First of all, I would like to note that the traded instrument used in
the strategy is USDZAR. Quotes of the USDZAR currency pair are
subject
to high volatility. Coupled with volatility, it is also characterized
by sharp and chaotic price fluctuations, which undoubtedly creates
high risks, including opening up huge potential for excellent profit
concentration.
The idea of the strategy is based on the method of identifying the
state of the market at a certain point in time relative to the
non-traditional calculation of SMA. Speaking of non-traditional SMA
calculation, it means applying a filter in the price (ASK)
calculation of closing for a period of one hour. As you know, each of
the calendar months includes from four to five trading weeks, full or
not. For each trading week, one or another, or several values are
determined for the time period for which it is necessary to calculate
the average closing price. The indicator calculates the value of the
average price, except for the closing prices of hourly candles, the
true range of which is more than 600 points (this limit can be
changed
depending on the expectations of the strategy or other preferences of
its kind) for the previous hour, as well as for the hour preceding
the
previous one Typically, the default data value is zero. At a time
when
the filtered values are greater than zero, and also equal to each
other, this method aims to identify the identity as a signal.
According to the strategy, this mechanism signals the consolidation
of
prices, creating a condition for opening a position. Further, BID and
ASK volume indicators, as well as closing and opening prices (ASK,
1hr) complete the chain with limit orders.