Konstantin Boykachev

CEO Proforexea LLC

Honest Coder

Professional Trader

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Konstantin Boykachev

CEO Proforexea LLC

Honest Coder

Professional Trader

Blog Post

Corners in trading and the need to study them

Entry. Angle in geometry and in trading

in the geometry of angle is a geometric figure formed by two rays (corner), emerging from one point (the vertex of the angle).

Angle in geometry

in trading concept corner slightly rewritten. Here is the ratio of the number of bars to the number of points. Under the bars it is understood time proposed standard (М1, М5, etc.) and non-standard timeframes; paras is a unit prices with an accuracy of 4 or 5 digits after the decimal point.

_ Angle.

in the MetaTrader 4 offered the following options of measuring and drawing angles.

1) simple angle (trendline by angle).

the trend Angle in MetaTrader 4.

2) corners of Gann fan.

Angle Gann fan.

3) Gann grid.

Gann grid.

the above examples used in the Terminal, rely on the well-known trading methods using the angles described Gunn.

there are modern trading development, which are based on an analysis of the angles. One of the benefits of innovative approaches to technical analysis based on angles — indicator a. Praslova, SinFractal. Here is a picture that describes the essence of trend analysis using angles.

SinFractal

on the basis of calculations the author SinFractal methods have been able to build a number of indicators of angles for a simultaneous trend analysis 28 currency pairs on multiple timeframes, allowing successful trading on the korzinnoj strategy.

a curious trader would question: is it not enough to use for the analysis of trading decisions on the corners, as suggested by Gunn? The answer for me was the fact that even the Gunn did not stop on reached and has continued to study the angles, perfecting my technique corner trend analysis.

in my opinion, to date, clear theory use angles for trading has not yet been developed, it can be said, a clean sheet. I would suggest that, in addition to the conventional horizontal angles (including applied in Sinfraktale), add new, for efficiency analysis: vertical and reverse.

Physics light Ray and the trend movement: optical analogy in technical analysis

at one time Andrews, offering their Pitchforks and median line, put forward the hypothesis that the financial markets have laws of physics.  At the same time, he drew the usual cycle and cyclical motion trend relates to the phases of his hesitation.

a sinusoid midline Andrews.

the idea of Andrews that physics with its laws can help in understanding what is happening with the trend, suggests that the trend is similar to the beam of light that falls on Wednesday sellers in buyers Wednesday. This phenomenon can be correlated with optical laws on angles of incidence and reflection. Here’s the only optics we rely on incident angles formed an angle and axis of OP AMPS, and all of these angles in trading were established trend line and the axis ОХ.

vertical and horizontal Angles.

Thus, flying parallel to the laws of optics, we get a new view angle on our charts, vertical (this is the angle between the trend and the axis ОУ).

and finally turning angle is well-known for any trader. Let’s look at it from an optical point of view.

the laws of optics allow for consideration of a trend similar to the beam of light. Accordingly, we will try to apply beam propagation physics to extrapolate the trend behavior. Light is reflected from the surface — trend changes its direction to the opposite and unfolds. If you use the dispersion laws (decomposition) of light, get some more interesting analogies.

  • if the dispersion in Optics is the decomposition of white light into a spectrum consisting of many monochromatic colors, the tehanalize dispersion is a decomposition of a trend on a number of trends occurring on smaller timeframes.
  • if the optics refractive index Wednesday depends depends on its frequency (color), technical analysis, this means that turning angle for each of the small part of the main trends will vary, depending on timeframe.

these properties, borrowed from optics allow you to examine trend as wave. Remember when the Elliot wave known direction in technical analysis.

Measurement of corners on price charts

to measure the angles on three points we use indicator corners Angles_3_pointswhich calculates the angle based on the ratio of points to minutes.

the peculiarity of this indicator is that the calculated angles are calculated using the inverse trigonometric functions: the tangent of an angle is first evaluated on the basis of the relationship of the side opposite to the 1245, the length of which are known. Then take the inverse tangent, that is, the size of the angle in degrees. This value, as well as the difference in pips between extremes and displayed on the price chart.

important note: the real value of the calculated angle can visually different from the angle seen on the chart.

Real calculated angle is specific the exact angle value. The original algorithm for calculating exact angles you can see in the source code of the indicator.
the Visual angle on the chart is converted by the Terminal, image angle for readability chart for a specific time scale and prices.

an example of turning angle measurement at the M1.

turning Angle on the M1.

M1 Timeframe presents a very detailed picture of the market, which is inevitably a great number of strong price noise. Filter out all the fuss on M1 is not a trivial task, but we now and don’t need to. It is enough to remember the value bottom corners spread on this timeframe: 48 degrees.

increase the timeframe. M5 turning angle changed, amounted to 104 degrees and looks already like so:

turning Angle on the M5.

M15 angle again increased and is now 112 degrees.

turning Angle on the M15.

For N1:

turning Angle on H1.

