The Dynamic Zone Step Ehlers indicator is a powerful tool for trend following. Its primary objective is to filter out market noise—the erratic ups and downs commonly seen in financial instruments. In this article, we’ll explore how to leverage this indicator effectively and address the challenge of late entries.
Understanding the Dynamic
Zone Step Ehlers Indicator
1. Noise Elimination: One of
the key strengths of the Dynamic Zone Step Ehlers indicator lies in
its ability to track price movements accurately while minimizing
noise. By doing so, it helps traders focus on meaningful trends.
2. The Late Entry Issue: However, a drawback is that it sometimes
generates signals after the trend has already started. Traders may
miss out on early entry opportunities.
Resolving the Late
Entry Problem
To overcome the late entry issue, we propose a
solution: entering on retracements based on the average price of
recent bars. Here's how it works:
1. Channel Construction:
Start by drawing a channel based on a simple 6-period High/Low moving
average. This channel represents the average price range.
2. Signal Confirmation: When an arrow signal (buy or sell) appears on
the chart, wait for the price to retrace toward the average area
within the channel.
3. Optimal Entry: Enter the market when
the price touches or retraces into the channel average zone. By doing
so, you gain a mathematical advantage by filtering out noise.
4. Setup Strategy
• Time Frame: Consider using
the Dynamic Zone Step Ehlers indicator on time frames of 1 minute or
longer.
• Currency Pairs: This indicator can be applied
to any currency pair.
Metatrader Indicators
1.
Dynamic Zone Step Ehlers: Use the default settings for this
indicator.
2. Simple Moving Average (SMA):
◦
Period: 6
◦ High: Apply the SMA to the high prices.
◦ Low: Apply the SMA to the low prices.
Trading
Rules
Buy
◦ When a buy arrow appears,
wait for the price to retrace into the moving averages channel. You
can also consider placing a pending order.
Sell:
◦ After a sell arrow appears, wait for the price to retrace
into the channel of moving averages.
Profit Target on SR
levels or Pivot Points Levels.
Stop loss on the previous
swing high/low then it is used with trailing stop using the dotted
lines of the indicator.
It is advisable to avoid entering
after long bars.
Download
https://drive.google.com/drive/folders/1CX1PkhUY9XSf63nfjBrGXgSHA3gwz_jc?usp=sharing
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