Discussion in 'Technical Analysis' started by wbbank, Aug 14, 2009.
I use a 15 day sma as a indicator. is that a good time frame for short term trading?
Yes Sir - if it is making you money
No Sir - if it is not
Food for Thought Sir
I do't think it is. Try using MACD . I checked MACD[12;26;9] it gives good result.
Use this formula
A := MACDLINE[12;26;9;0] > MACDSIGNAL[12;26;9;0] AND MACDLINE[12;26;9;-1] < MACDSIGNAL[12;26;9;-1]
IF ( A )
BUYTYPE := "STRONGBUY"
B := MACDLINE[12;26;9;0] < MACDSIGNAL[12;26;9;0] AND MACDLINE[12;26;9;-1] > MACDSIGNAL[12;26;9;-1]
IF ( B )
BUYTYPE := "STRONGSELL"
This formula I copied from iguidestocks.com's IGS FL language
you may need to modify it if you are using any other software or you can check it on the same software as the software is free for 15 days
add a 100/200 sma to see longer term trends, and possible s/r.
While we believe that indicators based on moving averages of price will always lag price, the moving average with the greatest efficacy is the JMA, Jurik Moving Average, from Jurik Research. It is an adaptive moving average with a setting for an adjustment to phase. MACD's built from the JMA will lead almost any other MACD.
In the chart below the lines represent 2 implementations of the JMA, the bars represent price and the dots represent an index of weighted biases taken from buying and selling volumes.
Note that the MA lines are to the right of price which means that they lag price as they must because the MAs can't change until after price changes.
Next please note that the dots are posted to the left of price which means that they lead price and are not contstructed of price but from dynamic readings of the balance of trade. Future prices are not motivated by past prices but rather are indicated by an imbalance in current buying and selling.
That's a nice looking chart, but quite frankly the price action in that chart is perfect for many trend indicators.
Show us a chart with more chop, please...
what is the name of this indicator?
"That's a nice looking chart, but quite frankly the price action in that chart is perfect for many trend indicators. Show us a chart with more chop, please..."
My post and chart were not so much about the state of the market but about LEADING indicators.
In this chart please note that the moves are 1/4 of the moves in the previous chart.
Also please note that in spite of the "choppy" condition of the market, the index of weighted biases, middle graph, demonstrated nine legs in a row and in almost every instance turned before price. Nine winning trades, in the chop, in a row, over a 4 hour period.
Does anyone test of this? Evidence based technical analysis is what were after no?
Two comments on the discussion so far. MACD crossings do not test out well at all on almost any market on any time frame over a sustained period.
Indicators that turn before price will keep trying to fade trends. They often win a little in chop, lose a bunch in trends. Now that not always the case, but I'd like to see the test over a few hundred trade examples.
"Indicators that turn before price will keep trying to fade trends. They often win a little in chop, lose a bunch in trends."
Take a closer look. The first chart shows 8 point legs which IS a trend for intra-session trades and the index of weighted biases did very well. In the second chart there were several hours of 2-3 pt chop and again the index did well.
Of course MACD's don't test well, neither do almost any price based indicators. It is not price that motivates future price but rather it is an imbalance in trade as reported by the index of weighted biases on the balance of trade as shown in both of these charts. In both cases the index lead price - in trends and in chop.
Separate names with a comma.