Really good reversal bar!

Marbo 2007.03.05 15:20

Hi,

in the last time I noticed that one formation similar to a doji is very useful.

A long reversal bar:

- Low of the last bar must be lower than the lows of the last X bars (X should be tested. It seems to me that 4 is pretty good.)

- Close must be equal or higher than open

- High - Low < Y pips (y should also be tested)

The opposite for a short reversal bar:

- High of the last bar must be higher than the highs of the last X bars

- Close must be equal or lower then open

- High - Low < Y pips

The very important thing is that you use the long reversal bar ONLY in uptrends. If you have a correction/retracement you can very often find a long reversal bar at the low. Of course short reversal bars should only be used in a prevailing downtrend.

These reversal bars are really good to give you a great entry after a retracement.

Have a look at the chart where you can see some examples. I marked two of them.

I would be very thankful if somebody programmed this idea as an indicator. If the last bar is a long reversal bar the computer should e.g. play alert1.wav and if it a short reversal bar alert2.wav should be played. This is important because if you know that we are in a downtrend you should not trade a long reversal bar. Therefore it is nice to hear which bar occured so you needn't have to watch it.

Marbo

PS. I use it on GBPUSD 5 min and 15 min.

Files:

gbpusd_3.gif 22 kb

toccata 2007.03.05 16:26 #1

Should be quit easy to program but you need to define mathematically your definition of an up/down trend. Might be quite interesting in coding this into an EA.

trevman 2007.03.05 17:35 #2

i feel that on a 5min the highs and lows are false, since a 5pip spread will mean if nothing moves you will have a high and low likely to meet your specifications, unlike a 1hour.

Marbo 2007.03.05 19:03 #3

@toccata: In my opinion it is impossible to define the trend mathematically. I do it visually by looking at local highs and lows. But I would be really glad and happy if you could do this reversal-bar indicator. Maybe I get some more ideas to improve the usage during trading.

@trevman: Of course the reversal bars also work really good in higher timeframes. If you look at a H1-chart you see many good working reversals. But I don't like to have stops >20 pips. Therefore I prepare the 5 min and 15 min chart. The reversal bars are smaller then and my stop is also tighter.

Fractals - Bill Williams' Fractals - Bill Williams' Fractals - Bill Williams'

Marbo 2007.03.07 08:22 #4

is really nobody interested to make this small indicator?

Marbo 2007.03.09 19:22 #5

I already tested it... but unfortunately it doesn't contain what I need...

pinedajp 2007.03.28 23:17 #6

Reversal Bar Indicator

I programmed an indicator according to Marbo's description; however I don't know if I'm allowed to post attachments in this forum (I guess there is a minimum number of posts in order to be able to post attachments).

I will mail the indicator to Marbo and if it is what he had described; he can then post it for everyone.

Great Trading to you all !!!!

Defining data source for Parameters and arguments OrderCheck