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Trading with the QQE

 

QQE, which is actually Quantitative and Qualitative estimation is based on exponential moving averages of RSI or relative strength indicator. QQE can be used in many ways and based on many different levels of smoothing averages, most popular that I have seen used in my trading are 2, 5, 30 and 60, I employ 5 for my upper panel usage and 60 for my lower panel usage, this way I have a variety that is spread apart quite a bit.

This is helpful when looking to enter the market, as when both levels of QQE are moving in same direction, there is a very high (95%) chance of an ensuing move going forward and being successful. The key to QQE is not so much what the actual indicator does, but rather what it shows in relation to the EMA’S one employs in their upper panel in coordination with the candles or bars.

The key to the QQE is the smoothing factor of the QQE or the number placed for the smoothing of the indicator lines. The lower the number, the more bumpy of a line and certain confusion to what is really going on with the market, the higher the number, the smoother the line. So the best way to use the 2 different QQE lines is to place one in one panel of ones platform with a lower smoothing number and the next panel down place the 2nd QQE with a higher smoothing factor, so one can see and optimize what is going on in the market at both a shorter and longer term at same time.

I employ a factor of 5 for my upper QQE which has just a blue line and when it starts to move up, we start to look long, but no entry until QQE crosses the 50 line which is red and the exponential moving averages that I use start to cross over and upwards, the lower panel QQE is used with the higher factor of 60 for a smoothing factor.

Download my file for QQE in MetaTrader4.

With three lines employed in bottom QQE, we really want to see the cross of the dotted red and white lines by the solid blue line, so we have confirmation of the first panel QQE, it is not necessary to have all these lines cross the solid red 50 line. If it does, well then that is awesome for extra confirmation.

Remember, the key is to see upward movement by the QQE. Go along with upward movement of the exponential moving averages. I also place a volume indicator to help in trading, but the key to my trading is all in the QQE and exponential moving averages, simple and smart.


Contributed by Hlass, & FibMaster at
http://www.traderzine.com
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Topics: Forex, Futures, Minis, Options, Stocks, Technical Analysis | No Comments »

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