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.