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What is a CIT point?
Joseph Biran
____________________________________________
-----Original Message-----
From: amibroker@xxxxxxxxxxxxxxx
[mailto:amibroker@xxxxxxxxxxxxxxx] On Behalf Of bilbo0211
Sent: Saturday, June 28, 2008 1:05 PM
To: amibroker@xxxxxxxxxxxxxxx
Subject: [amibroker] Re: Predicting future turning points.
Hi Dennis,
> These two are just a few of the possibilities. They are
based on
> combining two lines that have a probability of being a
support or
> resistance line to get a time target where both could be
true at the
> same time, thus increasing the probability of a reversal.
I don't know if that is the explanation but the projected
turning
points are right on the pivot bar with uncanny accuracy.
There are several problems.
1. The accuracy with which the trend lines are placed is
critical,
even if the position is off a small amount, it can throw the
projection off especially if the lines cross a large
distance from
their starting points. AB has a snap tool that lets you snap
drawn
studies to prices but I could not figure out how to make it
work for
trend lines.
2. While most of the projections are right on turning point
bars,
sometimes the turn last for only 1 bar and other times it
indicates a
major change in trend.
I have drawn several hundred square and angle CIT's (the
dual angle
ones occur much less frequently so I have limited experience
with
them) by hand and it works well enough that I want to study
it in more
detail. It seems to work on every trading instrument, market
fractal
and chart type (time, tick, volume, and range) I have tried
it on so
it must be tapping into some underlying market symmetry or
cycle.
> I have thought about how to do various study like
indicators in AFL.
> I do not have the AFL for you, but If I were to try to do
these two, I
> would approach it with using a ZigZag indicator to find
the
> significant peaks to draw from. Then using a simple
solution of two
> linear equations to find the crossover points.
>
> The question is how many of these do you want to draw?
For researching this technique, I want to draw them all but
for
trading purposes, I only need the ones in the future.
> The latter would require a lot more smarts in
> the AFL to decide how to use the information.
It should not be too hard to analyze the data, I need to
calculate all
the CIT points; catalog all the pivot point, even the very
smallest;
and correlate them. Then see if there is some (hopefully
obvious) way
of filtering out most of the less important ones.
> However, you could also just use the support and
resistance lines from
> different methods and add together all the probabilities
of a reversal
> of each. That would automatically increase the
probability as the
> price approached two or more lines that are converging.
That does not seem to work. Frequently more that 1 set of
reversal
lines cross at the same CIT point, unfortunately, that does
not make
the point any more significant, i.e., it is no more likely
to be a
major pivot than any other point.
> Understanding the underlying principles can lead to
simpler solutions.
Agreed, that is one reason I want to study it.
Bill
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