I’ve been playing around with ideas tonight, some. Not new ideas, really… but old ideas re-built with new code.
I’m sure many of you are familiar with scalping techniques built around rainbow ribbons of weighted averages. Tonight I made a new custom moving average to try out… and whenever I make a moving average, I make a rainbow out of it, for laughs. Here’s an example entry, when the lines sort themselves out, and continue to expand through a pullback:
It’s an easy technique to understand… in my experience, hard to use in real-life trading, though. Your mileage may vary.
Also, I’m reviewing a new-ish book by Alexander Elder. I can’t read an Elder book without thinking back to the legendary Triple-Screen approach. So, I tweaked some old paintbar code, and added in things like my volume-splitter and rolling VWAPs, and the trusty GCycle_Stochastic_Smooth… and came up with this triple-screen incarnation:
I will probably sim-trade it Monday, and see if it’s usable. In theory, it works well. And of course, if it works well, I will make sure my eotpro Elite Series subscribers have access to all the parts.
I’m running out of energy tonight, but maybe tomorrow I will be able to post my review of that Elder book.
August 9th, 2008 at 9:11 am
I read Elders book. The time 3 timeframes made sense. As you know he had the Force Index Oscillator.
RAW FORCE INDEX = VOLUME (i) * (CLOSE (i) - CLOSE (i - 1))
FORCE INDEX = MA (RAW FORCE INDEX, N)
Where:
VOLUME (i) - the volume of the current bar;
CLOSE (i) - close price of the current bar;
CLOSE (i - 1) - close price of the previous bar;
MA - any moving average: simple, exponential or linear weighted;
N - smoothing period.
You would think I would have caught on to the importance of volume a bit earlier by reading his book ;)
August 12th, 2008 at 5:53 pm
Hey Zoomie, that force index is actually a pretty good indicator. Of course I prefer the EOTPro volume measurements :-) But if I had to choose public indicators, I like the blau TVI and the elder force index.
August 12th, 2008 at 7:12 pm
Ya, I haven’t seen an indicator like the Splitter anywhere. You’re not just talkin jive, man ;).