Techniques to Increase Win Rate with Enve Walk

Thank you for your continued support.

This is Yagi from the Tool Development Team at Cross Retailing Co., Ltd.

We sincerely appreciate your daily use of the Tool Development Team’s tools.

Today,

“Walk the Profit Margin Freely! Enve_Walk” is used to share how to increase your win rate!

Enve_Walk is a signal display tool that uses envelopes and RSI to ride the trend and aim for profits.

An envelope indicator typically draws bands above and below, and is used for mean-reversion trading by entering in the opposite direction when touching those bands.

However, this tool takes the opposite approach, riding along the bands of the envelope (band walking) to make decisions.

Because RSI is used as a filter for the band-walking decision with the envelope, this tool is more focused on riding the trend.

With Enve_Walk, we would like to introduce some pointers on how to target higher profits in this article.

Before introducing the techniques, I will describe the features and usage cautions of Enve_Walk!

The envelopes used by this tool are displayed on the chart as shown here.

What is shown is the USD/JPY 1-hour chart and the envelopes are two distances of 0.12% and 0.06% deviation.

(For this tool’s specification, the period is 5 and the moving average type is Exponential.)

There are lines drawn above and below to enclose the candlesticks.

The distance between the envelope and the candlesticks appears to be quite close.

Now, switch the time frame to 5 minutes to see how it looks.

Here is that chart.

Although the candlestick scale is the same, please observe the distance between the envelope and the candlesticks.

Compared to the 1-hour chart, the gap is wider, isn’t it?

The envelope is defined as the price deviating a fixed distance above and below the moving average.

The deviation distance varies with the chosen value, and when the chart has high volatility, the price can diverge more from the moving average. Therefore, if you set the values based on the 1-hour chart, the width becomes wider on shorter timeframes and narrower on longer timeframes.

To summarize, the values currently set in Enve_Walk (deviation 0.12%, 0.06%) are intended for 1-hour trading, so if you use them on other timeframes, you will need to adjust the values to suit the market!

It might be fine to use them as-is, but please try a variety of values!

Now, to the main technique,

this time we will add one more indicator to Enve_Walk to help decide entries.

Please look at the following market as an example.

Since this is a past chart, you can clearly see an uptrend now.

However, even in such markets, both buy and sell signals can appear.

So, I would like to add one more indicator to this market.

The indicator to add is “MA”.

This chart reflects the “MA.”

The reflected MA is a period of 200 with Exponential type.

In this case, when the candlesticks are above the MA, one could determine that the upward trend is strong and choose not to enter on a sell signal.

Furthermore, I would like you to also look at the slope of the MA!

Being a long-term MA with a period of 200, it is very gradual, but you can see that MA is generally rising.

But please look at this image.

The central part of the chart shows candlesticks moving above and below the MA, and the signals shown are not very functional.

The MA slope is nearly flat, so you could say it’s almost horizontal.

In this case, until the MA slope becomes clear, you might refrain from entering even if one of the signals appears.

Since the MA slope sensitivity varies from person to person, and while we tested with a 200-period MA, changing the period will inevitably change your judgments.

By incorporating the relation between the long-term MA and candlestick position, and the MA slope as one of the judgments, you can also perform entry selection!

In this way, rather than entering immediately when a signal appears, you can add other indicators to confirm the market condition and reduce unnecessary entries.

We focused on MA in this article, but please try trading by incorporating your familiar indicators and judgment methods.

If you have indicators or judgment methods that work well with this tool, we would be happy if you share them in the comments!

We would appreciate it if you could use this as a reference for future tool development and version upgrades, so thank you in advance!

Finally, thank you for reading until the end!

If you have not yet obtained “Enve Walk”here.

Tool Development Team, Yagi