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(Ask) Accurately Predict the Direction of the Next Candle (Forex best kept Secret!)

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  • (Ask) Accurately Predict the Direction of the Next Candle (Forex best kept Secret!)

    Hi guys, i've been trying to create an indicator based on a research found on : FXCodeBase.COM: Forex Chart Indicators and Development • View topic - Trade Speedometer

    Basically the idea is to use price, volume and the average speed of the last 10 or 14 candles to predict the direction of the next candle.
    It is a very accurate theory. Please read the posts of "irvin_verma"

    His back tests with the theory is at least 90% accurate, you can download the Speedometer tests he made with MsExcel and cross check.
    It is an accurate theory.
    I've done my own tests with the theory and i must admit it is the best theory i've seen, when it comes to predicting the next candle.
    But when it comes to coding, i'm having a hard time to make all the conditions work
    This is my trial indicator i coded using his theory.
    (Warning, my coding skills are not perfect)


    for some reason, i know I messed up pretty bad when declaring the "if" clauses
    And mine seems to give an alert every second (lame )
    He said that if the SOT >2* AVSOT, it takes the direction of the closing candle. if the closing candle is down, the next candle will be down.
    He gives many complex rules during his last posts...
    the conditions he postulated is really hard for me to grasp when coding.( i tried to incorporate all the rules, but they are conflicting)
    I tried to reach out to him but i guessed he vanished with his secret
    (So he thinks...)

    Can someone with a little time to spare, check into my code and tell me whats wrong? (please read his theory and examples)


    Thanks.
    Attached Files

  • #2
    i tried it on the 5MTF only

    Comment


    • #3
      thank you Sir. Is this repaint?

      Comment


      • #4
        Please Masters try get this right for us

        Comment


        • #5
          Originally posted by ntynamoo
          thank you Sir. Is this repaint?
          not really, the arrows appear once and they never disapear
          the problem is i had trouble with some clauses when i was coding so, sometimes there'll be an up and a down arrow on the same candle.
          Attached Files

          Comment


          • #6
            Sorry I have zero coding skills but will forward this to some buddies.

            Comment


            • #7
              it can be usefull in binary also

              Comment


              • #8
                i checked the spread sheet he posted in that thread. I cant verify the results he has shown there - 90% correct. In column "Signal R/W" he has manually put 1 and 0 but they dont match with the rules he has given. if you put formulas in excel to match with his rules, then you get different results - more like 60% correctness.

                however pnlwise it was not even enough to cover the transaction costs. made 4 pips over 33 signals.

                Do you have the spreadsheet where you tested this.

                Comment


                • #9
                  lol it repaints.............:P

                  Comment


                  • #10
                    Originally posted by stt123 View Post
                    i checked the spread sheet he posted in that thread. I cant verify the results he has shown there - 90% correct. In column "Signal R/W" he has manually put 1 and 0 but they dont match with the rules he has given. if you put formulas in excel to match with his rules, then you get different results - more like 60% correctness.

                    however pnlwise it was not even enough to cover the transaction costs. made 4 pips over 33 signals.

                    Do you have the spreadsheet where you tested this.

                    At first i didn't get it too. it took me 3 months to realize what he was talking about! let me explain

                    ************************************************** **********************
                    Hi,
                    Can anyone code a Trade Speedometer Indicator?
                    I think it will be of great use in predicting / deciding the direction and size of the next candle.
                    I backtested my formula for this on EUR/JPY and EUR/USD and it gave astonishing results.

                    Speed of trade = (Price Change / Volume) per unit time.
                    = (Open-Close)/tick volume in the default period.
                    If SoT of current candle is greater than twice the average SoT of the selected period, next candle will be in the same direction of the current candle. (Our signals can be given at the close of the current candle).

                    Caution: If current candle is followed by same color 2-3 candles, no signal is to be given.
                    As an example:
                    Date E/J(Open) E/J(High) E/J(Low) E/J(Close) Volume(E/J) Direction Price change Speed
                    11/06/2012 03:56:00 102.456 102.456 102.429 102.429 96 DOWN -0.027 2.81
                    11/06/2012 03:57:00 102.429 102.429 102.398 102.413 158 DOWN -0.016 1.01

                    as speed is greater than 1.70 (average of 14 candles), it predicts that next candle will be down.

