Custom/proprietary indicators?

Discussion in 'Index Futures' started by bankroll, May 29, 2013.

  1. Strangely I see many offerings of custom (Ninja Trader) indicators aimed at future traders. I don't know, maybe in a greater percentage than forex traders use proprietary indicators.

    Sure users of this forum are not the main target market for commercial proprietary indicators but maybe some of you hired a programmer to code a custom indicator for you or you only use freely available or open sourced indicators?
  2. Checking all those indicators is like going to a grocery store. You've got your apples, oranges and bananas that are available. But the (really) expensive shiny pink apples coming from some exotic place don't necessarily taste better than the cheaper ones. Let alone you would actually find a golden apple on the shelf somewhere. Somehow that never happens.

    There are probably many people that have "tested" all the indicators that they could lay their hands on, only to conclude that none of them are profitable.
    Personally I think this is some sort of phase many traders have to go through. And unfortunately many get stuck in this phase and can't work their way out of it.

    So if you want a customised indicator, why would you want to pay for one or even want one in the first place ? If someone else did the thinking and programming, it would make sense if that person would just use it for himself. Unless the thinking process stopped at how to make money out of it from someone else (and not by trading it :D)

    To get back to your original question, I'm a strong believer in using a single indicator only. Get to know it inside out. Watch it for months (years even) and see how it reacts to the same situations over and over. Watch the same setups hundreds of times repeat itself and see how your indictors reacts, before and after the fact.

    So to answer your question. Yes, I use a proprietary indicator that I made myself. It was done by watching some existing indicator in real time for a very long time and then I made changes to it so it gave better predictions, smaller stops and combined it with PA.

    The problem with buying an indicator (and let's assume for a minute here that it's a profitable one) is that at a certain moment in time, it will stop working due to changing market conditions. And then you will be left behind in the dark on how to fix this.
    If you do the thinking yourself, you won't have this problem, as you will know how to fix it yourself. Paying a programmer is a different issue of course.

    I'm not at all a good programmer myself btw, so I would recommend a charting package that is easy to use in making indicators and at the same time still performant.

  3. the fx primarily MetaTrader community is Much larger than NT's and proprietary indi-
    cators or trading systems/EAs are either de-coded or figured out and coded then
    posted on the fx forums. the fxers are also into posting/sharing their systems, indi-
    cators and eas, not so with NT, in part don't think there's a futures specific forum as
    is the case with fx - old school new school
  4. expiated


    In this setup I have added some proprietary indicators I just now coded that I am very much looking forward to testing tomorrow. The one in the bottom panel fills the same role as the average directional index (ADX) except that I do not like the ADX indicator—but I DO like my non-directional substitute for it.


    A trending asset is signaled by the black line rising above the orange designated level.

    The central panel does the same job as the Minus/Plus Directional Indicators (DI+, DI-), except that once again, I like what I came up with much better, enough that I’m likely to use it, which is more than I can say for DI+ and DI-. Price is trending north when the oscillator rises above the upper two bands, and trending south when it falls below the lower two bands.

    In the upper panel, or the main chart, aside from the three simple moving averages, I have created an indicator that actually draws alternative paths for price to take depending on whether the asset feels bullish or bearish. How cool is that?!!! If the market is bullish, the (black) candlesticks will take the upper green path. If the market is bearish, they will opt for the lower red path.

    These three panels should essentially remove virtually all the guesswork, subjectivity, and doubt from my trading—but whether or not that actually happens when they are introduced to real-world application remains to be seen.
    Last edited: Apr 3, 2018
    Van_der_Voort_4 likes this.
  5. Cleverly sorted out for discretionary trader.I like how you set up the loop when trade goes your way in first panel,because the middle one one seems too noisy so if the trade goes your way you automatically create visual comfort,less doubt.The same indicator tells you where to put mental stops or not to fight the tape.

    Lowest panel imho would be one i look at the most as this takes bias away and combining this in few times frames gives you specific point where turns could occur or price is going to break out from consolidation range.

