Tuesday, 25 October 2011

T3 / Triangular Moving Average with BB MACD: Who Will Be Named Champion?

I'm still playing with BB MACD. I think it is a great indicator. But like every other indicator out there, it has its flaws:
  • If you are trading the dots outside of the bollinger bands you would find that it can be a little late to the show
  • If you are trading the change in colour of the dots you would have a number of false movements, not a lot, but enough to make you nervous
So, I've been looking for something to filter this out. I've been browsing Forex-TSD's Elite/Advanced Elite sections for such an indicator, and I think a found a good one worth mentioning. It is a T3 with a Trianglar Moving Average compiled together in a unique setting that, when the two averages cross each other it provides very good entry signals (not sure on the exits just yet). Here's a picture of what it looks like (blue lines are the entry points):

Now, after I lined up all these lines with the T3/TMA and BB MACD entry points, I realize that I could just remove the BB MACD, and have the T3/TMA as a standalone indicator,  assuming that the exit points work ok. So, without the BB MACD entry signals tied in with the T3/TMA we get the below chart:

In this particular time frame (not the charts timeframe, but rather the span of the date) I calculated the how many pips were made in each chart:
  • T3/TMA with BB MACD:
    - 9820 pips total
    - 892 pip average
    - 457 minimum
    - 2508 maximum
  • T3/TMA without BB MACD:
    - 13368 pips total
    - 1215 pip average
    - 519 minimum
    - 3169 maximum
Hmmmm.... might have to give BB MACD the boot.

Well, for now anyway. More testing is need I would think. I believe I'm going to look for a bad situation for the T3/TMA on the charts (if I can find one), and see if BB MACD can correct it, or rather filter it.