                    This indicator can be made to look like a speedometer or just the number can appear with the signal on the candle. I think this will help a great deal in making right decisions.

                    The theory behind this is that every rise or fall needs a force or inertia greater than the existing force, so as soon we see or capture such extra force, we can determine the next candle direction and values also.

                    I am looking forward, if someone may try it out.

                    Thanks.
                    Irvin
                    irvin_verma

                    Posts: 39
                    Joined: Mon Oct 22, 2012 11:26 pm
                    Top



                    ***********************************************
                    let me explain what he means


                    1) you need to get the SOT (speed of trade) of the current candle)

                    2) you also need to get the SOT of the 10 or 14 previous candles and you consequently get the average* of the 14 candles

                    3) to get the SOT, you need to get the difference between close and open of a candle. i will call that price change. you divide the price change by the volume and you multiply by 10000.
                    so for the previous 14 candles you get each , their SOT and you sum it, divide by 100 and multiply by 14 ( or the chosen number of candles you are working with). This will give the sot average of the 14 candles.

                    4) to get the direction of the next candle * you use the formula
                    * if SOT>2*SOTAverage of the previous 14 candles, the next candle will take the direction of the current candle.


                    i hope you understand now. in his example, the sot of the previous 14 candles was 1.70.
                    and since the SOT of the current candle is 2.8 and it's greater than the SOT of the 14 candles (1.70) the direction of the next candle will be the same as the current candle. The current candle was down so the next candle will be down.so in other words since
                    SOT>SOTAV price maintained its direction. the number of previous candles to be used is not limited to 14, in is later posts, he talked of 3,5,7. i guessed he fine-tuned his research.

                    you can check this example on his Msexcel sheet on the 5th price with time 11/06/2012 03:56:00. its current SOT was greater than the average sot, and so the price maintained the down direction. You can do the math for the following candles and see that the number of accurate signals as he calculated will be 75 against 9
                    with a total of 90% accuracy.

                    what makes this system work is that ... as he stated earlier

                    "every rise or fall needs a force or inertia greater than the existing force, so as soon we see or capture such extra force, we can determine the next candle direction and values also."


                    he must be some genius to have figured this out. Even if i had a million years, i would never have come up with such theory. its just genius.

                    note when he says "If current candle is followed by same color 2-3 candles, no signal is to be given"

                    all his rules must be followed in detail.
                    i admit it is a little complicated, but I my self, im not a math person but i still understand the whole process.
                    it will be easy for professionals to code it.

                    Comment


                    • #11
                      Originally posted by 05rahul View Post
                      lol it repaints.............:P
                      because im not a professional coder. I got mixed up in many of his conditions. Talk about a fishnet situation!
                      But im still working on it.
                      At last resort, i will add the bull and bear power indicator, money flow index and Williams Percent range to this system.
                      I can make it non repaint very easily but the rules will change and it will not completely grasp the original idea. So the indicator will not be able to
                      predict the exact direction of the next candle but will predict the trend ... which is not what i want right now.

                      Comment


                      • #12
                        He disappeared after they finished coding the indicator, so i guess he's at least a Millionaire by now

                        Comment


                        • #13
                          Originally posted by ntynamoo
                          thank you Sir. Is this repaint?
                          yes, a lot. For now

                          Comment


                          • #14
                            Originally posted by castaluna View Post
                            At first i didn't get it too. it took me 3 months to realize what he was talking about! let me explain

                            ************************************************** **********************

                            let me explain what he means


                            1) you need to get the SOT (speed of trade) of the current candle)

                            2) you also need to get the SOT of the 10 or 14 previous candles and you consequently get the average* of the 14 candles

                            3) to get the SOT, you need to get the difference between close and open of a candle. i will call that price change. you divide the price change by the volume and you multiply by 10000.
                            so for the previous 14 candles you get each , their SOT and you sum it, divide by 100 and multiply by 14 ( or the chosen number of candles you are working with). This will give the sot average of the 14 candles.

                            4) to get the direction of the next candle * you use the formula
                            * if SOT>2*SOTAverage of the previous 14 candles, the next candle will take the direction of the current candle.


