Re: Buy Sell Pressure indicator for MT4

31
mr. tools
here my idea for this indicator BUY/SELL
but i feel the histogram may show the pressure if the price has HIGH/LOW. some places its good and some places its shows equal...
see my snap how i defined.



Made the histo version, wasn't able to add the pre-smoothing it would invert the values, so not sure if i messed up somewhere with it or not, but if I figure out what was wrong will add it.
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Re: Buy Sell Pressure indicator for MT4

32
andrei-1 wrote: Sat Feb 11, 2023 9:28 am I saw an opportunity to filter tdfi. You can allow the cloud to extinguish the ends (green, red). But you can not allow to extinguish the beginning.

viewtopic.php?p=1295500577#p1295500577

Interesting. I've also been in deep thought about what indicator(s) would need to be paired with BSP in order to create a truly effective trading system.

Someone will eventually come up with something!
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andrei-1


Re: Buy Sell Pressure indicator for MT4

37
I want to share something important that I've observed when using the BSP indicator on Renko charts. This pertains to V1 and V2.01 because unlike V2, both versions do not attempt to eliminate wicks out of consideration in the calculations.

I made this observation a while back when first testing out the BSP indicator:

TransparentTrader wrote: Tue Dec 27, 2022 2:59 am So far, I noticed something interesting on the S&P500 where I use 1-point Renko boxes and a setting of 100 for both moving averages and using EMA for both averages. The WORST loss I can encounter on any trade is a total of 2 boxes before the indicator tells me to get out and take a trade in the reverse direction. Usually the loss is either 1 brick or break even. I need to do more testing but with this one indicator I've virtually eliminated the need for a stop loss when scalping the US indices at NY market open.

And right now the EMA, double EMA, and triple EMA seem to consistently give the best results for profitable entries and exits. Lots and lots of experimentation ahead of me, yet it will be easy to do thanks to the efforts of mrtools and kvak.

Based on the math above and my Renko box settings for the S&P 500, the WORST possible trade loss of two boxes is equivalent to 2 points (ex. 4902 -> 4000).

But this also applies to the US30 if I use 5-point renko boxes (ex. 30,000 -> 30,005). Since two boxes is the worst loss I can experience in the event a trade immediately goes against me the second I open a position, I will not lose any more than 10 points on a single losing trade.

I imagine the same pattern will apply for any Renko chart I create as long as I use the BSP indicator with the settings described in the quote.

To recap, my best settings so far are: EMA used for both moving averages, a length of 100 for both averages, and no other changes.

What I would like to eventually reverse engineer is the following:

  • How many boxes of profit I need before price action goes in the opposite direction of my trade and BSP signals me to exit the trade with a loss of -1 boxes
  • How many boxes of profit I need before price action goes in the opposite direction of my trade and BSP signals me to exit the trade with 0 boxes (breakeven)
  • How many boxes of profit I need before price action goes in the opposite direction of my trade and BSP signals me to exit the trade with a profit of +1 boxes
  • How many boxes of profit I need before price action goes in the opposite direction of my trade and BSP signals me to exit the trade with a profit of +2 boxes
  • etc.

Why does this matter?

Take a look at what the MADX indicator I requested a while back looks like on a NAS100 Renko chart where each box is worth 5 points (12000 -> 12005):

TransparentTrader wrote: Mon Nov 28, 2022 5:18 am
Image

Notice how the losses are very small and yet when there is a trend, the indicator keeps you in the trend and prevents you from exiting prematurely. Even if you do exit early, you still do so with a decent profit.

I need to get some pictures of what this looks like with the BSP indicator, but I can tell you the BSP indicator will keep you in the trend for even longer and the losses are even more minimal. With any of the three major US indices (S&P500, NAS100, US30) there is enough volatility such that true price consolidation rarely happens. Even in ranging conditions you can still scalp mindlessly according to the signals and walk away with slight profits, breakeven, or slight losses.

I still need to optimize the BSP indicator and ideally add in 1-2 more indicators to truly create a system where the best entries and exits always exist.

But rest assured I am getting closer and closer to finding a true market edge.

For instance, combined with smart money management, I believe it will be perfectly reasonable to set a minimum profit target of 100 points on the US30 with 5-point Renko boxes (i.e. 20 boxes of profit) and achieve a daily account growth of 5%. It could even be as high as 10% and possibly more on days where the US30 continually goes up/down by several hundreds of points.

I could set my stop loss to 20 boxes and risk 1% of my account, yet if I exit on the worst possible loss of 2 renko boxes (10 points total) I will not lose any more than 0.5% using nothing more than the BSP indicator with my described settings.


