Spotting a trend

Discussion in 'Technical Analysis' started by logan04x, Mar 21, 2010.

  1. logan04x

    logan04x

    Hi all, I'm working on a hobby software project to detect the trends and patterns inside a chart. This will keep me busy over the weekends and also educate me in technical analysis. And I had one question in this regard.

    Currently I spot up or downtrend inside a chart by looking at the highs and lows. This works but it finds way to many lines, which causes noise. I want to know what are the ways by which I can filter out the noise from the real trend lines.

    I have relied on the following heuristics for now:

    1. Number of points on the line (should be >= 3)
    2. Distance between the points

    Can the experts give some more ideas on what indicators and factors should I look at to filter the noise from the rest of the lines.

    I'm attaching a screenshot of my tool. As you can see that it finds many lines but I need to find the stronger ones out.

    PS: If anyone is keen on joining me on this project then I will be pleased, so please let me know.
     
  2. Andyroki

    Andyroki

    Do you care about the other lines. If you only care about current time, display only lines that intercept right side of the chart. Take a look at <code> http://ta-lib.org/ </code> I wish I found this before I did my stiff. Good luck with your project.
     
  3. logan04x

    logan04x

    Hello, thanks for the reply and useful link. If TA-lib can do pattern detection then it can be really useful for me.

    For now I'm following the tutorials on stockcharts.com and building their advice into my heuristics.

    Seems like you worked on something similar in the past? May I know how it went?
     
  4. oraclewizard77

    oraclewizard77 Moderator

    Most trading packages like Ninja Trader, Multicharts, TradeStation, Esignal already should have a free trend line indicator for them or its possible to buy and add-on for one of these packages.

    You then need to determine your time frame to display the trend, are you a swing trader that wants to hold for months, or are you a day trader or position trader. For example, do you want to watch a daily chart, a 15 min chart, or a 5 min chart.

    Then you need to determine what part of the trend are you in. Are you in the early stages, the late states, or no idea.

    Then you need to have a means to determine when a trend ends and/or a new trend begins.
     
  5. Weekend project? I am working on this for the last 10 years daily and still do not know the best way of doing it.
     
  6. what market are u referring to?

    1) futures
    2) forex
    3) equity
    4) bonds
    5) money market
    6) saving account
    7) checking account
     
  7. yepso

    yepso

    Forgive me but it's a circular pursuit and a waste of time. Sorry.


    1.All birds have beaks.
    2.Octopuses have beaks.
    3.Therefore an octopus is a bird.
     
  8. You need to take a logic class because that logical connective (1 then 2) doesn't equal 3.
     
  9. yepso

    yepso

    doi, Fukn kno it all and that's the point
     
  10. No, just a logic teacher that can spell. Wikipedia is a self expressed environment and not always correct.

    Please post a link to your source.
     
    #10     Mar 22, 2010