At H4:

turning Angle on H4.

turning Angle on D1.

examples of different spread angles confirm the assumption that the current trend is the sum of trends on various individual timeframes similar to Newton’s law about the decomposition of white light into its component wavelengths.

from the above you can do the following conclusions.

1. For each timeframe for each currency pair has individual angles of trend reversal.
2. The upper and lower corners spread also have their individual sizes.
4. Vertical angles (educated trend and the axis ОУ) can be used for analysis in the same way as normal horizontal (between the trend and the axis ОХ).
5. Because each timeframe contributes to the overall trend, there are two directions in the study of trend direction through corners:
) and investigate each trend for each timeframe;
b) study summary (mean) trend.

despite its apparent simplicity, it is not enough simply to use optical laws to interpret the trend. Trend, like any physical process, should be considered in detail.

angle has not yet exhausted its usefulness for technical analysis.

fully reflected.

try to interpret this figure from a textbook on optics in terms of classification of the trend. In Figure 1. 2 we see total reflection angle when reflected after the fall of the beam is directed along the axis ОХ.

Output: there are 4 kinds of trend in any timeframe.
1. The trend is upward
2. Trend down
3. The trend-flat top (when ended the trend is upward and downward trend reversal is not mature)
4. The trend-flat bottom (when ended the trend downwards and upwards trend reversal has not yet come)

the notion of a flat after look at it through the prism of optics has expanded somewhat. Now to the standard trade’s to identify flat we can add that the flat could be at the top of the growing trend (flat) or at the bottom of the diminishing trend (flat bottom). Also, speaking of the flat, you need to specify what timeframe it is fixed.

an example of a flat at D1

Flat at D1.

here we see flat on D1, limited channel width in 1374 points (for 4-digit prices). Until the release rates of these boundaries, sustainable trend in this timeframe is not worth waiting.

in terms of angular analysis, it seems that the trend is moving horizontally, dials, increases its angle of spread, and eventually This reversal occurs. But sometimes when the trend has priority impact trend higher timeframe. In this case, cancel the reversal and the trend continues in the “main” side dictated by the movement of senior timeframe.

based on the above, it is already possible to formulate the basic task angular analysis. This:

  • identify the most effective angles for analysis of a trend within the same timeframe;
  • the identification of useful for trade signals from the corners;
  • define the corners of the trend reversal within the same timeframe.

Which corners are more efficient for technical analysis?

as described above, for trend analysis we can use the following types of angles:

  • horizontal (between the trend and the axis ОХ);
  • vertical (between the trend and the axis ОУ);
  • skews (between two different directions trend).

consider particularities of horizontal and vertical angles when used for different timeframes.

the M1 the angles look like:

Effective angle for analysis on the M1.

the most effective angle for M1 looks horizontal, and the others are difficult to read and not showy.
timeframe, consider M5.

Effective angles for analysis on the M5.

M15.

Effective angles for analysis at the M15.

N1.

Effective for analysing corners on H1.

H4.

Angles to analyze on H4.

D1.

Effective for analysing corners on D1.

Conclusions about using different angles for different timeframes:

  • on the lower timeframes (М1, М5) visually convenient use of horizontal angles (they clearly readable on the chart);
  • at medium timeframe (M15, H1, H4) conveniently used skews, horizontal and vertical angles;
  • at senior timeframes (H4) vertical angles and corners spread increase significantly, and horizontal angles wanes to a minimum and poorly readable;
  • the optimal use of the indicator of angles on timeframes from M1 to H4, with different timeframes easier to apply the horizontal, the vertical angles;
  • turning corners often increase before the new direction of the trend, but they are more like corners, warning about the upcoming continuation of a trend than a spread;
  • find real skews that clearly warn about trend changes, has not yet succeeded;
  • find useful practical application of combination of data spread angles, horizontal and vertical at the same timeframe and “catch” the unambiguous relationship between them until, alas, didn’t work out;
  • need to explore new types of angles for the effective analysis of the trend.

New angles for technical analysis

to quickly get to the final result and needed new types of angles:

1) Take the median line Andrews, but build it not using the median, and with the help of bissektrisy angle;

2) Construct a turning, horizontal and vertical angles for midline Andrews.

get that if the horizontal angle Andrews (red line) is greater than the vertical angle of Andrews is a signal of declining trend.
If the vertical angle Andrews (blue) is greater than the horizontal angle Andrews is a signal of the growing trend.

New angles for those analyses.

they look pretty clear. Try to find in these corners of effective signals to determine the trend.

the outcome of the detection of signals from new angles on Andrews the following:

Signals sell (sell close).

the sell Signals and sell close.

buy Signals (buy close).

Buy and Buy Signals.

example M1 (5 digits after the decimal point).

Example M1 signals.

sell Signals — the upper red peak, after the upper Red Basin.
sell Signal close (Buy) is the upper blue hollow after the top of the Red peak.

M5.

Example signals on the M5.

M15.

Example signals on the M15.

