Read more about the Indicator and the EA below
See below a video I have created explaining the indicator and the related Expert Advisor. Additional explanation, test results etc. is available below.
This indicator was discovered when I was studying daily charts for some currencies. What I found out was there are quiet days and then there are days when there are strong movements. I started thinking … what if there is an indicator hidden somewhere in the daily charts that can tell us how the day would progress for a currency pair based on first few hours of trading or based on how much the pair has moved in a particular direction. This is where I found out the below indicator.
First setup the chart with daily period frequency (see the pairs where this has successfully worked below in the test results section.). Now keep the average of distance between open and close points for last 5 sticks handy. Now watch the pair movement for the current day. If the pair rises 3 times or more as compared to the 5 days average of distance between open and close go long. If the pair falls 3 times or more for the day as compared to the average of last 5 days, go short. If you want a mathematical formula that depicts this condition, here it is:
if open > ask and if average of open – close for last 5 stick < 3 times the open – ask go short. Vice-verca means go long.
You must have realized by now that most of my indicators are very basic. What makes them successful is the exit criteria. In this case also, the same logic applies. However, in this case the exit criteria is also very simple. All you do is close the trade at the end of the day.
Test Results (Click on the image to see detailed report)
Here are some tests I ran using my robot program (see below) that I built to work on this indicator.
Note that the robot program has shown success only on the following currencies. You are welcome to try on others but at your own risk!
2 – CAD-JPY pair from Jun 2010 to Jun 2012 – Account grew by 50% in 2 years!
3 – AUD-USD daily chart from Mar 2006 to Mar 2012 – Account Tripled!