In Part 79 we discussed the need to redraw a line for the purpose of renaming it and included the RenameLine() function. In this article we’ll discuss detecting whether price is within a price/time zone.
One of the things I’ve noticed about trading is that discretionary trading systems seem to be more profitable than full-blown robots. It’s difficult to teach an EA to find some of the more subtle trading patterns. If you can define a specific set of rules, you can program a robot to follow those rules, but sometimes subtleties are what make an OK system into a great system. That’s most likely why trading is so hard to learn. Identifying a supply or demand zone, for example, should be simple, but it’s not.
I successfully traded Sam Seiden’s All-Star Entry strategy for quite a while. For some reason, it stopped working for me and I’ve never taken the time to figure out why (I should have done that – but that’s a thought for another day.) Since I have a fairly good understanding of my shortfalls as a trader, I realized that I was not going to be successful with a system that required me to watch the charts and sit on my hands for long periods of time. So I developed a hybrid system that allowed me to pick the supply/demand zones manually and then the EA watched the charts and made the entry for me. That allowed me to spend thirty minutes to an hour each day looking at charts and marking zones and then do other things while the EA made the entries for me. I’d never miss another entry because – ooooo squirrel!
The All-Star Entry involves taking trades when price action pierces the Bollinger Band in a supply or demand zone. I would draw my supply and demand zones using a blue rectangle. All the EA had to do was detect when price action pierced the Bollinger Band and entered the blue rectangle. Since I was drawing the rectangles on an hourly chart, there could potentially be several rectangles on the chart at any time. Also, I only wanted it to use each rectangle once – even if a trade had not been triggered. So, not only did it need to detect the rectangle, but if it touched, I wanted to change the color so I would know that this was a “used” rectangle. I could always change the color back if I didn’t think the first touch was sufficient to invalidate the zone.
We’ll look at the code for manipulating the rectangle in our next installment. Thanks for your attention and please follow me on Twitter and LinkedIn.
Winner’s Edge Trading, as seen on: