FOREX INCOME BOSS...1. Modifying The FIB Indicators The Forex Income Boss system is an awesome system as it stands, it's been tested and it's making a lot of people a lot of money

FOREX INCOME BOSS

Presents

Modifying the Indicators

By Russ Horn

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1. Modifying The FIB Indicators

The Forex Income Boss system is an awesome system as it stands, it's been tested and it's making a lot of people a lot of money. Now, I am under NO ILLUSION that no one system will work exactly the same for everyone. I would love for the FIB system to work for everyone, for every trader to love it right out of the box, and a lot do, but we are going to look at a few ways to personalize it a little bit. I have made sure that the indicators period settings have remained editable or adjustable. We are going to make some adjustments to some of the FIB indicators and you will have a sense of POWER! I must make this clear before we get into the actual adjusting of the indicators: IF YOU ARE EASLY OVERWHELMED OR DON'T UNDERSTAND THE SYSTEM AS IT STANDS, YOU MAY WANT TO SKIP THIS LESSON UNTIL YOU ARE BETTER EQUIPPED TO HANDLE IT. What you are about to learn will mess you up if you aren't sure about the system. It will likely cause you to have more questions than answers, and if this is the case, stop immediately and revert to the default FIB system. I don't want to overwhelm you, but I DO want to give you options as an aspiring professional trader. We are going to look at modifications for:

• DC Bands • 55 EMA • ETCs / STCs • MaCO • Momentum Modulator


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DC Bands

These are the default setting to the DC Bands:

We are going to make 3 different adjustments to the DC Bands

DC Bands Alterations


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We are going to change the setting for: 1. Channel Period This is going to determine how wide the DC Bands are going to be from side to side. 2. Shift This is going to determine how far ahead of the price the DC Bands are going to be moved. It will also pull it away from the candles in a trending market. The bigger the setting, the wider the space between the candles and the DC Bands. 3. MA Period This is going to change the period setting of the DC Line. A bigger setting, the smoother the line. ORIGINAL: Channel Period - 2 Shift - 2 MA Period - 2 NEW: Channel Period - 3 Shift - 5 MA Period- 3


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The original settings:

The altered settings:


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The rules of the system still hold true, the Boss, ReBoss and the Highland trades must still follow the rules. The Highland trades will be a little more filtered as they won't show up quite as often, and the DC Line as the stop loss will provide a placement that isn't as likely to get chopped out of the trade. There are a few ways you can trade this altered version of the DC Bands: 1. Close inside the Bands. You can take a trade and close the position when the candle closes inside the bands. 2. Use the DC Line as a more aggressive trailing stop. Follow the DC Line with your stop loss. it's more aggressive than the DMP, but this new version is more relaxed and farther away from the price than the original. Try out these settings, and play with them to better understand what they do. You might not like these particular settings, but might prefer something a little different. Try them, test them out and see if there is one you like.


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55 EMA

The 55 EMA is a moving average we added to the chart to help us better determine an overall trend direction. It closely reflects the moving of the price on a higher timeframe and is a Fibonacci number. The 55 EMA is an awesome filter when we couple it with the DC Line. The DC Line is above the 555 EMA, we look for only long trades. The DC Line is under the 55 EMA, we look for only short trade. Pretty simple. The 55 EMA coupled with the DC Line gives us a trend direction. Trading in the direction of the trend gives us the higher probability trade setups. Some would argue that the 55 EMA can be a pretty slow moving average and won't allow us to catch more of the market movement when the trend changes. In this case, we can shorten the period of the 55 EMA to 21.


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The original EMA setting was 55:

The NEW EMA setting of 21:


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A chart with the original setting of 55 EMA, the arrow shows where the DC Line crosses above the 55 EMA confirming the trend has turned up:

A chart with the 21 EMA, the trend turns up earlier and it does provide us with a trade we wouldn't have otherwise been able to take.


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There is no coincidence that the 21 is also a Fibonacci number, I like to use these as my starting points. Going too much lower than the 21 EMA will start to interfere with the DMP, so that's about as low as I would go. You may want to try something a little slower, it will take the DC Line longer to cross over, but the trend will stay in one direction for a longer period of time. Longer settings could be something like 89 or even 144. Remember that the EMA is going to be used in conjunction with the DC Line. The DC Line is above the EMA, we look for long trades and when the DC Line is under the EMA, we look for short trades. The cross of the DC Line over the EMA does not give us a signal, it simply determines the direction we should be looking to trade. Try out some variation of the EMA settings, you may find the perfect one that suits you the best!


