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Brian Bell's BWL



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List,
 
For the many that have asked for notes on Brian 
Bell's presentation...here's the high points (I think).:
 
1. The "Bell Warning Line" differs from Chande's 
VIDYA and Kaufman's Adaptive moving average 
    a.  VIDYA and the 
AMA:  as the market speeds up, the indicator gets faster; as the market 
slows, so does the indicator
    b.  BWL:  as the 
market speeds in a direction, the BWL slows down; as the market speed slow,the 
BWL gets faster
 
2.  In a consolidation, there are a lot of 
swing highs and swing lows...in a strong move, there are no swing highs or swing 
lows
 
3.  Finding a swing high:  Strength = 
1:  There must be at least one lower high on each side of the swing 
high.  Strength = 2: There must be at least two lower highs on each side of 
the swing high bar.
 
4. Count how many bars since a swing high or swing 
low has occurred.
 
5.  The smoothing constant is inversely 
proportional to the number of bars since a swing high or swing low
 
6.  User specifies:  "StartSC" -the 
"starting smoothing constant" & "Sensitivity" - the "strength" of the swing 
high and swing low bars
 
7.  How to calculate the BWL:  

 
bsHigh = bars since swing (Strength)
bsLow = bars since swing low 
(Strength)
p = min(bsHigh, bsLow)
sc = StartSC / p
BWL = (1 - sc) * BWL(previous) + sc * 
Price
 
Wow, another lagging indicator that behaves similar 
to a 21 day simple moving average.  Since the implementation of this 
indicator is totally subjective and it's not used as a timing 
device...personally, I can't find a use for it in my work.
 
I hope I didn't violate the spirit of this 
presentation.  Brian is a real pleasant guy.  I think I have the 
calculations correct.  I took notes with a crayon and I spilled my ginand 
tonic on the handout he supplied....so, this is my best shot.
 
Take care,
 
Steve
<A 
href="">www.cedarcreektrading.com