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The basic property of the Powsmooth
<A
href="">http://groups.yahoo.com/group/amibroker/message/40077
is to filter out fast zigzags, passing through them, without
introducing important lags.
When we use a cross level trading system, many times we loose
money because of oscillation of our indicator around the
critical cross level.
If our cross level is "good", then we should expect [and we
shall see...] strong ask and bid when we are close to this level.
The result is the well known repeated
whipsaws, which usually annihilate our profits.
Unfortunately, the solution is not to smooth our nervous
indicator, it will usually loose its charm to catch quickly the market
changes.
In this case [traders who use fast indicators will understand
very well this syndrom...] the PowSmooth may offer great
assistance.
Its smart curve will gently pass between the accumulated ziggy
points, avoid cascade entries/exits and substantially increase our
profits.
See a characteristic example in the att. gif.
In the first case, the dratio gives 8 trades in two months,
with a final +13%, oscillating around the critical level D=35.
The PowSmooth, for the same ^NDX period, gives two clear
trades and maximizes the profits to +20%.
[settings buy/sell/short/cover at +1open, commission 0.5%,
stops disabled]
The level D=35 is critical for the market, the D_ratio
frequntly oscillates up and down, until the market takes the decision to go
higher
or lower.
The usual D_ratio system gives for the whole market nice
profits, +340% since Jan2000.
The PowSmooth D_datio makes the difference : +940% for the
same period and settings.
For ^NDX we could nearly double the profits:
Usual D_ratio : +550%, 37trades/28winners/9losers
PowSmooth : +1165%, 27trades/23winners/4losers.
A +550% is not that bad, a +1165% is much better.
For CSCO, the signal generator of this transcendental system
[since we "borrow" CSCO data for the basic curve] the situation
needs
no further comments : the comparison is +370% vs
+2000%.
If you use fast and ziggy indicators and Cross level systems,
take a look at the PowSmooth, it may make you smile.
Dimitris Tsokakis
I use the trancendental CSCO D_ratio code
/*Powsmooth CSCO D_ratio, written and used by D.Tsokakis, Sept
2002*/
<FONT
size=2>H=Foreign("CSCO","H");L=Foreign("CSCO","L");dratio=DEMA(1000*(H-L)/(H+L),20);EnableScript("jscript");<%dratio
= VBArray( AFL( "dratio" ) ).toArray();s=new Array();t=new
Array();s[0]=0;t[0]=0;for(i=1;i<dratio.length;i++){{t[i]=Math.pow((dratio[i]*dratio[i-1]*dratio[i-2]),1/3);}{s[i]=Math.pow((dratio[i]*dratio[i-1]),1/2);}}AFL.Var("s0")
=s ;AFL.Var("t0")=t;%>Powsmooth=(s0+t0)/2;
RRR=Powsmooth;// Replace this line with RRR=dratio; to see the
usual
DratioresultsD1=35;F1=RRR>=D1;F2=RRR<=D1;Sell=F2;Buy=F1;Buy=ExRem(Buy,Sell);Sell=ExRem(Sell,Buy);Short=Sell;Cover=Buy;Short=ExRem(Short,Cover);Cover=ExRem(Cover,Short);
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