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Dimitris:
Use of subjective criteria is definitely a
problem. But above and beyond that is the question of whether any
technique can be treated as a stand-alone analysis. If there is
one, I have not found it.
Bill
<BLOCKQUOTE
>
----- Original Message -----
<DIV
>From:
DIMITRIS
TSOKAKIS
To: <A title=amibroker@xxxxxxxxxx
href="">amibroker@xxxxxxxxxxxxxxx
Sent: Sunday, June 03, 2001 2:10 PM
Subject: [amibroker] CANDLESTICKS
THEORIES AND AMIBROKER USERS
We read many articles accompanied by full explanatory
graphs, about how a candlestick formation can predict short future
behavior of a certain stock or index. The weak point of these (very well
written ) articles, is when we come to phrases like "mostly bullish
formation" or "no further bearish confirmation required" etc. At thisvery
moment, the only possible way is to rely upon experience of author,
believe it or not. I think that total absence of criteria may
cultivate phanatism. On the other side, explanaroty charts are
carefully selected to emphasize documents. (Some times I wonder if the
author is advertising "bearish harami". Anyway.)Amibroker users have
the ability to decide if a candlestick formation is effective or
not.After short notes in #2017 and #2047, I will give another
example.EVENING STARA 3 days bearish formation, consisting ofa
long white (close>open) candle, followed by a "doji"(close nearly equal
to open) and ending with a long black (close<open) candle.Traders
following candlesticks have two severe questions :a. After the secondday
formation (white+doji), shall we see a black candle ??b. After the
third day, with "evening star" already built, shall we have the extra
bearish results promised by many (and sometimes remarkable) authors
???Let us follow an Amibroker user:Question a.Write in
Automatic Analysis the
codeCOND1=IIF((ABS(C-O)<0.1*ABS(H-L))AND(C>ref(h,-1)),1,0);COND11=IIF(REF(COND1,-1)>0
AND C<REF(C,-1) AND C<O and
o<ref(c,-1),1,0);filter=cond11==1;numcolumns =
3;column0=cum(cond1);column1=cum(cond11);column2=100*CUM(COND11)/cum(cond1);column0name
=
"TIMES";column1name="CONFIRM";column2name="%";column0format=1.0;column1format
= 1.0;column2format = 1.0;BUY=COND1;SELL=COND11;(searching
the whole market, for a selected period of time) OR (searching a certain
stock for a long period)Press "Explore"In columnn "TIMES" you read how
many times a 2 days formation occurred before a possible evening
star.In columnn "CONFIRM" you read how many times an evening star was
fully formated.In columnn "%" you read the percentage of
confirmation.BUY-SELL is used here just for tutorial
reasons.Doubleclick a stock on the Results list and you see green arrows
for (many) 2days formations and red arrows for (fewer) fully formated
evening stars.If the % is high in some stocks, perhaps this behavior
will have a repetition.NOTHING MORE, NOTHING LESS. NO MORE SAFE
THEORETICAL PROMISES .BARE AND STRICT STATISTICS.If the % is low,wait
fore more future data to be convinced.Question b.What
means "bearish" for you?I suppose in the following code that price will
loose 20% the next 20 days after an EVENING STAR appeared. Write in
Automatic Analysis the following code.Put another P or D, according to
your "bearish" point of view.P=10;/* change percentage
loss*/D=20;/* change days to wait for bearish
confirmation*/COND1=IIF((ABS(C-O)<0.1*ABS(H-L))AND(C>ref(h,-1)),1,0);COND11=IIF(REF(COND1,-1)>0
AND C<REF(C,-1) AND C<O and
o<ref(c,-1),1,0);COND111=IIF(REF(COND11,-20)>0 AND
LLV(C,20)<(1-(P/100))*REF(C,-D),1,0);filter=cond111==1;NUMCOLUMNS=5;COLUMN0=CUM(COND11);column0name="TIMES";COLUMN1=CUM(COND111);column1name="BEARISH";COLUMN2=100*COLUMN1/COLUMN0;COLUMN2NAME="%";column0format=1.0;column1format=1.0;column2format=1.0;SELL=COND11;BUY=filter;Press
"EXPLORE".You can read how many TIMES an evening star occurred, how many
BEARISH confirmations followed and finally the beloved %.(BUY-SELL are
again tutorial: A red arrow with each evening star and a green arrow 20
days later).For the stocks you read 100%, O.K. take a look next
time.This is one of the valuable informations you could get from
Amibroker.Thank you for your time.Dimitris
TsokakisYour
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