GKD-C VHF-Adaptive CCI [Loxx]

2023年4月1日

Giga Kaleidoscope GKD-C VHF-Adaptive CCI is a Confirmation module included in Loxx's "Giga Kaleidoscope Modularized Trading System".

█ Giga Kaleidoscope Modularized Trading System

What is Loxx's "Giga Kaleidoscope Modularized Trading System"?
The Giga Kaleidoscope Modularized Trading System is a trading system built on the philosophy of the NNFX (No Nonsense Forex) algorithmic trading.

What is the NNFX algorithmic trading strategy?
The NNFX (No-Nonsense Forex) trading system is a comprehensive approach to Forex trading that is designed to simplify the process and remove the confusion and complexity that often surrounds trading. The system was developed by a Forex trader who goes by the pseudonym "VP" and has gained a significant following in the Forex community.

The NNFX trading system is based on a set of rules and guidelines that help traders make objective and informed decisions. These rules cover all aspects of trading, including market analysis, trade entry, stop loss placement, and trade management.

Here are the main components of the NNFX trading system:

1. Trading Philosophy: The NNFX trading system is based on the idea that successful trading requires a comprehensive understanding of the market, objective analysis, and strict risk management. The system aims to remove subjective elements from trading and focuses on objective rules and guidelines.

2. Technical Analysis: The NNFX trading system relies heavily on technical analysis and uses a range of indicators to identify high-probability trading opportunities. The system uses a combination of trend-following and mean-reverting strategies to identify trades.

3. Market Structure: The NNFX trading system emphasizes the importance of understanding the market structure, including price action, support and resistance levels, and market cycles. The system uses a range of tools to identify the market structure, including trend lines, channels, and moving averages.

4. Trade Entry: The NNFX trading system has strict rules for trade entry. The system uses a combination of technical indicators to identify high-probability trades, and traders must meet specific criteria to enter a trade.

5. Stop Loss Placement: The NNFX trading system places a significant emphasis on risk management and requires traders to place a stop loss order on every trade. The system uses a combination of technical analysis and market structure to determine the appropriate stop loss level.

6. Trade Management: The NNFX trading system has specific rules for managing open trades. The system aims to minimize risk and maximize profit by using a combination of trailing stops, take profit levels, and position sizing.

Overall, the NNFX trading system is designed to be a straightforward and easy-to-follow approach to Forex trading that can be applied by traders of all skill levels.

Core components of an NNFX algorithmic trading strategy
The NNFX algorithm is built on the principles of trend, momentum, and volatility. There are six core components in the NNFX trading algorithm:

1. Volatility - price volatility; e.g., Average True Range, True Range Double, Close-to-Close, etc.
2. Baseline - a moving average to identify price trend
3. Confirmation 1 - a technical indicator used to identify trends
4. Confirmation 2 - a technical indicator used to identify trends
5. Continuation - a technical indicator used to identify trends
6. Volatility/Volume - a technical indicator used to identify volatility/volume breakouts/breakdown
7. Exit - a technical indicator used to determine when a trend is exhausted

What is Volatility in the NNFX trading system?
In the NNFX (No Nonsense Forex) trading system, ATR (Average True Range) is typically used to measure the volatility of an asset. It is used as a part of the system to help determine the appropriate stop loss and take profit levels for a trade. ATR is calculated by taking the average of the true range values over a specified period.

True range is calculated as the maximum of the following values:

-Current high minus the current low
-Absolute value of the current high minus the previous close
-Absolute value of the current low minus the previous close

ATR is a dynamic indicator that changes with changes in volatility. As volatility increases, the value of ATR increases, and as volatility decreases, the value of ATR decreases. By using ATR in NNFX system, traders can adjust their stop loss and take profit levels according to the volatility of the asset being traded. This helps to ensure that the trade is given enough room to move, while also minimizing potential losses.

Other types of volatility include True Range Double (TRD), Close-to-Close, and Garman-Klass

What is a Baseline indicator?
The baseline is essentially a moving average, and is used to determine the overall direction of the market.

