{"product_id":"stcov312exof","title":"Stocks \u0026 Commodities V. 31:10 (20-25): An Expert Of A System by Sylvain Vervoort","description":"An Expert Of A System by Sylvain Vervoort\u003cbr\u003e\u003cbr\u003eColorized Candles\u003cbr\u003e\u003cbr\u003eIn this sixth part of a seven-part series, we look at an\nexpert trading system that color-codes candlesticks to\nsimplify entry \u0026amp; exit decisions.\u003cbr\u003e\u003cbr\u003eWhen in doubt, follow the expert except that this\nexpert is a trading system that will make your buy\n\u0026amp; sell decisions easier. Keep in mind there is no\nperfect expert that will make profitable trades all\nthe time. Your best chance for a profit at the end of\nthe day is to stay in a profitable trade for as long as possible\nand avoid entering losing trades. Together with good risk \u0026amp;\nmoney management, the odds will be in your favor.\u003cbr\u003e\u003cbr\u003eAn expert system that color-codes your candlestick chart\nwill give you the best possible indication of when to buy and\nwhen to sell. In the standard candle chart in Figure 1, a green\ncandle body indicates that the day closed with a price higher\u003cbr\u003e\u003cbr\u003ethan the opening price; a red candle body means the closing\nprice was below the opening price. On this chart, its not so\neasy to see where to take action.\u003cbr\u003e\u003cbr\u003eNow look at Figure 2. Its the same chart but color-coded by\nan expert color-coding system. With this chart, if you buy when\nthe candle color changes to green and sell or go short when it\nchanges to black, its fairly clear where you will buy and sell.\u003cbr\u003e\u003cbr\u003eBesides having clearer indications for long or short positions,\nyou also have the advantage of the candlestick chart format\nitself. In Figure 2, a white or unfilled candle body means the\nday closed with a closing price above the opening price. A\nfilled body, either green or black, means the day closed below\nthe opening price of the day. Figure 2 shows a nice, profitable\nexample, but it will not always be that way!\u003cbr\u003e\u003cbr\u003eCreating the expert\u003cbr\u003e\u003cbr\u003eFirst, you need a rule that tells you when to go long and when\nto go short. This could be an extremely complicated setup with several rules, or it could be a simple approach\nsuch as a trend-following system using\nmoving averages and a crossover between two\naverages.\u003cbr\u003e\u003cbr\u003eA crossover rule will work well as long as\nprices are trending. Unfortunately, as we know\nall too well, this is often not the case. The moving\naverages will cross and result in losses. Hence, it\nbecomes necessary to apply techniques to avoid\nthese unprofitable crosses as much as possible.\nAnd even then, with every signal you will have\nto decide whether to take the trade based on\nother technical analysis techniques.\u003cbr\u003e\u003cbr\u003eTo limit the volatility of the price change, I will\nnot use closing prices to create the expert indicator\n(SVEHaTypCross). I will use a smoothed\nversion of closing prices based on heikin-ashi\ncalculations on one side, and on the other side I\nwill use the typical closing price that is calculated\nby adding the high, low, and closing price and\ndividing the sum by three.\u003cbr\u003e\u003cbr\u003eThe first step is to create two new datasets,\none with the recalculated heikin-ashi closing\nprice (haC) and the other with the typical closing\nprice (typical):","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133985485169,"sku":"V31C10_630VERV","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_d72c839e-dbb3-4839-a443-95150a430979.jpg?v=1739660525","url":"https:\/\/shop.traders.com\/products\/stcov312exof","provider":"Stocks \u0026 Commodities","version":"1.0","type":"link"}