Risk Disclosure

Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. View full risk disclosure.

Indicator Comparison Solver


The Indicator Comparison solver analyses the relationship between input sources Indicator A and Indicator B.  Both Long & Short outputs can be customized for multiple conditions.

Parameters

This section is common to all solvers.  A description can be found here.
This section is common to all solvers.  A description can be found here.

Input A

Select the type of data you want the solver to analyze for input source A.  e.g. To compare price data select Price.  To compare an indicator plot against something else select Indicator Value.  For a detailed explanation, see the section on Data Type Selection.

Difference (A-B)

Sets the threshold value for condition Output → (A > B) By Large Amount or More and (A < B) By Large Amount or More to be used.  This parameter must be greater than the Small Amount parameter.

Measurement
Sets the type of measurement to calculate the Max Value.  Possible measurements are PointsTicksRenko Bricks, & ATRs.

Sets the threshold value for condition Output → (A > B) By Small Amount and (A < B) By Small Amount values to be used.  This parameter must be less than the Large Amount parameter.

Measurement
Sets the type of measurement to calculate the Max Value.  Possible measurements are PointsTicksRenko Bricks, & ATRs.

Input B

Select the type of data you want the solver to analyze for input source B.  e.g. To compare input A to price data select Price.  To compare input A to an indicator plot select Indicator Value.  For a detailed explanation, see the section on Data Type Selection.

Long Output

Sets the solver’s Long output value when Indicator A is greater than Indicator B by the threshold value set in Difference (A-B) → Large Amount.

Sets the solver’s Long output value when Indicator A is greater than Indicator B by the threshold value set in Difference (A-B) → Small Amount.

Sets the solver’s Long output value when the difference between Indicator A and Indicator B is less or equal to the threshold value set in Difference (A-B) → Small Amount.

Sets the solver’s Long output value when Indicator A is less than Indicator B by the threshold value set in Difference (A-B) → Small Amount.

Sets the solver’s Long output value when Indicator A is less than Indicator B by the threshold value set in Difference (A-B) → Large Amount.

Short Output

Sets the solver’s Short output values as described in Long Output settings above.

Video Tutorial

This video is from our weekly Workshop on May 29th, 2015.
For more benefit please watch in full screen mode, as this video is recorded in HD.


Examples


Example 1A: The Basics

This demonstrates the basic function of Indicator Comparison solver with the use of a EMA 50 and the Closing price.  This Solver will be used to determine if the Closing price is above or below the EMA 50.

  • Add the Indicator Comparison solver
  • Set Indicator A Type to Price
  • Set Indicator B to EMA 50

The chart below shows a Long signal when the Closing price is above the EMA 50, and a Short signal when the Closing price is below the EMA 50.

Example 1B: The Basics & A Little More

This demonstrates the use of Large Amount & Small Amount properties of the Solver with the same set up as above. This example sets the Solver to allow price to break through the EMA Support/Resistance line by 2 ticks and still provide a signal in the same direction with other indicator.  As price moves from 2 ticks to 5 ticks away the output is reduced.

  • Add the Indicator Comparison solver
  • Set Indicator A Type to Price, and Indicator B to EMA 50
  • Set Large Amount to 5 Ticks
  • Set Small Amount to 2 Ticks
  • Set Long Output values as shown
  • Set Short Output values a shown

The chart below shows a Long & Short signal when the Closing price is within 2 ticks of the EMA.  This is because Long Output (A < B) By Small Amount is set to 1, and Short Output (A > B) By Small Amount is set to 1 which causes a signal to occur even if the Closing price breaks the EMA, allowing for a more organic system.

Example 1C: The Basics Using A Multi-Output Indicator

This demonstrates using the DM indicator with multiple plots.  The Large Amount property is used to filter out unclear & choppy signals from the +DI & -DI plots.  The Small Amount property is used to anticipate a reversal in signal direction by providing a 0.7 output value set in Long Output (A < B) By Small Amount and Short Output (A > B) By Small Amount.

  • Add the Indicator Comparison solver
  • Set Indicator A Type to Price, and Indicator B to EMA 50
  • Set Large Amount to 8 Points
  • Set Small Amount to 2 Points
  • Set Long Output values as shown
  • Set Short Output values a shown

The chart below shows the choppy signals from the indicator were filtered out.  Note A: When the +DI & -DI are within 2 points of each other an output in the opposite direction is given.

Example 1D: The Basics with Volume

This demonstrates using volume and a volume moving average with the Indicator Comparison solver. This example will generate a Long signal when volume spikes past the Large Amount, and generate a Short signal when volume drops below the Large Amount. The ATR is used in the Difference section to help normalize the volume’s volatility.

  • Add the Indicator Comparison solver
  • Set Indicator A Type to Volume
  • Set Indicator B to VOLMA 14
  • Set Large Amount to 100 ATRs
  • Set Small Amount to 0 ATRs
  • Set Long Output (A > B) By Small Amount to 0
  • Set Short Output (A < B) By Small Amount to 0

The chart speaks for its self.

Example 2: Finding Higher Lows & Lower Highs

This demonstrates using the built in Swing indicator of different Swing Sensitivity with the Indicator Comparison solver. Indicator A is configured for minor swings. Indicator B is configured for major swings. The Solver will look for higher low points of 15 ticks or greater for a Long signal, and lower high points of more than 15 ticks for a Short signal.

  • Add the Indicator Comparison solver
  • Set Indicator A Type to Swings
  • Set Indicator A values as show
  • Set Indicator B Type to Swings
  • Set Indicator B values as show
  • Set Large Amount to 15 Ticks
  • Set Small Amount to 10 Ticks
  • Set Long Output (A > B) By Small Amount to 0.5
  • Set Short Output (A < B) By Small Amount to 0.5

Notice on the chart, the lower high was 13 ticks instead of 15 ticks as set in Large Amount and a signal was given. This is because the Short Threshold is set to 0.8 (80%), the Small Amount is set to 10 ticks, and Short Output (A < B) By Small Amount is set to 0.5. At 10 ticks the output = 0.5. Small Amount to Large Amount is 5 ticks, so every tick = 0.1 in the output. Therefore 10 ticks = 0.5, next 3 ticks = 0.3. Result is 0.5 + 0.3 = 0.8