laguerre RSI as a way to minimize both the noise […]
