two timeframes in easylanguage(1)

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Access Two Timeframes In EasyLanguageA Powerful Technique To Improve Your Trading System

In this guide Im going to show you how to use two timeframes within a single chart. I

will use a higher timeframe chart (daily) to filter trades on a 15-minute chart. By

utilizing these two timeframes I will turn an ugly looking equity curve.

into something that looks like this


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SYSTEM TRADER SUCCESS 2VERSION 1.0

Introduction

I wrote this guide to help you better utilize your programming skill by creating morepowerful trading systems. This technique I'm going to show you is a technique that can

radically improve a trading. While I cant say it will improve every trading system you work

on, knowing this technique is a great tool for you to know. Ive personally seen the use of

utilizing multiple timeframes enhance the performance of many trading systems.

If you have any questions about system trading, youre invited to ask us

at:[email protected]. Weve dedicated our business to educating the retail

trader just like you. Well be happy to help in every way we can.

ACCESS TWO TIMEFRAMES IN EASYLANGUAGE PAGE 2


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The Multi Timeframe Advantage

A technique employed by many successful traders

A common technique used by traders is utilizing multiple timeframes. Often this is

done to filter trades. For example, a trader may be executing trades on a 30 minute chart, butwill utilize a daily chart to determine the overall bullishness or bearishness of the market.

The idea is to use the higher timeframes as a guide to which direction you should be trading

on the smaller timeframes. By doing this you are trading with the prevailing direction of

market on higher timeframes. Another common use of multiple timeframes is to locate a

specific trade setup on a daily chart yet use an intraday timeframe to help pinpoint an exact

entry point. Doing so often results in smaller stop loss values and potentially more profit.

Naturally for those of us who would like to build a trading system we would like totake advantage of this multi- timeframe technique as well. In this brief guide I'm going to use

TradeStations EasyLanauge to show you how to access information on a higher timeframe

and use that information as a filter. In fact, we will be using the higher timeframe to both

filter trades in the direction of the overall market direction and locate trade setups. Its a

powerful concept and one you will want to use in your personal trading.

During this report Im going to refer to two different charts. First is our long-term

chart which will be our highest timeframe. In this case, that will be a daily chart of the S&PE-mini. The second chart is the primary chart which is our 15-minute chart of the S&P E-

mini. Our long-term chart will be used to determine the overall bullishness or bearishness of

the market and to locate potential trading opportunities. The primary chart will be used to

pinpoint our trade entry.

To get started we will need a trading system. To keep things simple Im going to use a

trading concept that we explored before on the website, System Trader Success. The article is

called RSI and How To Profit From It. In that article we used a two-period RSI on a dailychart as a foundation for our entry signal. More specifically, we are going to utilize the

Accumulation Method of RSI. All this means is we are going to add the RSI value over the past

three days. A trade is then triggered when that 3-day sum is below 45. The formula will loo

like this:



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RSI Total = RSI From Today Closing Price + RSI From Yesterdays Closing Price + RSI From

Two Days Ago Closing Price

Our Simple Trading Model

We will open a new position if the following rules are true:

1. The closing price on our primary timeframe must be above the 200-day simple moving

average of the long-term timeframe

2. The accumulated RSI Value is below 45 on our long-term chart3. The accumulated RSI Value is below 45 on our primary chart

What are we doing here? Rule #1 ensures we are trading when price is trading above the 200

daily moving average. This means we are in an overall bullish market. Rules #2 says we want

to see a pull-back on the daily chart. Rule #3 says we want to see a pullback on our small

timeframe. Rules #2 and #3 are working together to find a pullback that is both appearing on

our higher timeframe and in our lower timeframe.



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How To Access A Higher Timeframe

Video Demonstration

Accessing different timeframes from within a single chart is simple to do, but difficult toexplain in words. Its much better to actually see the process. Thus, I created two short videos

to show you how to do it.


VIDEO #1

VIDEO #2Watch these video

Demonstrations
http://youtu.be/u3k6RWfVw-Y?list=UUMOjwmtHx85juLs4pOK65xAhttp://youtu.be/hN7Y_QNBUJ8?list=UUMOjwmtHx85juLs4pOK65xAhttp://youtu.be/hN7Y_QNBUJ8?list=UUMOjwmtHx85juLs4pOK65xAhttp://youtu.be/u3k6RWfVw-Y?list=UUMOjwmtHx85juLs4pOK65xA


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In the meantime, here is my brief written description.

