Technical Analysis and Colinearity

Discussion in 'Trading Software' started by jumpbackjack, Aug 25, 2009.

  1. A cardinal rule for the successful use of technical analysis requires avoiding multicolinearity, i.e using two indicators that use the same data in their calculation such as closing price to get confirmation of a price move. Does anyone know of a source (book, internet site, whatever) where they have listed the indicators that work well with each other. I learned this from Blollinger's site at He did state the RSI, MACD, and ROC would not be a good fit. However, RSI, OBV, Money Flow would be good. Makes perfect sense to me, I just don’t want to reinvent the wheel and I'm sure someone somewhere has this information.

    Thanks for our help.