The baseline in the NNFX system is used to filter out trades that are not in line with the long-term trend of the market. The baseline is plotted on the chart along with other indicators, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR).

Trades are only taken when the price is in the same direction as the baseline. For example, if the baseline is sloping upwards, only long trades are taken, and if the baseline is sloping downwards, only short trades are taken. This approach helps to ensure that trades are in line with the overall trend of the market, and reduces the risk of entering trades that are likely to fail.

By using a baseline in the NNFX system, traders can have a clear reference point for determining the overall trend of the market, and can make more informed trading decisions. The baseline helps to filter out noise and false signals, and ensures that trades are taken in the direction of the long-term trend.

What is a Confirmation indicator?
Confirmation indicators are technical indicators that are used to confirm the signals generated by primary indicators. Primary indicators are the core indicators used in the NNFX system, such as the Average True Range (ATR), the Moving Average (MA), and the Relative Strength Index (RSI).

The purpose of the confirmation indicators is to reduce false signals and improve the accuracy of the trading system. They are designed to confirm the signals generated by the primary indicators by providing additional information about the strength and direction of the trend.

Some examples of confirmation indicators that may be used in the NNFX system include the Bollinger Bands, the MACD (Moving Average Convergence Divergence), and the Stochastic Oscillator. These indicators can provide information about the volatility, momentum, and trend strength of the market, and can be used to confirm the signals generated by the primary indicators.

In the NNFX system, confirmation indicators are used in combination with primary indicators and other filters to create a trading system that is robust and reliable. By using multiple indicators to confirm trading signals, the system aims to reduce the risk of false signals and improve the overall profitability of the trades.

What is a Continuation indicator?
In the NNFX (No Nonsense Forex) trading system, a continuation indicator is a technical indicator that is used to confirm a current trend and predict that the trend is likely to continue in the same direction. A continuation indicator is typically used in conjunction with other indicators in the system, such as a baseline indicator, to provide a comprehensive trading strategy.

What is a Volatility/Volume indicator?
Volume indicators, such as the On Balance Volume (OBV), the Chaikin Money Flow (CMF), or the Volume Price Trend (VPT), are used to measure the amount of buying and selling activity in a market. They are based on the trading volume of the market, and can provide information about the strength of the trend. In the NNFX system, volume indicators are used to confirm trading signals generated by the Moving Average and the Relative Strength Index. Volatility indicators include Average Direction Index, Waddah Attar, and Volatility Ratio. In the NNFX trading system, volatility is a proxy for volume and vice versa.

By using volume indicators as confirmation tools, the NNFX trading system aims to reduce the risk of false signals and improve the overall profitability of trades. These indicators can provide additional information about the market that is not captured by the primary indicators, and can help traders to make more informed trading decisions. In addition, volume indicators can be used to identify potential changes in market trends and to confirm the strength of price movements.

What is an Exit indicator?
The exit indicator is used in conjunction with other indicators in the system, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR), to provide a comprehensive trading strategy.

The exit indicator in the NNFX system can be any technical indicator that is deemed effective at identifying optimal exit points. Examples of exit indicators that are commonly used include the Parabolic SAR, the Average Directional Index (ADX), and the Chandelier Exit.

The purpose of the exit indicator is to identify when a trend is likely to reverse or when the market conditions have changed, signaling the need to exit a trade. By using an exit indicator, traders can manage their risk and prevent significant losses.

In the NNFX system, the exit indicator is used in conjunction with a stop loss and a take profit order to maximize profits and minimize losses. The stop loss order is used to limit the amount of loss that can be incurred if the trade goes against the trader, while the take profit order is used to lock in profits when the trade is moving in the trader's favor.

Overall, the use of an exit indicator in the NNFX trading system is an important component of a comprehensive trading strategy. It allows traders to manage their risk effectively and improve the profitability of their trades by exiting at the right time.