I'll stop there for now. Lots for me to experiment with and test in a live setting. Just thought this would be helpful information for anybody wondering how I intend to use the BSP indicator for trading!
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Re: Buy Sell Pressure indicator for MT4

38
@Jimmy @mrtools @kvak I have an important question to ask about the math being used to create the BSP indicator in light of other versions of this indicator I found published on TradingView.

On the No Nonsense Forex thread, somebody requested Centaur to convert the BSP indicator into MT5 format.

Except the indicator Centaur identified is a separate indicator that happens to have the same name, created by user Tradernawab.

Here is how Tradernawab describes his version of the BSP indicator:

Every stock /indices /chart is unique in nature. there will always be some kind of buyers and sellers present in these equities/stocks. due to their inherent buying and selling nature, these stocks also develop a pattern. such patterns are not always visible directly on the chart but we can calculate buying and selling pressure for these stocks individually . if we plot a graph on chart , we can easily see when stock is getting and when it is showing strength.

The logic for calculating buying and selling pressure is given below-

buying pressure= 14 days ema of {close- low(1)}
selling pressure= 14 days ema of {high(1)- close}

low (1) indicates 1 day ago candle's low price
high(1) indicates 1 day ago candle's high price
close= recent candle's close price

how to read chart :-

whenever buying pressure line (green color) crosses the selling pressure line (red color)stock will show strength and will go up. if the red line starts to cross the green line then we may see prices go down. so one can book profit here.
there is a unique zero line which is blue in color. it will act as a supreme buy and sell zone. if the green line touches or somehow goes below the zero line(blue line), stock will see strong buying pressure . if the red line (selling pressure line) goes below the zero line, the stock will witness strong selling pressure.

And here is the code for Tradernawab's BSP indicator:

Code: Select all

// This source code is subject to the terms of the Mozilla Public License 2.0 at https://mozilla.org/MPL/2.0/
//trader nawab
//@version=5
indicator("buy sell pressure","buy sell pressure")
number1=(close-low[1])
number2=(high[1]-close)

len1=input.int(defval=15,title="length1",minval=1,maxval=200,step=1)
len2=input.int(defval=15,title="length2",minval=1,maxval=200,step=1)
len3=input.int(defval=50,title="length3",minval=1,maxval=200,step=1)

ema1=ta.ema(number1,len1)
ema2=ta.ema(number2,len2)

p1=plot(ema1,color=color.green)
p2=plot(ema2,color=#FF5733)
p3=plot(0,linewidth=1,color=color.blue)

For context: Fract's BSP was published on 28 September 2022 while Tradernawab's BSP was published on 11 October 2022. However, I will give both coders the benefit of the doubt and assume they independently came up with their formulas on their own.

When I notified Centaur of the original BSP indicator our thread is based on and asked if the math is different between the two indicators, this is what he had to say:

Centaur wrote: Mon Feb 13, 2023 6:26 am The math is slightly different on all three:

version by Tradernawab:
Buy Pressure = EMA(close[0] - low[1], n)
Sell Pressure = EMA(high[1] - close[0], n)

version by fract:
Buy Pressure = EMA(close[0] - min(low[0], close[1]), n)
Sell Pressure = EMA(max(high[0], close[1]) - close[0], n)

Jimmy's Thread:
Buy Pressure = EMA(close[0] - min(low[0], close[1]) - (min(open[0], close[0]) - low[0]), n)
Sell Pressure = EMA(max(high[0], close[1]) - close[0] - (high[0] - max(open[0], close[0])), n)

where n is the lookback period, [0] represent current value, and [1] previous value

Centaur said he "agrees with the calcs by Tradernawab" but I asked him for further clarification. I do not know if he means to say the Tradernawab version provides better trading results in comparison to Fract's BSP and/or the BSP coded into MT4 by mrtools and kvak.

This leads me to asking a few questions:

  • How can our MT4 version provide the same results as Fract's BSP and yet appear to have different mathematical formulas for calculating the BSP values?
  • Which version of our MT4 BSP is Centaur referring to? V1, V2, or the most recent V2.01?
  • For NET BSP, which calculations are we using from our MT4 BSP? V1, V2, or V2.01?
  • Is it worth our while to code a separate BSP indicator that uses Tradernawab's calculations instead of Fract's calculations?

It will take us a while and more searching to get the answers to all these questions, so please do not stress yourself by trying to solve them all urgently. I was just thinking about this last night and figured I would put my thoughts onto paper for everyone to see.

Looking forward to a productive conversation that benefits us all!


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