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Yes, I use arcs from time to time in conjunction with other studies. With respect to the change relative to price data as a function of scaling, please refer to my previous "Circular Fibonacci Arcs" post (#3837). As noted there, unlike the trader that draws arcs on a piece of paper, it might be necessary to use different retracement levels (indicates need for flexibilityin canned tools) or even disregard the study. It is not necessary to use a tool when a clear signal is not generated. Drawing tool studies are not black and white like many treat trading systems, and the trader must interact with them and be in touch with the market, which is actually why I prefer this approach. Arcs, however, are a standard tool that is used throughout the trading community and should not be disregarded.
To answer your question directly, there is no standard window, etc. for generating signals with arcs, but when used with other drawing tools (e.g., trendlines, Fibonacci fans, Gann fans, Fibonacci and Gann price/time targets,Andrews and Schiff forks) and momentum and trending indicators the signalsthat are generated are very strong, low-risk trades. Is this any different than saying that a trading system is not 100% correct? Or question whether a trading system should be used by itself rather than in conjunction with other tools and indicators? I think not. It is important to realize that few (at least amongst the traders that I interact with) use any trading system, drawing tool, or indicator as a stand alone signal. Once this is accepted than the goal should be provide a large, flexible collection of tools and studies that the trader can pick and choose from, and not worry aboutwhether any particular tool, indicator, or study can be used by itself. So far, nobody has found the holy grail.
As with any tool, those that like arcs use them and those that don't simplydisregard them. No different than, for example, Fibonacci, Elliott Wave, or Gann analyses that are used religiously by some and ignored by others, or for individuals that do not use mechanical trading systems in favor of a variety of drawing tools. There is no right or wrong approach in this business, but it has been argued that the program is the least important part of the equation. Factor in the trader's psychology and money management andany reasonable approach will work, albeit some better than others. It is the "some better" phrase that is the driving force for seeking the next better tool, indicator, system, etc.
The arc problem, however, reflects the difficulty of translating from chartpaper to a computer. As I mentioned in my previous posts this is characteristic of this study, and I am unaware of a program that has found a solution. Also, I noted (#3837) that elliptical arcs might serve the same purpose as circular, but to the best of my knowledge they have not been tested and are not widely accepted. They are in a very real sense uncharted waters that raise yellow flags. When circular arcs work they work quite well, particularly in conjunction with line studies. Elliptical arcs might serve aswell, but for general use that has to be proven and accepted by the trading community. Until that is done they will not be used by the majority of chartists who are not interested in researching new charting tools, as thereseems to be more than enough available for the job.
The other scaling problem associated with drawing tools that I am aware of is associated with trendlines. Metastock is the only program that I have that permits channels to be drawn with a semi-log scale, although some others will have the ability in the near future. In some programs, channels arecreated with a parallel line drawing tool, but in Metastock it is done by drawing a trendline, creating a parallel line, and moving it to the lower channel position (essentially a manual tool vs an automatic tool). Works fine for a linear scale, but not for semi-log where the parallel line changesits angle relative to the screen, which defeats the purpose. In this case, such channels are created with a trendline-by-angle tool that references the screen coordinates and is applied to both sides of the channel. The attached shows both constructions.
I have not thought too much about these problems, since with the tools provided by the programs that I have they are not a problem. There may be one or two more problem drawing tools out there, but I am not aware (read do not use) of them.
Hope that answered your questions and concerns.
Bill
----- Original Message -----
From: Tomasz Janeczko
To: amibroker@xxxxxxxxxxxxxxx
Sent: Tuesday, August 14, 2001 3:42 AM
Subject: Re: [amibroker] Cycles
Bill,
You have given the following citation from Windows on Wallstreet manual:
"A common technique is to display both Fibonacci Arcs and Fibonacci Fan Lines and to anticipate support/resistance at the points where the Fibonaccistudies cross. Note that the points where the Arcs cross the price data will vary depending on the scaling of the chart, because the Arcs are drawn so they are circular relative to the chart paper or computer screen."
