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Sunday, February 3, 2013

New Setup using TIS_ATR_BarColor Indicator for NinjaTrader

Using the Multitrail Indicator for Ninjatrader logic to define a New Trade Setup ; we present the TIS_ATR_BarColor

Some time ago we discussed how to use the TIS_Multitrail Indicator and today We are going to describe how to use it to define a New Trade Setup.
As we know, the Multitrail uses ATR and HMA ( Hull Moving Average ) to have the best price following effect and proportional to the current Volatility. This give us the best tool for trailing stops....
...but how can we use it to define a Trade Setup ?

For that purpose we just need 2 events :
  • Multitrail level has been broken ( if we were trailing a runner we are flat now )
  • If going to reverse, we require a pivot to be formed first
Look at the following example :

Bars are Red and Multitrail is on Downside Mode until price breaks above it, taking out the trailing stop ( if we were short ) and generating a possible Entry on this New Setup :
  • To trade a continuation we only need to break the multitrail upside blue dots.
  • To trade a reversal we need to create a pivot as confirmation and then go long at its breakout.

While the market doesn't breaks the pivot or the multitrail, the setup is on neutral state and the Indicator paint the bars in Yellow.

On the following example we can see a Continuation Entry :

On this example, the trend is UP, mutlitrail line is broken and a pivot is generated ( gray line ) but the pivot is never broken, so there is no short trade.
Market continues going up and the multitrail line is broken to the upside, so we have a Long Continuation Entry.

This new TIS_ATR_BarColor Indicator not only follows the TIS_Multitrail lines and the described Setup ( with all the Bar Coloring, Pivot detecting, and entry breakout entries ) but also has an acceleration Input parameter that avoids to keep an horizontal movement ( not moving the trail stop ) when the market is starting to reverse. Leaving this input parameter to zero has same effect than the classic Mutilitrail.
On the following chart we can see the effect of using the "acceleration" setting :

As we see, we can use TIS_ATR_BarColor for Trailing purposes with same functionality as TIS_MultiTrail adding the acceleration enhancement, AND we can also add a New Trade Setup to our ToolBox.

Hope this info be useful for your trading.
Please post any question or send me an email


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