                            i hope you understand now. in his example, the sot of the previous 14 candles was 1.70.
                            and since the SOT of the current candle is 2.8 and it's greater than the SOT of the 14 candles (1.70) the direction of the next candle will be the same as the current candle. The current candle was down so the next candle will be down.so in other words since
                            SOT>SOTAV price maintained its direction. the number of previous candles to be used is not limited to 14, in is later posts, he talked of 3,5,7. i guessed he fine-tuned his research.

                            you can check this example on his Msexcel sheet on the 5th price with time 11/06/2012 03:56:00. its current SOT was greater than the average sot, and so the price maintained the down direction. You can do the math for the following candles and see that the number of accurate signals as he calculated will be 75 against 9
                            with a total of 90% accuracy.

                            what makes this system work is that ... as he stated earlier

                            "every rise or fall needs a force or inertia greater than the existing force, so as soon we see or capture such extra force, we can determine the next candle direction and values also."


                            he must be some genius to have figured this out. Even if i had a million years, i would never have come up with such theory. its just genius.

                            note when he says "If current candle is followed by same color 2-3 candles, no signal is to be given"

                            all his rules must be followed in detail.
                            i admit it is a little complicated, but I my self, im not a math person but i still understand the whole process.
                            it will be easy for professionals to code it.

                            Thanks for taking the time to explain this. I am a programmer/trader and my interpretation was pretty much same as what you describe. The thing is, in his spread sheet he didnt have average SOT column and his 1/0 are just marked by hand. when i put these rules in formulas, i couldnt match his 1/0 at all. Also he seemed to do things manually rather than excel calculate things (and he made mistake in the summary where he says total signals are 84. in fact they are 87 and 75 right/12 wrong).

                            I added all the rules as well as SOT > 4*avg rule to give the opposite signal. it just doesn't add up.

                            see my excel file at http://www.fileswap.com/dl/FxnR7TFpuh/

                            Comment


                            • #15
                              Originally posted by stt123 View Post
                              Thanks for taking the time to explain this. I am a programmer/trader and my interpretation was pretty much same as what you describe. The thing is, in his spread sheet he didnt have average SOT column and his 1/0 are just marked by hand. when i put these rules in formulas, i couldnt match his 1/0 at all. Also he seemed to do things manually rather than excel calculate things (and he made mistake in the summary where he says total signals are 84. in fact they are 87 and 75 right/12 wrong).

                              I added all the rules as well as SOT > 4*avg rule to give the opposite signal. it just doesn't add up.

                              see my excel file at http://www.fileswap.com/dl/FxnR7TFpuh/

                              i understand your point.

                              i also don't understand the exact number of candles he used whether 5 ,10 or 14 etc
                              Looking at his final post

                              *************************************************
                              *************************************************
                              Hi,
                              After having worked a lot on this i have concluded that the best way to use this indicator is to have two SOTs, one we already have HL or OC, and another the average of this SOT for given (user defined ) number of candles, like 3, 5, 7 etc.

                              The signal should appear if the current candle SOT is greater than AVG SOT line, the arrow should point in the direction of the current candle. These conditions can also be left to the user to define, like signal arrows in the same / opposite direction if:

                              1. SOT is Less than AVG SOT
                              2. SOT is greater than AVG SOT
                              3. SOT is within specified range
                              4. SOT is out of specified range
                              5. SUPER SPEED MOVEMENT denoted by thicker arrow if SOT is greater than 4times avg sot or less than 1/4 times AVG SOT.

                              The previous candle filtering can be avoided if these conditions are used. Because then we know we are already in a given trend.

                              It would be great to get the two lines on screen the SOT (we already have) and the AVG SOT (user defined number of candles) with a different color. The behaviour of these lines would be very interesting in predicting the future trend.

                              Thanks a lot.
                              Waiting in anticipation......
                              Irvin

                              ************************************************** **
                              ************************************************** *

                              There are just some few things i'll like to point out

                              To make this indicator work, we need to make the indicator to draw lines representing the SOT and the SOTAV in different color lines. With this done, we'll be ahead of future complications.
                              When the SOT crosses the SOTAV irrespective if its 2* or 4* higher, we will be able to fine tune the conditions.

