Would love to hear Mav and others' opinion on the current state of the NL. I feel Mav is still advocating its importance vs varying opinions from others. The thing is...the NL is very tedious to calculate...so if its importance is in question...I'd love to hear opinions. Maybe the low volatility market has dampen some of the significance of such a NL since NL is based on vol? Any feedback would be greatly appreciated.
Yeah, I read some of that. Ultimately, I think most of us here got the big picture from posts like the ones I mentioned and refined things to suit our own beliefs. Back then, I found a lot of value reading those posts so I thought others might too. I am a "code head" so I can relate to what Mav is doing. I went through the same thing recently when I built my testing framework.
I think a many have said that the NL is a good tool to measure relative strength/weakness within a portfolio of instruments. In my opinion, its useless if you are trading a couple of correlated markets or just one market. Since my participation is limited to the petroleum complex, I have not found value in using NLs. I dont mean to say that NLs dont work but that in my case, I cannot wait on the sidelines while the NLs confirm. The capital at my disposal needs to be put to work every day.
Well, you have my admiration and envy. All I can do at this stage is add filters to avoid being bitten on the backside. What I would love to do is analyse what happens the day before the data release when the technicals say x. Not waiting for rain, I'm using simple Excel nested IFs to analyse how far currencies can move from the EMA. So far for my Guinea pig, AUDUSD, it's a bit above 3% as a max, mostly not. Looking to refine trade management, and having to do it the hard way.
Let me say this with absolute certainty. If you are Day Trading the DAX, number lines, derivatives, ACD levels, whatever, are all a complete waste of time. What happens on any given day has nothing to do with any of those. It's not in any great trend, just making highs and falling back. Perhaps that's why.
How about looking for a backtesting tool in Excel? I am sure someone is selling it. When you add a filter, at least you will know for sure whether your historical results would have been better or worse.
Agreed technicals mean nothing to the big fish and it is a huge mistake to try and make sense of a market. Instead we should be listening to the market, as when you know how to listen the market can tell you a great deal of information and ACD gives you the best method I have seen yet for reading the intentions of others.