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I'm a regular on incrediblecharts.com forum, and that's not quite what I
understand a Blind Freddy to be. It was originally described by one of the
revered "elder statesmen" of the forum, Rocky2, and he did a lot of work trying
to find factors that were common to the early stages of a trend that ended up as
an uptrend so obvious that any Blind Freddy could see it.
Examples of BF trends are things like CTX, GUD, RDF etc - the trend is
blindingly obvious, but what clues are there that would alert us to one of these
trends BEFORE it became so obvious?
What Rocky described was the following:
1. Moving average crossover (e.g. 13 day above 26, or 7 day above 30, etc)
2. A definite DOWNtrend that then gets a definite break upwards
3. - and this is important: the bottom of the first significant swing LOW of the
new UPtrend must be HIGHER than the top of the last significant swing HIGH of
the DOWNtrend.
In other words, a gap must exist between the first pullback/retracement/swing
low of the UP trend and the peak of the last swing high of the DOWN trend.
Not all Blind Freddy setups work out, obviously - no foolproof 100% exists for
spotting these, but a surprising number do.
For what it's worth, have a look at the chart for MIG - a fairly classic BF
setup, and the uptrend still getting underway. I don't know how to post charts
on here, otherwise I could post the AmiBroker chart studies with the salient
points on it. Downtrend from January to May which then gets broken, MAs cross
over, then the Bottom of the swing low on 20th May is HIGHER than the peak of
the swing high on 21st april (even the one prior to that too, on 13th April).
So in theory, MIG should now head north-east for a good long run.... but you
know what they say about theory!!
PS: Holding MIG
Have a look also at the beginnings of the long uptrends of FUN and SFE.
Hope that helps and makes sense :)
Pete, Brisbane, Australia.
--- In amibroker@xxxxxxxxxxxxxxx, Martin Cooney <martin@xxxx> wrote:
> Hi All,
>
> I was reading an interesting post in the incrediblecharts.com forum
> concerning a Blind Freddy trend i.e. in simple terms, a BF trend is any
> trend that's strong and obvious.
>
> By the posters' definition there's a Blind Freddy trend in place if....
>
> ============================================================
> 1. The 11 period ADX on a weekly chart is reading 25 or higher. (a 12
> period ADX with a horizontal line at the 20 level gives similar results)
> 2. The strong ADX reading is supported by the weekly chart making higher
> tops and higher bottoms.
> 3. Two Exponential Moving Averages (I use 13 and 26 week EMA's) are in
> bullish configuration, i.e. the 13 is above the 26, they're pulling
> apart and there's 'daylight' (space) between them, and both are rising
> solidly.
> A BF trade is simply one where the entry occurs during a BF trend. The
> actual entry signal is usually a pullback in the trend, followed by the
> resumption of the trend. But any other type of entry would
> suffice....the main thing is that the trend is strong and obvious.
> ============================================================
>
> Has anyone coded this in the past ? I'm not entirely sure how this would
> be coded - any help to further my AFL education would be appreciated.
>
> Regards
> Martin
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