Hi traders. In this article, I will introduce you in more detail to the Friedrichs indicator, which I have only recently registered, but seems very effective to me.
What is it and where can I find it?
You will find it classically among the indicators on the page Tradingview. This indicator shows you buy and sell orders. On the charts, it looks something like this:
So this indicator shows you exactly when to buy and when to sell. However, the time frame is important. The higher the time frame, the lower the frequency of trades and the higher the success rate – from my subjective point of view and backtest. It is also quite logical, because there are many more trades in the lower time frames and, most importantly, there is a much higher share of loss-making trades. Personally, I use this indicator for at least 4H and 6H, but ideally for 12H and 1D. If you do not want to get bogged down in lengthy analyzes, or you are looking for an effective and simple tool that will tell you exactly when to buy and when to sell, then Friedrichs is just right for you.
How is the Friedrichs indicator calculated?
It should be noted at the outset that the indicator was developed on the BTC / USD pair. Thus, it can be said that the indicator is designed for cryptocurrencies and should therefore also take into account extreme fluctuations and volatility. It was set to have the best results on 4H, 6H and 1D graphs, as I wrote above.
What does this indicator actually use to evaluate the buy and sell signal?
- Heikin Ashi candle values.
- EMA golden crossy.
- RSI divergence.
- Much more (secret of the inventor).
It should be noted that the indicator has already undergone several variations and this is not the first version. However, it is up to you in what context you will use the indicator. However, I would like to point out in advance that I personally use this indicator as a supplement to my routine analysis. Despite his high success rate, I just don’t trade according to it.
Demonstration of the Friedrichs indicator
Let’s look at the last period on the 12H chart and as an example we will mention the cryptocurrency NEO, which will be in pairs with the dollar, so NEO / USD. The most important thing we are currently seeing is that it is not signaling us a BUY signal yet. It must be said that the Friedrichs indicator rarely catches the exact bottom and the complete TOP.
It is an indicator that also “waits” for golden crosses and divergences on RSI for its characteristics and mathematical calculations. However, when we retrospectively evaluate the latest trades, we first bought at $ 10.74 and sold at $ 12.75, which of course was not TOP, but we closed the profit. Before that, however, we caught a much bigger move, namely buying at $ 13.58 and selling at $ 17.35. The sum totals about 29% in 19 days, which is definitely not to be discarded due to the simplicity of the indicator. It is not for nothing that it is said that sometimes the simplest solution is the best.