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Hello, I am looking into the TOS's FW_MOBO_Advanced. I know its basically the Bollinger 10, -.8, +.8 but in the indicator there is a "Pattern buy" and "pattern sell."
I was wondering if someone here might know the exact logic that defines those "pattern break" sells and buy?
This is TOS explanation but I can't seem to duplicate it:
---Using settings on adjusted standard deviation bands (Bollinger Bands®), the study has momentum breakouts above the bands for positive moves and momentum breakdowns for price breaks below the bands indicated by Pattern Break signals. Moreover, using Fisher transform technique, this advanced version of the study displays Fisher Break signals. This works for all time periods and tick charts.---
Thanks!
Can you help answer these questions from other members on NexusFi?
From what I know the general MOBO trade is a close above/below the bb you mentioned. The advanced version also incorporates the signals from the FW Fisher Transform Oscillator
It's been more than 10 years since I wrote the MOBO study for David Elliot's FW Trader group on thinkorswim, so my memory may be a bit fuzzy. I recall I got better results by not using it for breakouts (for entry), but as an indicator of whether or not to stay in a existing trade, primarily to prevent early exits when the trend hasn't really changed.
1. The closes between the bands are noise. Don't do anything.
2. A Breakout only occurs when the previous trend is down, and the bar closes above the band. If price goes above, but closes below there is no breakout. The arrows in the study will indicate when the breakout occurs. Please note any breakout arrow while the bar is open is not the signal. This false indicator happens because the "close" price of the bar can fluctuate (it's actually the last trade price) while the bar is open. It's not a bonafide signal until the bar is actually closed. Having said that, if it's 5 minutes till closing and you're trading a daily chart, you can estimate where the close will be and make your decision based on that.
3. A Breakdown is the opposite.
5. For best results don't trade the break until the next bar opens outside the band, in the same direction.
I have a system that is similar to this, so it was easy for me to figure out how to use it. For a year or two I have been telling people about it. The best way to understand is to start with the fw mobo basic. Logic! An established trend is high probability. So entering a trade with a signal in the same direction will have a higher success rate. ignore signals in a squeeze. You could enter with trend; then exit with a reversal signal, then re-enter in the previous trend direction with a signal for it. Remember that the probability that the counter trend is over goes up at 50% and 61.8 %. THEN the probability of the main trend decreases with every hit of resistance areas like previous day highs, lows, overnight swing highs and lows and squeeze breakout areas. Upper time frame bbands are also resistance areas. Round, big numbers, trend lines, average trend ranges like say 25-30 /es points.
I am new to this site and I am in search of my personal Holy Grail.
Many years ago I followed David Elliot and First Wave (FW) on TOS. I was very saddened by David passing. Recently I re-discovered the FW indicators on TOS and have been using them for mini ES trading.
I am successfully using MOBO, SOAP, FisherTransformer, and MMG. I am searching for David's training DVDs so I can gain more information and mastery of the FW system.
Does anyone have access to the FW training DVDs that could be copied and purchased? I noticed the Chartsnchat web site has a good amount of FW information listed, but it seems the linked files are no longer operable.
Any help in my Holy Grail quest for David's FW training DVDs would be appreciated.
I have a half-dozen of David's DVD videos circa 2008 that I purchased at a class he taught. I didn't find the videos particularly useful since they were on a different platform (non-ToS), which is why I wrote a bunch of studies that he used in his chat room at ToS. ToS may have recordings of those chat sessions available. They were a lot of fun and heavily attended.
Source code for the studies I wrote is available for individual use on request.