I think I am getting it. So what period do you use for the Bollinger of the RSI? Standard 20 periods of the RSI? And is RSI set to the default 14 period? And the bands are set at what period deviations? Like 1.5 and 2.0? So in all 3 time frames we need to see the RSI bands in the zone between the 2 deviations and same with stochastics? Do you use the Bollinger on the Stochastic too or no need? And how do you come up with the stop loss and take profit parameters?
1. I use 60 periods or samples for determination of the Main and Upper/Lower bands of the RSI (external NumRSI). This RSI itself uses a period of 20 (external RSIPer). For other currencies I've used 10 and 14. The deviations come from the external data (RSIM15_Sigma_2, RSIH1_Sigma_2, RSIH4_Sigma_2). The deviations for the Upper/Lower Limit bands also come from the external data (RSIM15_SigmaLim_2,....). I use additional filters such as actual Bollinger Band spread ATR Limit and Stochastics. I could have used the Bollinger Band concept for the Stochastic test also, but chose not to because this is a secondary filter and and the computation costs additional processing time. I may try to write an EA that replaces RSI with Stochastics for OB and OS zones. I believe RSI works better. The Stop Loss and Take Profit parameters are external data that are determined, along with the other external data, through the MT4 Tester Optimizer. A Trailing Stop, not in this EA, also helps performance. Also note that the T/P, S/L values for Long and Short trades are much different.
What is Bollinger Band Spread ATR Limit used for? The other concept is clear. Use a say 20 period RSI with its 60 period Bollinger Bands and 2 deviations specified that will create a band around the RSI. If RSI goes in any it is OB/OS and must be sme in other time frames too. Can you add a Trailing Stop in there?
What is Bollinger Band Spread ATR anyways? The Higher Time Frames use the same 20 period RSI and same deviations off a 60 period Bollinger Band?
Thanks. How often do you re-optimize? Isn't this kind of curve fitting? Do you need to optimize each pair? Can you explain how you use the Bollinger Spread? Is it like spread between upper and lower bands? Like all 4 or any 2? And what is used to calculate the ATR?
Every currency pair must be optimized separately. Also, optimization differs for each history database source (FXDD, Metaquotes, FXCM...). I use an upper limit for the BB Spread ((upper-lower)/point) in the M15 time frame and a minimum BB spread in the H4 time frame. The ATR is taken from the ATR indicator. The H4 ATR and M15 BB Spread max limits remove high volatility periods of time. These setting and corresponding periods and limits all can be seen in the External data.
Thanks. So if there is a nin. and max. BB Spread how do you work around that in optimizing?