Fan indicator v.1.0 - results
After reviewing the Fan indicator only superficially in the last issue, it is impossible to draw definitive conclusions about it - there is too little data. I suggest to find out if it is really unique.
Comparison of Fan with MACD and Moving Averages
Let's compare Fan v1.0 with with standard MetaTrader 4 indicatorsThe program is similar to it in its functionality, in particular with MACD indicators and moving averages.
The most simple and immediately noticeable signal for the opening of the Fan indicator is its crossing of the zero line. Let's see how well it works in comparison with its counterparts (see Fig. 1).
Fig. 1. Fan in comparison with EMA 200 and MACD (50, 100, 1).
As you can see in Figure 1, the Fan v1.0 zero axis crossing is similar to the popular MACD (50, 100, 1) and sometimes even "faster" (see Fig. 2). In comparison with the EMA 200, it reacts slower in most cases.
Fig. 2. You can clearly see the inputs by Fan and its brethren.
There is also a very interesting point, if the Fan has crossed its zero line after the MACD (50, 100, 1), the trend will obviously end soon. Maybe this observation will be useful for someone in trading.
Comparison of Fan with Bill Williams' Awesome Oscillator
Now we have to deal with the original use of Fan, as suggested by the author. These rules were described in the first article, let's recall them:
- With the color Lime, the fan is open and expands.
- With the color Green, the fan is open and tapered.
- When the color Yellow, the fan is intertwined and expands.
- When the color Orange, the fan is intertwined and tapered.
We turned to the standard algorithm to compare Fan with Bill Williams' Awesome Oscillator. In terms of appearance and principle of operation the data indicators are very similar, so let's look at their effectiveness with a concrete example (see Fig. 3).
Fig. 3. Blue indicates inputs by Williams' AO, red - by Fan.
It is obvious that Awesome Oscillator shows faster and more accurate entry signals than Fan, in some rare cases they are identical. Sometimes both indicators contradict each other, but, judging by the price movement, Awesome Oscillator turns out to be closer to the truth.
Also, the method of manual trading with the Fan indicator revealed several useful, in my opinion, points:
1. When trading according to the original rules by trend with a T/P to S/L ratio of 1 to 1, the results are negative.
2. When trading according to the original trend rules with a T/P to S/L ratio of 3 to 1, the results are just above zero.
3. When trading according to the author's algorithm against the trend (on the narrowing of the fan) with the ratio T/P and S/L, equal to 1 to 1, the results are positive. In this case, the trade was carried out against the direction of the EMA 200.
4. When trading from the zero axis, when Fan gives a signal together with the MACD (50,100,1), where the S/L is set at the local minimum/maximum, and the exit from the position was carried out on the principle of "It seems that the price has gone strongly away from the EMA" - the results are slightly above zero.
Conclusion
Having carefully weighed the pros and cons, I can draw my own final conclusion: Fan indicator v1.0 is "another derivative" of the standard indicators for MetaTrader 4 terminal. But it leaves behind various "overdrawers". The author of the indicator has done a worthy job, for which he should be thanked.