SpaghettiFX Logo
Price: $79.99

SpaghettiFX

November 4, 2013 03:25 AM
(4 / 5)

How many of you use moving averages (MAs)  in their trading systems?

How many times have you heard that MAs are not good as they “lag” too much?

Starting from today we’ll show you that thanks to an innovative analysis of MAs you can be profitable even using just them.

This is a template of the new indicators SpaghettiFX which is based on the relationships among multiple moving averages:

The indicators were obviously inspired by GMMA (Guppy Multiple Moving Average), however they introduce some new calculations for generating pretty interesting trading signals.

We took the very good idea of rappresenting the two “sides” of the market: the long term traders and short term traders. By using two sets on MAs with different periods we can graphically see how they are “moving”. But this is not easy to trade as they are purely graphical rappresentation of the two sides. It’s not easy to understand when to enter, exit, trade or not trade.

So we decided to find a way to “read” them in an undisputable way. And we created two new indicators for that.

It’s very important to stress that these indicators have no repainting and are based on a single currency and single timeframe, therefore they can be easily backtested

But let’s go more in depth.

The two indicators are the SpaghettiFX and SpaghettiFX signal.

The SpaghettiFX is an indicator able to do a “synthesis” of the two sets of moving averages: the fast set and the slow set.

Here’s a picture of how it looks like:

In the SpaghettiFX indicator we have 4 elements:

  • Red Line (Fast MAs) - is the spread of the red MAs. If the red line is below the 0 line, then the red MAs are pointing down (short). Vice versa if they are above the 0 line that they are long.
  • Blue Line (Slow MAs) - same as above but for the blue MAs. If the blue line is below the 0 line, then the blue MAs are pointing down (short). Vice versa if they are above the 0 line that they are long.
  • Light Gray Histo (Spread) - shows you the gap between the two sets of MAs. The wider the stronger and more stable the trend is. This can also be used as a trend indicator. Above 0 we are bullish, below 0 we are bearish.
  • Dark Gray Histo (Amplitude) - shows you the total spread of the two sets. From the fastest MAs to the slowest one.

With the SpaghettiFX indicator you’ll have the chance to understand what the two main actors of the market (long and short term traders) are doing and how they relate to each other. Do they agree or not?

But to make things even easier, we developed a real trading system around this indicator and developed an additional indicator that is incredibly easy to read and gives very good entry/exit signals that can’t be misunderstood.

By “reading” the SpaghettiFX Indicator, Signals is able to divide the market into 4 conditions:

  1. Strong Blue – Strong Bullish
  2. Blue – bullish
  3. Red – bearish
  4. Strong Red – Strong Bearish

And based on it there are a few ways that you can trade with it.

On EURUSD for example, on H4, a bold red histogram in the bottom window is often the precursor of a bearish move of +200 pips. Likewise a bold blue histogram often anticipates a +200 pips bullish move.

We studied the signals generated on EURUSD from the beginning of 2013, and the results are pretty good:

The entry prices shown in this table are the Open price of the candle that follows a bold red or bold blue histogram. Trades are closed at a loss when 3 histograms of the opposite colors are generated by SpaghettiFX.

As you can see also a simple trading system with a fixed take profit around 150 pips is able to cash at least +1200 pips in the first 10 months of 2013, with a profit factor > 2.

And this is only one way to use it.

Since we started using it, we’ve seen that those indicators can be used in many ways. One way is by “swinging” long and short by being always in the market and changing side as a new “bold” bar in the opposite direction comes out. This works very well on lower timeframes as well.

223 pips of profit on EURUSD M5!

What you get after purchase

 

  • The SpaghettiFX Indicator
  • The SpaghettiFX SIgnal Indicator
  • A chart template
  • Updated online manual
  • Email support

Clicky