I would like to ask you what is the value of of price/date targets that MOVE depending on the window size, scaling, zoom factor and so on. How can you trade on these signals, when once you get the signal on Monday, then youresized the window a little and get the signal on Friday ???? What is then"trading-certified" window size and zoom factor? How one can be sure that the resolution he uses is a correct one?
I know that this arcs are looking nice but I am curious how one could base actual trades them?
Do you trade on them?
Best regards,
Tomasz Janeczko
------------------------------------------------
AmiBroker - the comprehensive share manager
http://www.amibroker.com
Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.
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<DIV><STRONG><FONT size=2>Tomasz:</FONT></STRONG></DIV>
<DIV><STRONG><FONT size=2></FONT></STRONG> </DIV>
<DIV><STRONG><FONT size=2>Yes, I use arcs from time to time in conjunction with
other studies. With respect to the change relative to pricedata
as a function of scaling, please refer to my previous "Circular Fibonacci
Arcs" post (#3837). As noted there, unlike the trader that draws arcson a
piece of paper, it might be necessary to use different retracement levels
(indicates need for flexibility in canned tools) or even disregard the
study. It is not necessary to use a tool when a clear signal is not
generated. Drawing tool studies are not black and white like many treat
trading systems, and the trader must interact with them and be in touch with the
market, which is actually why I prefer this approach. Arcs,
however, are </FONT></STRONG><STRONG><FONT size=2>a standard tool that is
used throughout the trading community and should not be
disregarded.</FONT></STRONG></DIV>
<DIV><STRONG><FONT size=2></FONT></STRONG> </DIV>
<DIV><STRONG><FONT size=2>To answer your question directly, there is no standard
window, etc. for generating signals with arcs, but when used with other drawing
tools (e.g., trendlines, Fibonacci fans, Gann fans, Fibonacci and Gann
price/time targets, Andrews and Schiff forks) and momentum and trending
indicators the signals that are generated are very strong, low-risk
trades. Is this any different than saying that a trading system is not
100% correct? Or question whether a trading system should be used by
itself rather than in conjunction with other tools and indicators? I think
not. It is important to realize that few (at least amongst the
traders that I interact with) use any trading system, drawing tool, or indicator
as a stand alone signal. Once this is accepted than the goal should
be provide a large, flexible collection of tools and studies that the
trader can pick and choose from, and not worry about whether any particular
tool, indicator, or study can be used by itself. So far, nobody has
found the holy grail.</FONT></STRONG></DIV>
<DIV><STRONG><FONT size=2></FONT></STRONG> </DIV>
<DIV><STRONG><FONT size=2>As with any tool, those that like arcs use themand
those that don't simply disregard them. No different than, for example,
Fibonacci, Elliott Wave, or Gann analyses that are used
religiously by some and ignored by others, or for individuals that do not use
mechanical trading systems in favor of a variety of drawing tools. There
is no right or wrong approach in this business, but it has been arguedthat
the program is the least important part of the equation. Factor in the
trader's psychology and money management and any reasonable approach will work,
albeit some better than others. It is the "some better" phrase that is the
driving force for seeking the next better tool, indicator, system,
etc.</FONT></STRONG></DIV>
<DIV><STRONG><FONT size=2></FONT></STRONG> </DIV>
<DIV><STRONG><FONT size=2>The arc problem, however, reflects the
difficulty of translating from chart paper to a computer. As I
mentioned in my previous posts this is characteristic of this
study, and I am unaware of a program that has found a
solution. Also, I noted (#3837) that elliptical arcs might servethe
same purpose as circular, but to the best of my knowledge they have not
been tested and are not widely accepted. They are in a very real sense
uncharted waters that raise yellow flags. When circular arcs
work they work quite well, particularly in conjunction with line studies.
