That's the PV2 indicator (or the PV_Div, which is the deluxe version of PV2) in the bottom window, and the Renko Signal Bands V2 bracketing price action. Both indicators are from the PV2 package at http://fxgoldminer.com
The part that really caught me off guard is at least three of my traders are doing the same thing: Using the PV2/PV_Div for their original entry, then using RenkoHMA for a SECOND entry, and exiting either on the touch of the Renko Signal Bands (touch of the top band for a Buy or the bottom band for a Sell) OR when the PV2 line cross going the other way.
In effect, they are using the HMA as a sort of Manual AutoScaler Signal and adding in an extra trade when PV2/PV_Div has them up 2 or 3 boxes already.
Because when you get to the point where the Renko HMA signals the buy or sell, traders are almost always already up 2 or 3 boxes from the earlier entry. If the second trade falls apart and never moves into profit, as long as they exit the trade before price returns to their original entry, they profit on the trade, or, in the worst case scenario, end up break even.
I haven't mentioned this so far, but the HMA is based on the idea that trades have three parts: Beginnning, Middle and End. If you can catch a trade at the beginning, as happens with PV2/PV_Div, you maximize your pip gain. But sometimes those trades don't pan out and you are stuck figuring out an exit that makes sense.
But if the beginning move pans out, the Middle Move is typically long enough and profitable enough to justify the risk in taking this second trade. This is what the HMA attempts to locate and display. That middle section where the pips/points should come a little bit easier.
And the end, well, the end is the end. Sometimes as big as the middle move and sometimes not. But as long as you have a mechanism in place to deal with the end you can close out your trade at a price where you bank pretty much the vast majority of the pips/points that were on the table for the taking.
So if your PV2 Beginning trade falls apart, you lose whatever it is you have at risk.
But when it works, as it does about 8 out of 10 times with the PV2, you simply wait for the HMA to give you the nod and enter a second trade.
Now you've doubled the pip/point value of the trade, and in the case of charts like Gold, those $2 boxes are now worth $4 when you add the second trade, and you don't need to bank too many $4 Gold Renko boxes to have a pretty good day.
So if you have the PV2 package (and most of you reading this already do) add the PV2 or PV_Div and the Renko Signal Bands V2 to your chart, along with the Renko HMA, and be prepared to start having days most traders don't even dare dream about.
If you still don't have PV2, it's at http://fxgoldminer.com
If you still need Renko HMA, it's at http://fxgoldminer.com/lite
Jeff