    Only thing missing is adding some measure of consolidation to be on a look out for break out as from those 3 above it is easy to take too many trades and this is costly.
    Years ago when i did some work in indicators i had either 100 SMA ,100 EMA and 200 EMA or 100 SMA,200 EMA and 200 SMA and very rarely one if these MAs moved between the other two and from this price moves were substantial.I couldn't get direction to be statistically valid,because moves were in either direction,but for discretionary trader studying and testing these could be of help.Those were done on 5 min time frame,but since it is long time ago i don't remember which combination was it,with proper tests and optimizing totally different set of MAs could be more useful.

    Good Luck !
    expiated likes this.
  6. expiated


    Yeah, in real-life application, the so-called trends my indicators were picking up we’re too short-lived for me to trade them practically, with the timing of my entries almost always occurring too late.

    I therefore kept the “loops” as Van_de_Voort_4 called them, and replaced the middle and bottom panels with one designed to reflect the exchange rates’ typical deviations from the central tendency (the squiggly black line). I also introduced Heiken Ashi candlesticks to the setup with the idea being to use the loops, the candlesticks, and the deviation channel to help me enter positions as soon as a given rate began to fall from a particular crest or rise from a selected trough.

    ScreenHunter_7481 Apr. 03 10.48.jpg

    This has been working out much better, essentially putting an end to the losing trades I was encountering earlier…

    ScreenHunter_7480 Apr. 03 10.34.jpg

    If I want to be conservative, I should probably set my take profit-targets based on where the central tendency is located. If I wish to be more ambitious, it would be more appropriate to shoot for the opposite crest or trough as appropriate.

    I know that in the opinion of many professionals, traders are not supposed to be able to call tops and bottoms, but I’ve never been one to allow the experts to keep me from doing the impossible simply because they claim it to be so, especially if it’s something I’m already doing. Obviously I cannot be right 100% of the time, but that’s what stop losses and trade management are for.
    Van_der_Voort_4 likes this.
  7. expiated,
    Are you still making 1.8% every day compounded o_O -- What happened to your trading journal attempting to do so,
    ET 2018
  8. Sorry i might have phrased it wrongly, the middle panel when too noisy.That top panel with the "loop " is what prompted me to respond,cleverly thought out.I can see why you' aren't having too many losing trades.Your solution deals with uncertainty with defined metrics.

    When you have time look at things i wrote about,it may give you extra confidence to hold trade a lot longer on certain occasions.Because here you have method that you can rely on,but imho there is also a need to quantify movement of prices and it's cycles of consolidation and expansion or reverse to the mean.The problem is to get these things in some order the indicators above are not designed for,imho that is.
    I thought those 3 MA's and lining of one between other two were sign of imbalance in the marketplace,especially since it was on 5 min time frame,traders who are caught on wrong side of it rushing the get out.As I said there were no help to direction ,just that moves were coming.

    Very refreshing to read your post [​IMG]and most importantly you're earning money.

    Kind regards
    expiated likes this.
  9. expiated


    This is my last post to this thread:

    Actual trading has lead to the final configuration of the setup I designed over the weekend pictured below. The proprietary indicators are the red moving average and its accompanying moving average envelope, along with the Darvas box looking envelope, which I call “dynamic support and resistance,” and the lower panel “price anomaly channel.”

    ScreenHunter_7483 Apr. 04 05.39.jpg

    Put simply, I enter positions when the Heiken Ashi candlesticks switch colors as they cross the black moving average after having been rejected by dynamic support or resistance. The proprietary red moving average and the green moving average inform me as to whether I am trading with or against the longer-term trends.

    The proprietary envelope and price anomaly channel give me some idea as to where the exchange rate is located within or outside of its typical price range. This setup is giving me the kind of results you see pictured here…

    ScreenHunter_7482 Apr. 04 05.08.jpg
  10. eurusdzn


    I wouldn't use the absolute value for the bottom panel. Seperate into long an short panel. Trend becomes obvious seeing both . Use volatility based horizontal line in both panels. Toss the other two panels. iMO. Try other price averages( not ma's).
    Dont feel you are giving anything important away. this is vanilla.
    #10     Apr 4, 2018