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ETCs / STCs

These are the indicators that we will use to actually get us into a trade. Accompanied with the DC Bands and the Momentum Modulator, the ETCs and the STCs are nice and clean filtering mechanisms that work together to tell us if the market has moved enough and in the right manner to warrant a trade consideration. Because they signal a trade, we don't necessarily want to slow them down too much, or at all. We could however, speed them up just a little bit. The settings by default are as follows: ETC1 - 5 ETC2 - 10 STC1 - 5 STC2 - 10 In order to speed them up and still give is the filtering mechanism they provide, we could use these settings instead: ETC1 - 3 ETC2 - 8 STC1 - 3 STC2 - 8 These new settings aren't just going to be faster, the signals they give can be quite different. They are more sensitive to the highs and lows the candles make, so the altered results could be dramatically skewed.


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The FIB system with the original ETC and STC settings:

The FIB system with the faster version of the ETC and STC indicators:


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MaCO

The MaCO is the Moving Average Cross Over indicator. It's a series of dots that shows us the order of 2 moving averages if they were placed on the chart. If the fast moving average crosses above the slow moving average, the dots will be blue telling us the trend is up, and is the dots are red, the trend is down as the faster moving average crosses below the slower moving average. It's an awesome moving average and is quite adjustable. You can choose the: Moving Average Periods This will be the setting of the moving average, 21 or 55 for example. Moving Average Method This will be the type of moving average, EMA or SMA for example. Moving Avenger Price This will be the candle positions, open, high, low or close. Moving Average Shift This will be how far forward to shift the moving averages. We can make these adjustments for both the fast and the slow moving averages. Moving averages can be used in 2 ways: 1. To determine a trend direction. This will be when you use slower moving average like the 21 and the 55. 2. To determine a trade signal. This will be when you use faster moving averages like the 2 and the 5.


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Below is the MaCO dialog box:

Here are the what the different fields mean: MaMethod: 0 = Simple 1 = Exponential 2 = Smoothed 3 = Linear Weighted MaPrice: 0 = Close 1 = Open 2 = High 3 = Low 4 = Median (HL/2) 5 = Typical (HLC/3) 6 = Weighted Close (HLCC/4)


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You can use the MaCO indicator solo and can replace the MTD indicator for trend direction.

The MaCO in this image is set to 8 and 13, it closely reflects the MTD in the timing of the trend changes.

Using a default setting of 21 and 55 will show you a longer term trend and not change as quickly as the MTD does. You can use a fast MaCO to help you confirm a trade signal given to you by the FIB system, the setting on the one below are 3 and 8:


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You can double up on the MaCO as well, you can place a longer term period with settings of 13 and 34 to give you a trade direction, and then use a much faster second one to give you trade signals in the direction of the trend. In the example, I used a 13 EMA and a 34 EMA setting for the top MaCO. The bottom MaCO was a 5 EMA and an 8 SMA for the signals. They slower one, the top, would help us determine the direction to trade, while the bottom one would conform the pair is moving in the right direction as it turned the same color as the upper one. In the example, we filter out poor quality trade setups and don't take the long trades due to the longer term MaCO not in agreement with the buys.


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Momentum Modulator

This the one indicator that can determine the momentum of the market. The Momentum Modulator can be a little sluggish in a slower moving market and in an attempt to better feel for the market, I have discovered some really nice settings. They still filter bad trades, but are a little quicker to signal a good one. The original settings:

The new settings:


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The Momentum Modulator with the original settings:

And the Momentum Modulator with the more responsive settings:


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2. Conclusion

This bears repeating, if you don't fully understand the Forex Income Boss trading system in its original form with its original settings, then this manual isn't going to be for you. The more advanced trader will be able to manipulate the settings of the various indicators without being overwhelmed by the many possibilities. If you are confident in your tweaking skills, or are just curious about the potential these indicator have, try them out with altered settings. Find something that you like, try one indicator that is changed and then you can try multiple changes together. These new suggestions aren't my telling you this is the new system, its simply me giving you options that you can explore. If you find a setting that you like (I personally like the new Momentum Modulator settings), please let us know in the forum in the members area. May all your dreams come true!

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FOREX INCOME BOSS...1. Modifying The FIB Indicators The Forex Income Boss system is an awesome system as it stands, it's been tested and it's making a lot of people a lot of money