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The MACD combines a
fast and slow indicator. It isn't the Holy Grail, under some conditions it
fails.
<FONT face=Arial
size=2>
<FONT face=Arial
size=2>Lionel
<FONT face=Tahoma
size=2>-----Original Message-----From: Dimitris Tsokakis
[mailto:TSOKAKIS@xxxxxxxxx] Sent: Friday, March 28, 2003 3:58
AMTo: amibroker@xxxxxxxxxxxxxxxSubject: [amibroker] Fast
OR Slow ? [was TRENDING vs RANGING]
Here is my basic thought on the well known delay
problem.
A fast [and smart] indicator will catch the trend ASAP, but it
will leave the trend prematurely.
Another slower [and more wise] indicator will loose the early
birds, but it will be rewarded with the delayed exit
and enjoy the sweetest part of the movement.
Both methods have their plus and minus.
The ideal combination of two [or more] speeds would include
all the advantages in one strategy.
Cond0 is a fast trend detector and gives an entry at A0 and
follows untill B0.
Cond1 is a slower detector, the entry is +1 delayed at A1, but
the exit is +3 delayed at B1.
Which is better ?
There will be many opinions, but any conclusion is related to
the time frame the market moves.
Trends duration is not always the same and, unfortunately,
nobody knows it in advance !!
Just after an 1-bar breath [the white dotted line], the market
decides to move higher again for 6 bars.
My slow indicator gives now a quick entry at A11, the "fast"
is not that fast anymore and begins at A00.
[Fast and slow are not absolute words, as you probably
agree...]
Both indicators agree for a final exit
at B00.
What is the optimal solution ?
We often read in various T/A books or articles that this is
the destiny of any T/A attempt.
They seem to agree that the "nature" of an indicator is
covered by the postulate "fast in/fast out OR slow in/slow out".
I do not like it and I will try to break it.
I need a smart trend detector and a smarter way to COMBINE the
fast and the slow rate.
Do I ask something unrealistic ?
I would appreciate your opinion.
Dimitris Tsokakis
PS
I think this was the spirit of the beginning of this
interesting thread :
The "eye" would decide immediately "entry at A0/exit at
B00".
I will give it a try.
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