How does Loxx's GKD (Giga Kaleidoscope Modularized Trading System) implement the NNFX algorithm outlined above?
Loxx's GKD v1.0 system has five types of modules (indicators/strategies). These modules are:

1. GKD-BT - Backtesting module (Volatility, Number 1 in the NNFX algorithm)
2. GKD-B - Baseline module (Baseline and Volatility/Volume, Numbers 1 and 2 in the NNFX algorithm)
3. GKD-C - Confirmation 1/2 and Continuation module (Confirmation 1/2 and Continuation, Numbers 3, 4, and 5 in the NNFX algorithm)
4. GKD-V - Volatility/Volume module (Confirmation 1/2, Number 6 in the NNFX algorithm)
5. GKD-E - Exit module (Exit, Number 7 in the NNFX algorithm)

(additional module types will added in future releases)

Each module interacts with every module by passing data between modules. Data is passed between each module as described below:

GKD-B => GKD-V => GKD-C(1) => GKD-C(2) => GKD-C(Continuation) => GKD-E => GKD-BT

That is, the Baseline indicator passes its data to Volatility/Volume. The Volatility/Volume indicator passes its values to the Confirmation 1 indicator. The Confirmation 1 indicator passes its values to the Confirmation 2 indicator. The Confirmation 2 indicator passes its values to the Continuation indicator. The Continuation indicator passes its values to the Exit indicator, and finally, the Exit indicator passes its values to the Backtest strategy.

This chaining of indicators requires that each module conform to Loxx's GKD protocol, therefore allowing for the testing of every possible combination of technical indicators that make up the six components of the NNFX algorithm.

What does the application of the GKD trading system look like?
Example trading system:

• Backtest: Strategy with 1-3 take profits, trailing stop loss, multiple types of PnL volatility, and 2 backtesting styles
  
• Baseline: Hull Moving Average
  
• Volatility/Volume: Hurst Exponent
  
• Confirmation 1: VHF-Adaptive CCI as shown on the chart above
  
• Confirmation 2: Williams Percent Range
  
• Continuation: Fisher Transform
  
• Exit: Rex Oscillator
  

Each GKD indicator is denoted with a module identifier of either: GKD-BT, GKD-B, GKD-C, GKD-V, or GKD-E. This allows traders to understand to which module each indicator belongs and where each indicator fits into the GKD protocol chain.

Giga Kaleidoscope Modularized Trading System Signals (based on the NNFX algorithm)
Standard Entry
1. GKD-C Confirmation 1 Signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees

Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees
6. GKD-C Confirmation 1 signal was less than 7 candles prior

Continuation Entry
1. Standard Entry, Baseline Entry, or Pullback; entry triggered previously
2. GKD-B Baseline hasn't crossed since entry signal trigger
3. GKD-C Confirmation Continuation Indicator signals
4. GKD-C Confirmation 1 agrees
5. GKD-B Baseline agrees
6. GKD-C Confirmation 2 agrees

1-Candle Rule Standard Entry
1. GKD-C Confirmation 1 signal
2. GKD-B Baseline agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
Next Candle:
1. Price retraced (Long: close < close[1] or Short: close > close[1])
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume agrees

1-Candle Rule Baseline Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 1 signal was less than 7 candles prior
Next Candle:
1. Price retraced (Long: close < close[1] or Short: close > close[1])
2. GKD-B Baseline agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees

PullBack Entry
1. GKD-B Baseline signal
2. GKD-C Confirmation 1 agrees
3. Price is beyond 1.0x Volatility of Baseline
Next Candle:
1. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-V Volatility/Volume Agrees

█ GKD-C VHF-Adaptive CCI

What is CCI?
CCI (Commodity Channel Index) is a popular technical analysis tool used by traders to identify potential trend reversals, overbought and oversold conditions, and trading opportunities in various financial markets such as stocks, commodities, currencies, and bonds.

The CCI indicator is a momentum oscillator that measures the difference between the current price of an asset and its historical average price over a given period of time. The CCI calculation involves subtracting the typical price of an asset from its simple moving average (SMA), and then dividing the result by a multiple of the mean absolute deviation (MAD) of the typical price.