Indicator of angles is good at history, but current data it redraws.
For smoothing effect can be used to repaint the reception of an elder, when we consider the multiple different timeframes in one currency pair (3 screen Elder).

However, for example, not timeframe from three to two different sizes (their role two angles with the proportional indicator number of bars) and we get the following. In the picture above, notice that the indicator on minor timeframe (thin lines) can be corrected on the testimony of a senior timeframe.

N1 on two indicators

Example with two timeframes on H1.

Consider what corners allow to receive signals from M1 timeframes to H1.

trading signals:

Preliminary signals:
1. “Attention, get ready buy open-top blue peak;
2. “Attention, prepare sell open-top red hollow;
3. “Attention, get ready buy close” — the upper red peak;
4. “Attention, prepare sell close” — the upper blue depression;

the Executive signals:
1. Buy open-top hollow blue;
2. “Sell open-top red peak;
3. “Buy close” — the upper red peak;
4. “Sell close” — the upper blue depression;
5. “Additive buy” — the second in a row, upper blue depression;
6. “Additive sell” — the second consecutive upper red peak.

If you continue using this indicator for higher timeframes, for example, H4, we get the following:

Example signals on H4.

as you can see, the H4 lost the clarity of the indicator’s corners. The H4 work indicator corners no longer has serious practical usefulness. Here you need to look for other tools and approaches to analysis.

Conclusion

Conducted a study on the use of angles for technical analysis. Showing applications of various angles.

there is still yet to explore especially the addition of angles from different timeframes. In this regard seriously advanced a. Praslov. You will meet him already well-developed and useful strategy for use in trade.

new Research angles continues and unexplored and unknown more than famous.  These indicators obtained after many attempts to find an approach to the measurement of angles.

article I used indicators corners, tailor-made (alas, I myself am not programming):

Angles_3_points Indicator to manually install three points for measuring angles on stories (take three points by clicking on the menu “Points” ) or the current angle (two points get across points, and third, by pressing the “Bid”). As in Terminal to install point to the desired location, you must press the button twice. It will fix your location, then you can set up the next point. You can rearrange and points on the chart. To do this, double-click on the desired point and move to a new location, and then double-click migrated point. The result of the measurement of angles is reflected in the price chart.
Deformation from changes timeframes if possible tried to eliminate (so the testimony of this indicator you can trust stronger than measuring the angle of MT’s built-in indicator “trendline by angle”).

ChartAngles Indicator -for automatic measurement of angles and reflect them in the bottom window below the graph. The indicator draws two types of angles: conventional (horizontal, vertical, reversal) and Andrews ‘ angles (horizontal, vertical and reverse). Needed to display the corners leave unwanted preferences turn off. The color of the lines of those or other angles can be changed in the preferences. Uses in his testimony led indicator Zigzag. This is based on the principle of overcoming deformation indicator screen from above the indicator Angles_3_points. Specifies the number of bars in the settings, and builds the corners.

DegreeAngles_Zero Indicator — to automatically measure and build angles in the bottom window below the graph at the same time for two different number of bars on the corners. Its distinctive feature is that it is built not on the indicator zigzag, and using the regression line. This makes it more accurate. Setting in the settings the number of bars to two indicators, the color and thickness of the lines, as well as what corners we’re interested in, get the angles.

again, practically useful signals from these indicators found for Andrews, obtained using bissektrisy. Vertical and horizontal angles, angle bisector as well as their mutual crossing helps determine trend. Potentially useful for practical trade looks and reverse angle on the angle bisector Andrews.

is currently being developed at EA the basis of these indicators.

for the correct operation of the Angles_3_points indicator you must install new font.

4 Comments
  • Nikolaev 7:42 pm April 15, 2019 Reply

    Thank you, for the article is very interesting.

  • YangBeng 11:45 am April 16, 2019 Reply

    “… In trading, the concept of angle is slightly modified. Here, this is the ratio of the number of bars to the number of points. At the same time, bars mean the time offered by standard (M1, M5, etc.) and non-standard timeframes; points are the unit of price measurement with an accuracy of 4 or 5 decimal places … ”

    Not very clear.

    In the calculation, values ​​of different dimensions are used and the proportionality of values ​​is questionable.

    In this regard, the question – And did not try to use your “developments” on equal bars?

    If the equal bar is solved immediately, the values ​​(along the X and Y axes) are in the same dimension and their proportionality is clear.

  • AlgoTrader 8:11 am April 19, 2019 Reply

    To get the angle you need two lines. The horizon is not always used as the second line.

  • Alex 7:04 am May 15, 2019 Reply

    The angles in the analysis, of course, an important component, as they allow to estimate the magnitude of the speed of the process.

    However, in the framework of traditional methods of analyzing financial markets, including the Gann method,

    an inevitable error, since:

    the reference point and reference point for measuring the angle values are determined subjectively,

    There is no certainty when fixing these points.

    Therefore, in traditional technical analysis, the angle value is not a valid parameter.

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