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Dear MLRobb,
Thank you for your reply.
You missed the reference of Mr Cardwell work. Unfortunately I am not
informed. If it is available, please forward.
Dimitris Tsokakis
--- In amibroker@xxxx, MLRobb@xxxx wrote:
> Dimitris:
>
> You have probably a good idea. There was a body of work begun by
> Cardwell, which observed RSI 14 tending to a 40-80 bull-band,
> or a 20-60 bear-band:
>
> He introduced (I believe) the predictive concept of positive and
> negative reversals (being inverted divergences of RSI v. Price
> pivots); It had some beneficial predictive results concerning
> subsequent peak and trough price.
>
> However, as you indicate, these ranges are not transferable from
one
> stock to another, necessarily, or from an index to member stocks,
etc.
>
> Rather than manually adjust the RSI value, in attempt to fit price
> action into one of the above ranges, you seem to be striving for a
> more specific number, which should have good results.
>
> M.R.
>
>
>
> --- In amibroker@xxxx, "Dimitris Tsokakis" <TSOKAKIS@xxxx> wrote:
> > Oversold and overbought levels are usually selected by experience
> and may
> > be not satisfactory for a certain Market.
> > We can change levels in order to give a more reliable description
> of the Market.
> >
> > 1. When we select 30, 70 , i.e. equal distance from 0, 100, we
have
> not any reason
> > to do it. Perhaps 24, 70 for example would be more realistic.
> >
> > 2. I have the following idea:
> > I will examine the oversold time for each stock, I will take its
> average and so I will
> > define the "mean oversold time (MOT)" for the Market.
> > This will be done for an oversold level which gives MOT >5% of
> total days, else oversold is meaningless.
> >
> > 3. Then I will search for a certain overbought level which gives
> the same "mean
> > overbought time". I consider this more fair for the Market,
whereas
> 30, 70 or 20, 80
> > sounds abritary.
> > In other words, I ask levels which share the time equally for
> oversold and overbought
> > phases.
> >
> > Any opinion on this ?
> > (The thought behind the curtain is that buyers and sellers wait
> nearly the same
> > time interval, until they change the trend.)
> > (formulas are almost prepared, I want to discuss the basic
thought).
> >
> > Best regards
> > Dimitris Tsokakis
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