This is our absolute STAR PERFORMER. The Manhattan Quotient indicator uses 5 exponential moving averages, applies a logarithmic normalising equation to it and tries to predict where price is moving next. Sounds nerdy? Forget about all that. Just remember… Blue is Buy, Red is Sell. Check it out.
If you followed the Manhattan Quotient for this particular trade, from the point of color changing from red to blue, to it changing back from blue to red, you would have made 348 pips.
The Manhattan Quotient is not a scalping indicator. It is best used on the H1 timeframe.
The indicator has super complex settings… yes, its for nerds… ready? Check it out.
Just kidding. See? This is the most sophisticated, yet user friendly indicator you will ever come across. All the complex mat is hidden from you… You just choose the Period, timeframe and set the alerts to true and that’s it.
Period: This defines the loopback period for determining the baseline for the algorithm. 96 has worked very well for us in the past because its the most stable period. For example, 96 periods in M15 timeframe means 1 day. How? Because there are 96, 15 minute candles in a 24 hour period.
And you know D1 is a good way to understand where short term movements are and the algorithm can “normalize” all the small twitches that you see during volatile times (market opens, news, crossovers etc.) and removes it from the equation (but not entirely) to give you a more “clean” and “un-adulterated” version of where the market is really heading toward.
You can try the smaller timeframes and you will see more frequent instances of red and blue bars at short intervals of each other… this means that the Quotient is not able to accurately say if its going to stay blue or are we in a twitchy zig, zag period…
Be smart. Stick to 96…at least until you’ve made some money from the Quotient. Ok?
Drop the Manhattan Quotient indicator twice on your chart and apply a different timeframe to each. Check this out:
The first one is Timeframe 0, Period 96 on H1. The second one is Timeframe 240, Period 96 and also on H1.
Just by looking at it you can tell that longer term forecast is for the market to still move up. For ultra conservative traders, you should only make a move if both timeframes confirm the same result. Meaning: If both timeframes say blue – BUY. If both say red – SELL.