The formula for CCI can be written as:

CCI = (Typical Price - SMA) / (0.015 x MAD)

Where:

Typical Price = (High + Low + Close) / 3
SMA = Simple Moving Average of Typical Price over a specified period (usually 20)
MAD = Mean Absolute Deviation of Typical Price over the same period
The CCI values range between -100 and +100. When the CCI value is above +100, it indicates that the asset is overbought, and there is a possibility of a trend reversal or price correction. Conversely, when the CCI value is below -100, it indicates that the asset is oversold, and there is a potential for a trend reversal or price increase.

Traders use CCI in various ways, such as identifying divergences between price and CCI, looking for bullish or bearish crossovers of the CCI line, and using the CCI in conjunction with other technical indicators to confirm trading signals.

Overall, CCI is a useful tool for traders and investors to analyze market trends, identify potential reversals, and make informed trading decisions. However, it is important to remember that no single indicator can predict the future market movements with certainty, and traders should always consider other factors such as fundamental analysis, news events, and risk management strategies when making trading decisions.

What is a Vertical Horizontal Filter?
The Vertical Horizontal Filter (VHF) is a technical indicator used in trading to identify whether a market is trending or in a sideways trading range. It was developed by Adam White, and is based on the concept that markets tend to exhibit more volatility when they are trending, and less volatility when they are in a sideways range.

The VHF is calculated by taking the ratio of the range of the high and low prices over a specified period to the total range of prices over the same period. The resulting ratio is then multiplied by 100 to create a percentage value.

If the VHF is above a certain threshold, typically 60, it is considered to be indicating a trending market. If it is below the threshold, it is indicating a sideways trading range.

Traders use the VHF to help identify market conditions and to adjust their trading strategies accordingly. In a trending market, traders may look for opportunities to enter or exit positions based on the direction of the trend, while in a sideways trading range, traders may look for opportunities to buy at the bottom of the range and sell at the top.

The VHF can also be used in conjunction with other technical indicators, such as moving averages or momentum indicators, to help confirm trading signals. For example, if the VHF is indicating a trending market and the moving average is also indicating a trend, this may provide a stronger signal to enter or exit a trade.

One potential limitation of the VHF is that it can be less effective in markets that are transitioning between trending and sideways trading ranges. During these periods, the VHF may not accurately reflect the current market conditions, and traders may need to use other indicators or methods to help identify the current trend.

In summary, the Vertical Horizontal Filter (VHF) is a technical indicator used in trading to identify whether a market is trending or in a sideways trading range. It is based on the concept that markets exhibit more volatility when they are trending, and less volatility when they are in a sideways range. Traders use the VHF to help identify market conditions and adjust their trading strategies accordingly.

What is VHF-Adaptive CCI?
This indicator adapts to a VHF filter output. This is done by calculating a period output from the VHF filter. This value is then used to calculate CCI. This adaptivity allows CCI to adjust to price movement more accurately thereby reducing noise and improving signal quality.

Requirements
Inputs
Confirmation 1 and Solo Confirmation: GKD-V Volatility / Volume indicator
Confirmation 2: GKD-C Confirmation indicator

Outputs
Confirmation 2 and Solo Confirmation Complex: GKD-E Exit indicator
Confirmation 1: GKD-C Confirmation indicator
Continuation: GKD-E Exit indicator
Solo Confirmation Simple: GKD-BT Backtest strategy

Additional features will be added in future releases.

2023年4月14日

發行說明

Upgraded to relax signal rules. This only applies to the Full GKD systems. All settings for signals are controlled by the Confirmation 2 indicator. So this means when you build a Full GKD system, the C2 indicator controls the relaxation of all signals including the Continuation indicator that you are required to add on top of the C2 indicator the full GKD system.