Within TradeStation we will first create our primary chart by simply opening a new

chart and loading the S&P on a 15-minute interval. Next, we will need to add an

additional S&P symbol to our chart to represent our long-term chart. We can do this

right within our current chart. By inserting another symbol within the same chart wecan tell TradeStation to place the symbol on subgraph two. Once its on subgraph two

we can easily access the price data on that chart from our primary chart. Here is how.

They key to accessing our higher timeframe chart is to use the keyword data2". This

keyword tells TradeStation to use the trading symbol located on subgraph two. In other

words, our daily chart. Its important to properly declare all variables associated with

data from subgraph two. Lets declare two variables:. One will hold the RSI value from

our primary chart while the second will hold the RSI value from our long-term chart.

Here is the variable declaration:.

RSI_Primary(0),

RSI_LT(0,data2);

Notice we initialize both variables to the value of zero. However, notice the extra

parameter on the RSI_LTvariable. This is telling TradeStation that we plan to use this

variable to hold values from our subgraph (our long-term chart).

From this point we can use the following code to populate the variables with the correct

data:

RSI_Primary = RSI( Close, 2 );

RSI_LT = RSI( Close data2, 2 );

In the example above we are filling RSI_Primarywith data from our primary chart.

More specifically, we are passing in the closing price of the bar that just closed on our

primary chart. On the other hand, for our RSI_LTvariable we are are passing in the closing

price from data2.

Its that easy to access data on our higher timeframe chart.



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Building A Better Trading Model

Taking Trade In Direction Of Major Market

Below is the code used to compare the current closing price on the primary chart

with the 200-period moving average on the daily chart. We are setting a boolean flag totrue if we are in a bullish market. This is done to ensure we are only going to take

trades when the closing price is above the 200-period moving average.

BullishFlag = Close > ( Average( Close data2, 200 ) );

Filtering Trades On The Daily Chart

Here is the code used to filter trades on the daily chart. In this case, we wish to

use the same RSI accumulation method to locate a strong pullback on the daily chart.

By combining this filter with our bullish-market filter (above) we are following a basic

trading principle of the S&P E-mini futures market. That is, we are buying pullbacks

within a bullish market.

RSI_LT = RSI( Close data2, 2 ) + RSI( Close[1] data2, 2 ) + RSI( Close[2] data2, 2 );



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Final Code

The final code looks like this:

Variables:BullishFlag( False ),

RSI_LT(0, data2),

RSI_Primary(0);

RSI_Primary = RSI( Close, 2 ) + RSI( Close[1], 2 ) + RSI( Close[2], 2 );

RSI_LT = RSI( Close data2, 2 ) + RSI( Close[1] data2, 2 ) + RSI( Close[2] data2, 2 );

BullishFlag = Close > ( Average( Close data2, 200 ) );

If ( BullishFlag ) And ( RSI_Primary < 45 ) And ( RSI_LT < 45 ) And ( EntriesToday(Date)


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How To Build Profitable Trading Systems

Do you know the proper steps at building profitable trading systems? It's great that you

learned how to use two timeframes, but there is much more to successful system

development. If you liked this technique of using two timeframes, you'll love my ebook onbuilding profitable trading systems.

It's a complete step-by-step guide or blueprint on the

very steps I use to create profitable trading systems.

If you would like to learn the steps I use to avoid

curve fitting, proper testing and help ensure your

system will work well into the future check out this

link.


Learn More
http://systemtradersuccess.com/reports/how-to-avoid-over-optimizing-trading-systems/how-to-build-profitable-trading-systems/building-profitable-systems-g1-2/http://systemtradersuccess.com/reports/how-to-avoid-over-optimizing-trading-systems/how-to-build-profitable-trading-systems/building-profitable-systems-g1-2/http://systemtradersuccess.com/reports/how-to-avoid-over-optimizing-trading-systems/how-to-build-profitable-trading-systems/building-profitable-systems-g1-2/


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Resources

Video Demonstration #1Video Demonstration #2

TradeStation EasyLanguage CodeTradeStation WorkSpace

For more information on building profitable trading systems visit our website,

System Trader Success

You will find content rich articles on all aspects of successful system development.

http://www.systemtradersuccess.com/http://www.systemtradersuccess.com/downloads/free/RSI_Two_Timeframes.tswhttp://www.systemtradersuccess.com/downloads/free/RSI_TWO_TIMEFRAMES_EXAMPLE.ELDhttp://youtu.be/hN7Y_QNBUJ8?list=UUMOjwmtHx85juLs4pOK65xAhttp://youtu.be/u3k6RWfVw-Y?list=UUMOjwmtHx85juLs4pOK65xA

two timeframes in easylanguage(1)

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