                              when he says

                              "The previous candle filtering can be avoided if these conditions are used. Because then we know we are already in a given trend."

                              That explains why my indicator repaints, because its hook on some weird never-ending clause!
                              So i think if we can get the SOT separate lines, we will be able to test and make more reliable rules.

                              this is another one of his comments that i do not understand completely:

                              ***********************************
                              "Hi apprentice,
                              I am grateful you made this indicator,
                              I have just tested it on live trades 1min and 5 min and it gives almost perfect signals for next candle direction. For your info, just let me share how i have used, whatever was available.

                              If at the close of a candle the SOT value is greater than 0.000200, next candle will have the same direction (color) as of the current candle. It will be true for almost every color changing candle. I checked and it is resulting in 123 / 138 correct signals.

                              Thanks again.
                              Please try to incorporate the other details.
                              Just wanted to inform you.
                              Irvin
                              irvin_verma

                              Posts: 39
                              Joined: Mon Oct 22, 2012 11:26 pm
                              Top

                              ****************************************

                              1) apparently he tested the SOT.lua indicator that has only one line of SOT, on live trades and he was able to predict the direction of the next candles with a very high accuracy

                              2) i don't see any reason why he would lie to the professional coder


                              3) I notice he stopped sharing his strategies when the indicator was about final completion.
                              this only confirms my suspicion: It works!

                              But Yes we Can! Im not giving up on this strategy ( not yet)
                              i still believe there's some truth about it.


                              He also talked of:

                              ****************************
                              "THE QUANTUM OF PRICE CHANGE CAN ALSO BE PREDICTED, BUT IM WORKING ON THE FORMULA YET"

                              ***********************************

                              i think during the final stage of the coding of his indicator, may be it was added too... and i have no idea of what it is all about but judging from this his current formula, i think it will be great.

                              I'm still researching on price and volume, as they hold the key...

                              Comment


                              • #16
                                Originally posted by castaluna View Post
                                i understand your point.

                                i also don't understand the exa..
                                I am not much of a "good" coder, but let me check on this one. It almost relates to my theory... "Speed of the trend" (its as simple as volume increase and the direction (trend) it picks).. but this one seems to be more mathematical... time to look into the logic.

                                Comment


                                • #17
                                  Originally posted by maxpain View Post
                                  I am not much of a "good" coder, but let me check on this one. It almost relates to my theory... "Speed of the trend" (its as simple as volume increase and the direction (trend) it picks).. but this one seems to be more mathematical... time to look into the logic.
                                  Please share more on your theory and its formula. It sounds interesting

                                  Comment


                                  • #18
                                    The Gadi_OBV_v2 and Gadi_OBV_Divergence indicators (On Balance Volume) are pretty astounding at getting the next bar right too. Might be a similar theory? I read a 96page thread elsewhere, mostly about OBV (which is regarded as a leading indicator). Apparently the built-in MT4 one is not correct but the Gadi one is.

                                    Comment


                                    • #19
                                      Originally posted by castaluna
                                      Please share more on your theory and its formula. It sounds interesting
                                      Theory is based on calculating average volume over previous "n" no.of bars (not including the last bar). Then if volume of last bar is 1.5 times average volume -- Buy/Sell depending on the direction of the trend. This theory seems to fail during news spikes, if the movement happens rapidly in one direction and then the other.

                                      I am also using the EMA angle indicator to make sure that boost in volume makes the price move in 40+ degrees..

                                      Note: I never take a counter trend entry (mostly go by H4 and Daily Trend only).

                                      Comment


                                      • #20
                                        Originally posted by ForexNewbie51 View Post
                                        The Gadi_OBV_v2 and Gadi_OBV_Divergence indicators (On Balance Volume) are pretty astounding at getting the next bar right too. Might be a similar theory? I read a 96page thread elsewhere, mostly about OBV (which is regarded as a leading indicator). Apparently the built-in MT4 one is not correct but the Gadi one is.
                                        Yes you are right about that, I have checked into it and I also think its based on average over a period of past bars.. same as the theory I am working on. I will share the EA here once I am done and if its profitable.

                                        Comment

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