Tip for entering on the confirmation line before the "Confirmation Arrow" plots

#1

UPDATED AGAIN: As of 2-27-2015 This matches the example Darrell gave in the 2-26-2015 webinar

Tip to better predict if your upcoming entry will in fact confirm and be a valid entry or if it most likely won’t confirm.

Basically this should give you more confidence to ether lay your order entry down on the cyan line as well as confidence for the times you need to choose to hold off on that trade.

This post assumes you have first already setup your “Trend Catcher Chart” using “Apex Diagnostic Bars” and added the “Trend Catcher Indicator” to that chart.

It also assumes that you have already figured out what you feel are the best settings for you to use on your new “Trend Catcher Chart”. For the purposes of this post I will refer to this first chart as your “Trend Catcher Chart” This is the chart you will be using to place your trades with.

Now I am going to help you to create a second chart that I will call your “Range Bar Confirmation Chart” and this second chart is what you will use to help you know in advance (before the confirmation arrow plots) if the pending entry will turn into a confirmed entry or not.

So let’s get started.

First I want you to record your settings in your first charts “Trend Catcher Indicator” you can just go ahead and copy for the parameters. (click in parameters, Cntrl A to select all then Cntrl C to copy)

Copy_Parameters_From_Trend_Catcher_Indicator.png864x191
Copy_Parameters_From_Trend_Catcher_Indicator - TheTraderJoe’s library

Or you can take a snapshot of it with Jing. But while you are doing that I want you to make note of what size your Range is set to in the parameters section 02c section 03. In my example you can see mine is set to “18” and if you look above it in section 02 it is set to “Range” and not “Minutes”.

Example_of_TC_parameters_to_copy - TheTraderJoe’s library

Next: go ahead and open up a “New Chart” I will refer to this second chart as your “Range Bar Confirmation Chart”. When creating it, I want you to make sure that you set the “Type” of chart to “Range” and set the “Value” in my example it is “18”

Now set the “Chart style” to “A.P.E.X. Diagnostic Bars (OHLC)”.

Data_Series_Settings__New_Diagnostic_Bars_Chart_to_be_used_for_T%20C_Entry_Confirmation.png802x624
Data_Series_Settings__New_Diagnostic_Bars_Chart_to_be_used_for_T C_Entry_Confirmation - TheTraderJoe’s library

Next go ahead and add to this new chart the “Trend Catcher Indicator” yes that’s correct, you will have the Trend Catcher Indicator on both of these charts.

Next if you want to copy and paste your settings from your first charts “Trend Catcher Indicator” into the second charts “Trend Catcher Indicator” parameters or you can copy them from your Jing screen shot. But either way you now need to make sure to set the new second Trend Catcher Indicator to match the same settings as you have on your first one.

Make_Sure_Parameters_Match.png1920x1080
Make_Sure_Parameters_Match - TheTraderJoe’s library

NOW WAIT… You’re not finished with this indicator yet so don’t close it. If you did open it back up.

NOW you need to make some additional changes to it. We need to turn off a bunch of stuff that will just get in your way on the second chart. Leave sections 01 alone.

In section 02c. Parameters - Trend Confirmation, change sub 01. Requires Trend Confirmation to False.

In section 03. Display, change sub .05 Show Simulated trades to False, and sub .06 Show Stats to False.

In section 04. Alerts, change sub 01. Enable Visual to False and sub .02 Enable Voice to False.

In section 05. Signals 01. Through 07. Change them all to False.

Now_Change_All_These_To_False - TheTraderJoe’s library

Now you can choose Apply and then close out this indicator or just hit OK.

You now have a chart with which to use like a live real time confirmation indicator.

Squeeze the chart tall and slim you only need to see a few bars worth. Set it to stay on top of your “Trend Catcher Chart” on the left hand side. Use the thumbtack program or right click and choose “always ontop”.

Using_Both_Charts_To_Forcast_If_Entries_Are_Valid_Or_Not.png1900x1078
Using_Both_Charts_To_Forcast_If_Entries_Are_Valid_Or_Not - TheTraderJoe’s library

Now you can change your mouse to “Global Cross Hair” on both of these charts.

As you see a new cyan arrow signal a pending entry, you can place your “Global Cross Hair” mouse at that cyan entry line. Look over to your new “Range Bar Confirmation Chart” and see where it lines up.

If your pending entry is a long entry, then the previous bar to this entry bar on the Range Bar chart MUST be able to close UP or Green. If so then it will be a valid entry if that entry price is hit. You are safe to place your order there. If the entry bar closes in opposite direction just cancel your order.

When checking validity of a short just do the opposite. Does it look like it is lining up for the Range Bar that will be previous to the short entry be a red bar? If so then it will be a valid entry if the entry target price is hit.

Note: Ignore the cyan line that plots on the Range Bar chart. It shows up when live data streams in but does not show in back history. We are using the Trend Catcher Indicator for a different purpose on this chart. ie: creating an entry confirmation indicator on this Range Bar chart. This Range Bar chart is different tick bars than what you are using for your entries and thus the cyan on it plots in the wrong place for you to enter. ONLY use the cyan on your Trend Catcher chart.

#2

Great post Joe, thanks for spelling this out for us!!

Just to confirm if I understand it right - you have the same settings on both your chart’s TC Confirmation Indicators?

#3

Thanks for clearly stating this process

#4

theTraderJoe: Awesome work!!! Very Nice. Thank you!!!

vinny

#5

Hi Trader Joe, lf i am understanding Darrell in another post he says to apply TC to the range bars (no confirmation) and add in the confirmation settings you have in the diagnostic TC- so your basically looking at confirmation bar by bar with the TC indicator on it so you can see all the bars closing. I am really confused now. Thanks

Gary

#6

TTJ,

Please confirm that in the "Range Bar Confirmation Chart’, one has to set this chart with a longer tick size? If so, how much longer? For instance, on CL, wherein I use a 12-Tick bar, will an 18-tick bar for the 2nd chart suffice?

Thanks, Ricardo

Edit: Nevermind, I re-read your post and found it:

#7

Hmmmmmmmmm… Loving what you post and testing it out today. Nice work and ty for the advice

#8

Thanks for all your illustrations on this TTJ.

However, all I see is the second screen mimicking the first screen.

Let me illustrate and please feel free to critique anything here (you will not be able to hurt my feelings!):

I’ve been backtesting this indicator quite a bit but have limited my testing to a single day, 02/20/2015, on CL 04-15. I did this so I can backtest in a controlled and confined environment.

So:

a] Unfiltered and Trend Confirmation set to FALSE, the TC indicator will confirm (red/green arrows) a total of 31 trades, yielding -47 ticks.

b] Filtered and Trend Confirmation set to TRUE, the TC indicator will confirm only 27 trades, yielding +46 ticks.

From this sample, I now know exactly which trades the TC indicator should and should not confirm (total of 4 trades should not receive confirmation signals if Trend Confirmation is ON).

Backtesting again this morning, I watched very closely the trades that should NOT be confirmed and I failed to see any indication from the procedure you illustrated in your post, not to take these trades. In real time trading, one would have most probably taken theses trades, and hence, here is where the main problem lies.

Regards, Ricardo

#9

Ricardo, I see the issue you seem to be having. Instead of only looking at the current bar (which can change and lead to the frustration you are having) pay attention to the current TC direction. I have left my historic pending/confirmation arrows turned on for the range chart and have found that making sure that the TC im about to take is in agreement with the current range chart TC. So, if I have a pending long I am not taking the trade unless the Range TC is either currently long or until it gives me a pending long as well. That has eliminated every problem I was having with hopping into trades and having them reverse on me. Hope that helps!