Added the following signal types:
Volatility/Volume Entry
1. GKD-V Volatility/Volume signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 2 agrees
5. GKD-B Baseline agrees
6. GKD-C Confirmation 1 signal was less than 7 candles prior

1-Candle Rule Volatility/Volume Entry
1. GKD-V Volatility/Volume signal
2. GKD-C Confirmation 1 agrees
3. Price is within a range of 0.2x Volatility and 1.0x Volatility of the Goldie Locks Mean
4. GKD-C Confirmation 1 signal was less than 7 candles prior
Next Candle:
1. Price retraced (Long: close < close or Short: close > close)
2. GKD-B Volatility/Volume agrees
3. GKD-C Confirmation 1 agrees
4. GKD-C Confirmation 2 agrees
5. GKD-B Baseline agrees

Added the following backtest options
-Super Complex allows for the creation of a GKD system without Confirmation 2 indicator. This backtest type requires the addition of a GKD-C Confirmation indicator
-Stacked allows for the creation of infinitely stackable GKD-C indicators. This is useful for combining two GKD-C indicators to test their synergy together before using these indicators in a full GKD system.

Updated Requirements
Inputs
Confirmation 1: GKD-V Volatility / Volume indicator
Confirmation 2: GKD-C Confirmation indicator
Continuation: GKD-C Confirmation indicator
Solo Confirmation Simple: GKD-B Baseline
Solo Confirmation Complex: GKD-V Volatility / Volume indicator
Solo Confirmation Super Complex: GKD-V Volatility / Volume indicator
Stacked 1: None
Stacked 2+: GKD-C, GKD-V, or GKD-B Stacked 1

Outputs
Confirmation 1: GKD-C Confirmation 2 indicator
Confirmation 2: GKD-C Continuation indicator
Continuation: GKD-E Exit indicator
Solo Confirmation Simple: GKD-BT Backtest
Solo Confirmation Complex: GKD-BT Backtest or GKD-E Exit indicator
Solo Confirmation Super Complex: GKD-C Continuation indicator
Stacked 1: GKD-C, GKD-V, or GKD-B Stacked 2+
Stacked 2+: GKD-C, GKD-V, or GKD-B Stacked 2+ or GKD-BT Backtest

Additional features will be added in future releases.

2023年4月16日

發行說明

Added volatility signals to continuation signal qualifiers.

Added Confirmation 1 + Confirmation 2 backtesting. This allows you to backtest C1 with C2 indicators together without setting up the full GKD system. In the GKD system, the C2 indicator acts as a minor trend filter while the C1 indicator delivers the actual signals and entries. This new backtest allows you to test the entries and signals from the C1 indicator while using the C2 indicator as the macrotrend filter.

2023年5月8日

發行說明

Updated for new GKD backtests.

2023年5月14日

發行說明

Additions and Subtractions:

-All signal logic has been transferred to the new GKD-BT Backtests. You can access these backtests using the links provided below:

GKD-BT Giga Confirmation Stack Backtest:

GKD-BT Giga Stacks Backtest:

GKD-BT Full Giga Kaleidoscope Backtest:

GKD-BT Solo Confirmation Super Complex Backtest:

GKD-BT Solo Confirmation Complex Backtest:

GKD-BT Solo Confirmation Simple Backtest:

-Removed all Confirmation Type options except for "Confirmation" and "Continuation." The "Continuation" type is only used in GKD-BT Solo Confirmation Super Complex Backtest and GKD-BT Full Giga Kaleidoscope Backtest when selecting a Confirmation indicator.

-Added new signal plots based on the selected Confirmation Type. For the "Confirmation" type, only initial Longs and Shorts will be displayed on the indicator. For the "Continuation" type, both initial and continuation signals will be displayed. In both cases, if multiple signal types are present (e.g., middle cross, signal cross), these signals can be controlled using the "Signal Type" option.

-Implemented code optimizations to enhance the rendering speed of signals.

-Streamlined the export process by generating only a single value for export to other indicators or backtests. This exported value is named "Input into NEW GKD-BT Backtest."

2023年6月8日

發行說明

Updated for GKD.

2023年7月14日

發行說明

Updated for GKD optimizer.

2023年7月15日

發行說明

Updated for GKD optimizer.