the sangha trading system

THE SANGHA TRADING SYSTEM

THE SANGHA TRADING SYSTEM

DISCLAIMER:Trading the market is inherently DANGEROUS! When you apply what you learn here, you only have yourself to blame! YOU take FULL responsibility for putting your Health, Soul and Wealth, at risk!All Rights Reserved; The Children of the Journey Sangha of the East Coast. Copyright, June 2011

The Sangha Trading System

THE FOUNDATION AND REASON

All Rights Reserved; The Children of the Journey Sangha of the East Coast. Copyright, June 2011

STS FOUNDATION AND REASON

How the Sangha Trading System made playing with the market safer and easier: No longer need to draw Fibonacci Retracements nor Extensions. No longer need to use Bollinger Band Macd Indicators. No longer need to do pre-market analysis; you know where the market is and where it will go. No longer need to trade at a specific time, this works all around the clock. No longer need to sit-out when the market is sideways, you profit taking the miniscule runs, if you want to. No longer need to miss long runs, trends greater than 2 points are all in your grasp. When you follow the process, no longer need to gift or give back your earnings to the market.



The Sangha Toolset is based upon a variation of the MACD find definition of MACD here: http://en.wikipedia.org/wiki/MACD.

The MACD is by definition a Lagging Indicator and is not predictive by nature. However, the variation of MACD the Sangha is based upon, uses a Bollinger Band derived by the following equations

// Calculate Macd and Bollinger Band... Macd = MACD( Close, FastLen, SlowLen ) ; // Take the Exponential Weighted average of BB_Macd over 10 price bar lengths Avg = XAverage(Macd,Length); // Take the Standard Deviation of BB_Macd over 10 price bar lengths SDev = StdDev( Macd, Length ) ; // Calc the Bollinger Band, where StDv is 1 Upper_Band = Avg + StDv * SDev ; Lower_Band = Avg - StDv * SDev ;

All Rights Reserved; The Children of the Journey Sangha of the East Coast. Copyright,2011-2012


We derive three vital pieces of additional information, which make this variation of the MACD predictive for our use! The Delta, the SanghaDown and The SanghaUp. Delta = AbsValue(Upper_Band - Lower_Band); The Delta is a positive number that range from zero to any maximum. This Delta is a measure of how far away the MACD Bollinger Bands are from each other. Why is this Delta a pivotal and amazingly important piece of information?



It is because of the following anecdotal information from experienced traders, who profitably use this variation of the MACD with Bollinger Bands When the Bollinger Bands are narrow is when we make the money! It had been proven by experience that when the MACD Bollinger Bands narrow, we either have a trend change or a continuation of the current trend. The Delta gives us a visual tool of when possible trend changes will occur.


STS FOUNDATION AND REASONHere is what a 1 * Macd and a 3 * Macd looks like:

All Rights Reserved; The Children of the Journey Sangha of the East Coast. Copyright, 2011-2012

STS FOUNDATION AND REASONThe Sangha Trading System uses Five Macd Tick Timeframes: Macd_1 is 0.5 * Macd_2 constants (Fast, Slow and Length) Macd_2 is 1 * Fast (12), Slow(26), Length(9) Macd_3 is 3 * Macd_2 Macd_4 is 7 * Macd_2 Macd_5 is 29 * Macd_2All Rights Reserved; The Children of the Journey Sangha of the East Coast. Copyright,2011-2012


Along with the DELTA, we also derive the SANGHAS. The Sanghas have two parts. A pair for each BB_MACD Tick Timeframes we use. SanghaUp = MACD Lower_Band; SanghaDown = Upper_Band MACD;When SanghaUp increases from zero, we have an uptrend. When SanghaDown increases from zero, we have a downtrend. Since we use Five BB_MACD Tick timeframes, we have a set of 5 sanghas, or 5 SanghaUps plus 5 SanghaDowns, 10 in all.


STS FOUNDATION AND REASONThis is how the Sanghas look:


STS FOUNDATION AND REASONA Closer look at the Sanghas:



Although the discovery of the DELTA was pivotal in leading us down this journey, the Delta is no longer used in STS. The Deltas function is wrapped up in another set of tools derived from the Sangha. Please welcome The Crossing



The Crossing is the combination of SanghaUp and SanghaDown for each of the MACD Tick Timeframes we use. Crossing = SanghaUp SanghaDown; Since we use Five MACD Tick timeframes, we have 5 crossings. Where: Crossing_1, also called PRIME, is the 72 Ticks, Crossing_2,3,4,5 are 144, 432, 1008 and 4176 respectively.


STS FOUNDATION AND REASONHere are Crossings 1 through 3:


STS FOUNDATION AND REASONA closer look at Crossings:



Next on the journey, was a need to see clearly when the Crossings peak or valley, since Crossing_3 does so well in marking the trends. Now we go to the RateCrossing; RateCrossing = Crossing_Previous Crossing; When the Crossing is flat, the RateCrossing crosses the zero. When the Crossing is moving at a constant pace, the RateCrossing is flat. Rate Crossing by its nature is predictive. However, we currently do not use the RateCrossing tool in our trading process.


STS FOUNDATION AND REASONHere is RateCrossing_3 and 4:


STS FOUNDATION AND REASONA closer look at RateCrossings:



Just for grins, we went further down the road and took the rate of the rate, called the Jerk. JerkCrossing = RateCrossing_Previous RateCrossing; The JerkCrossing gave us a one price bar advantage/predictability of when bar setup exists for entries/exits on the "edge. When JerkCrossing crosses the zero, you have an opportunity for a perfect entry/exit. JerkCrossing_2 works very well for timing entries and exits. This is especially useful when the market is slow.All Rights Reserved; The Children of the Journey Sangha of the East Coast. Copyright, 2011-2012

STS FOUNDATION AND REASONHere is JerkCrossing_2 with PRIME, Crossing_1:


STS FOUNDATION AND REASONA closer look at the JerkCrossing:


STS FOUNDATION AND REASONUse JerkCrossing and Prime to trade a slow market. The PRIME has a WINDOW with two vertical panes. The left-pane is the Drive side of PRIME. The right-pane is the Enter side of PRIME.


STS FOUNDATION AND REASONSUMMARY of The Sangha Trading System toolset:

1. The Multiple Tick Timeframes of BB_Macd is the foundation. 2. The discovery of the DELTA, made us realize the market must complete its cycles. 3. Sanghas make the cycles obvious. Sanghas tells us what the market is currently doing, up, down or sideways. A Sangha cycle must always complete. Choose whatever Sangha Tick Timeframes meets your trading style. The use of Sangha_2 and 3, allows to do short term or medium term trades. Using Sangha_4 and 5, allows for long and longest term trades. 4. Crossings make the handoff (cycle jump) from one Crossing to another very obvious. Crossings shows which Macd Tick Timeframe has control of the market action. 5. PRIME, which is Crossing_1, along with the JerkCrossing_2 are the tools for trading a slow moving market. The behavior of PRIME and Jerk along the zero, tells us when we have a ranging (sideways) or a slow sustained trending market. With the available tools available above; The Sangha Trading System, makes playing in the market profitable and less painful. (FIN)


the sangha trading system

Documents

variation of macd

length macd

macd lower

definition of macd

macd predictive

journey sangha

stddev macd

macd close