Elliptical arcs might serve as well, but for general use that has to be proven
and accepted by the trading community. Until that is done they will not be
used by the majority of chartists who are not interested in researching new
charting tools, as there seems to be more than enough available for the
job. </FONT></STRONG></DIV>
<DIV><STRONG><FONT size=2></FONT></STRONG> </DIV>
<DIV><STRONG><FONT size=2>The other scaling problem associated with drawing
tools that I am aware of is associated with trendlines. Metastock is the
only program that I have that permits channels to be drawn with a semi-log
scale, although some others will have the ability in the near future. In
some programs, channels are created with a parallel line drawing tool, but in
Metastock it is done by drawing a trendline, creating a parallel line, and
moving it to the lower channel position (essentially a manual tool vs an
automatic tool). Works fine for a linear scale, but not for semi-log where
the parallel line changes its angle relative to the screen, which defeats the
purpose. In this case, such channels are created with a trendline-by-angle
tool that references the screen coordinates and is applied to both sides ofthe
channel. The attached shows both constructions.</FONT></STRONG></DIV>
<DIV><STRONG><FONT size=2></FONT></STRONG> </DIV>
<DIV><STRONG><FONT size=2>I have not thought too much about these problems,
since with the tools provided by the programs that I have they are not a
problem. There may be one or two more problem drawing tools out there, but
I am not aware (read do not use) of them.</FONT></STRONG></DIV>
<DIV><STRONG><FONT size=2></FONT></STRONG> </DIV>
<DIV><STRONG><FONT size=2>Hope that answered your questions and
concerns.</FONT></STRONG></DIV>
<DIV><STRONG><FONT size=2></FONT></STRONG> </DIV>
<DIV><STRONG><FONT size=2>Bill</FONT></STRONG></DIV>
<DIV><STRONG><FONT size=2></FONT></STRONG> </DIV>
<DIV><STRONG><FONT size=2></FONT></STRONG> </DIV>
<BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
Tomasz Janeczko
</DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A title=amibroker@xxxxxxxxxx
href="mailto:amibroker@xxxxxxxxxxxxxxx";>amibroker@xxxxxxxxxxxxxxx</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Tuesday, August 14, 2001 3:42
AM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> Re: [amibroker] Cycles</DIV>
<DIV><BR></DIV>
<DIV><FONT face="Arial CE" size=2>Bill,</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>You have given the following citation from Windows on
Wallstreet manual:</FONT></DIV>
<DIV><FONT size=2>"A common technique is to display both Fibonacci Arcsand
Fibonacci Fan Lines and to anticipate support/resistance at the points where
the Fibonacci studies cross. Note that the <STRONG>points where the Arcs cross
the price data will vary depending on the scaling of the chart</STRONG>,
because the Arcs are drawn so they are circular relative to the chart paper or
computer screen."
<P>I would like to ask you what is the value of of price/date targets that
MOVE depending on the window size, scaling, zoom factor and so on. How can you
trade on these signals, when once you get the signal on Monday, then you
resized the window a little and get the signal on Friday ???? What is then
"trading-certified" window size and zoom factor? How one can be sure thatthe
resolution he uses is a correct one?</P>
<P><FONT face="Arial CE">I know that this arcs are looking nice but I am
curious how one could base actual trades them</FONT><FONT
face="Arial CE">?</FONT></P>
<P>Do you trade on them?</P>
<P><FONT face="Arial CE"><BR></FONT><FONT face="Arial CE">Best
regards,<BR>Tomasz
Janeczko<BR>------------------------------------------------<BR>AmiBroker-
the comprehensive share manager<BR><A
href="http://www.amibroker.com";>http://www.amibroker.com</A></FONT></P>
<P><FONT face="Arial CE"></FONT> </P>
<P><FONT face="Arial CE"></FONT></FONT> </P></DIV><BR><TT>Your useof
Yahoo! Groups is subject to the <A
href="http://docs.yahoo.com/info/terms/";>Yahoo! Terms of Service</A>.</TT>
<BR></BLOCKQUOTE></BODY></HTML>
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