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The Z-Candle Plus strategy

Description

The Z-Candle Plus strategy is based on the Z-Candle system designed by the Italian trader Alessandro Zicolella. The Z-Candle charts work like Heikin Ashi charts but, according to their Italian creator, they have several additional advantages.

The following elements are typical for the Z-Candle Plus strategy:

  1. The signals are given by the unique Z-Candles.
  2. The Z-Candles are combined with Renko charts.
  3. A quality setting allows the trader to determine the number of signals.
  4. A simple visual aid assists the trader.

The Z-Candle Plus strategy can be used for day trading and scalping.

 

Suitable for : Market indices (DAX, DOW...)
Instruments : Futures and CFDs
Trading type : Scalping and day trading
Trading tempo : Several signals per day
Using NanoTrader Full : Manual or (semi-)automated

Click here to buy the Z-Candle Plus strategy in the store.

Click here to test a free demo of the NanoTrader trading platform.

 

The strategy in detail

The Z-Candles can be combined with any type of main chart (Renko, range bar, candles …). The strategy’s Italian designer, however, strongly recommends using Renko charts.

 

When to open a position?

A signal occurs when:

  1. an inversion (colour change) of the Z-Candles occurs, and
  2. the inversion candle is a hammer candle.

The time filter only allows signals between 09h10 and 18h00. The trader can change these values.

Also unique is the ‘quality’ setting for the inversion candle. A lower quality setting results in more signals of a lower quality. A quality setting of 4 or less is considered low quality.

Tip: Below the Z-Candles a visual aid in the shape of vertical green/red bars appears. The aid shows all inversion candles, including those which are rejected by the time filter.

 

When to close a position?

The open position is managed by a profit target and a periods high-low stop. The profit target is set to 0,2%. Position are not kept overnight. Any position still open at 21h00 will be closed automatically by the flat filter at the market price if (semi-)automated trading is activated.

This example shows the Renko chart at the top, the unique Z-Candles in the middle and the visual aid at the bottom. The purple zones in the main chart indicate the period during which the filter rejects signals.

Z-Candle Plus strategy


This example shows two trades. A short sell and a buy. The unique inversion Z-Candles which trigger the trades are visible below the Renko chart. Both trades reach their profit target.

Trading signals for DAX and DOW
 
 

Practical implementation

Using the NanoTrader Full follow these steps:

  • Select the financial instrument you want to trade and open the Renko chart.
  • Select the strategy in the "WHS Store" folder.
  • The first step is to set the Renko chart to the correct span. Open a daily chart of the index you want to trade and find its 30-day ATR in points. Divide the ATR value by 20. This gives the span for the Renko chart. For example, suppose the 30-day ATR of the DOW is 472 points. The correct span setting for the Renko chart is therefore 24 (= 472/20). The Z-Candles adapt automatically to the Renko chart.
  • If required, adapt any other parameters as described above.
  • Select your paper account or your real account.
  • If you want to trade semi-automatically (open position manually, close position automatically), activate TradeGuard+AutoOrder in the chart. If you want to trade automatically, activate AutoOrder in the chart.

Click here to buy the Z-Candle Plus strategy in the store

Click here to test a free demo of the NanoTrader trading platform