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Hi Howard,
>>Angle! When someone is talking about chart analysis and uses the
word angle, my antenna vibrates.<<
That is a very good point and I am glad you brought it up. There are
no fixed angles with these technique like there are with Gann angles.
It is a geometrical construction using Support/Resistance lines
(a.k.a. trendlines) and where they cross in the future is a CIT point.
To check what would happen with a stock split, I used PlotOHLC to plot
half the price (2 for 1 split) and the 'split' chart gives exactly the
same results as the original chart so it passes your stock split test.
In addition, having your eyes fooled by 'angles' on a chart (e.g.,
slope of a trend indicating market pace) can be a problem when trading
real time.
As prices scroll horizontally, most charting software will
automatically adjust the price scale to keep all prices on the screen.
That changes the price/time ratio and changes the perceived angle of
prices and indicators.
There are several ways traders deal with this problem.
1. Use a fixed vertical price range and move it up/down as prices
scroll. I don't like this solution but I am sure followers of Gann
relish it.
2. Use multiple moving averages to gauge the strength of the trend,
i.e., the smaller the MA that contains the trend, the steeper the
trend. I don't like this technique because there is too much clutter
on the chart.
3. I use Standard Error Bands.
Bill
--- In amibroker@xxxxxxxxxxxxxxx, "Howard B" <howardbandy@xxx> wrote:
>
> Greetings all --
>
> Angle! When someone is talking about chart analysis and uses the word
> angle, my antenna vibrates.
>
> One of the important premises of technical analysis is that every
indicator
> used should be the same before and after stock splits. An angle is a
> comparison of a horizontal distance with a vertical distance. On most
> charts, the horizontal distance is time, the vertical distance is
price. Be
> wary of any calculation of dollars per day and check to be certain
that the
> values of the indicators do not change as the stock splits.
>
> Thanks,
> Howard
>
>
> On Sun, Jun 29, 2008 at 10:15 AM, Dennis Brown <see3d@xxx> wrote:
>
> > Bill,
> >
> > Yes, my eyes fooled me on the .png. I thought the bar two to the
> > right was lower making it the pivot bar.
> >
> > I did try it on longer timeframes also and did not get anything I
> > could see using at this point.
> > However, you did not ask me if I thought the method would work, just
> > about drawing lines, so I will refrain from further comment on that
> > subject.
> >
> > Best regards,
> > Dennis
> >
> >
> > On Jun 29, 2008, at 11:12 AM, bilbo0211 wrote:
> >
> > > Hi Dennis,
> > >
> > >> First of all the right hand (starting) example you posted did not
> > >> look
> > > to be drawn from the correct lower right hand point. <
> > >
> > > Your assuming there is a correct set of pivots to use, that is
not the
> > > case. Every triad of pivots is correct ( i.e., 2 pivot lows with the
> > > intervening high and vice versa) in the sense that they can point to
> > > significant pivot points; however, they don't all lead to
significant
> > > reversal points.
> > > There are a lot of them (also remember some CIT points are
pointed to
> > > by more than 1 triangle) which is why I need to do a detailed
analysis
> > > to see how useful they can be. Duffy says significant pivot
points and
> > > trend lines that touch more than 2 pivots yield better results but I
> > > cannot confirm that (yet).
> > >
> > >> I took a one minute ES chart and plotted as many as I could for the
> > > last couple of days. I found just one that hit a CIT bar. I would
> > > not bet a dime on these odds.<
> > >
> > > Not really a good choice. If you recall, I mentioned that some times
> > > the reversal only lasts for as little as 1 bar. A 1 bar (or few)
> > > reversal on a 1 minute chart is not likely to be significant;
however,
> > > trading off 10 minute bar CIT points on a 1 minute chart could work
> > > out. Also remember that the precision with which the lines are drawn
> > > is critical.
> > >
> > > Wavemechanic is right on target when he says this is not a trading
> > > method, it is just another trading tool to be used in
combination with
> > > others.
> > >
> > > Wavemechanic also referred to Reversal Magic in his post and it does
> > > appear to be partly based on the square and angle construction in
> > > Duffy's book.
> > >
> > > The RM vendor posted some projected Forex currency hourly CIT points
> > > in this forum message thread:
> > >
> > >
> >
http://www.forex-tsd.com/suggestions-trading-systems/4252-reversal-magic-trading-system-4.html#post194232
> > >
> > > In the specific post that link points to, he demonstrates how you
> > > could have traded traded NZD/USD on 2/29/08. The results were 7
> > > trades, 4 wins, 3 losses, 131 pips profit (over $1000 per lot
traded,
> > > I don't know the exact NZD/USD conversion rate, he also is likely to
> > > have chosen this day because of the good results).
> > >
> > > This is an interesting post because ot gives some insight into
how you
> > > can interpret the CIT points for trading purposes.
> > >
> > > Bill
> > >
> > >
> > > --- In amibroker@xxxxxxxxxxxxxxx <amibroker%40yahoogroups.com>,
Dennis
> > Brown <see3d@> wrote:
> > >>
> > >> Hi Bill,
> > >>
> > >> You are right I did not understand that you were only talking about
> > >> time axis.
> > >>
> > >> I have no theory that says it is a study with an edge. I can only
> > >> come up with why you might be fooled into thinking it is.
> > >>
> > >> First of all the right hand (starting) example you posted did not
> > >> look
> > >> to be drawn from the correct lower right hand point. These are
daily
> > >> bars (I usually work in minute bars), but if you mark every bar
that
> > >> could be considered a CIT bar, you will find that there are a
lot of
> > >> them. If you plot every possible 3 point setup, you will also find
> > >> that there are a lot of them, of which you only picked 3. Now
if you
> > >> look at the probabilities of pointing to a CIT bar, you might find
> > >> that any random selection has about a 25% chance of hitting one
> > >> (eyeball guess). The eye/brain has the wonderful capacity to filter
> > >> out all the choices that don't fit the desired pattern.
> > >>
> > >> I took a one minute ES chart and plotted as many as I could for the
> > >> last couple of days. I found just one that hit a CIT bar. I would
> > >> not bet a dime on these odds.
> > >>
> > >> The theory I previously outlined to you has some logic to it,
and it
> > >> does have a statistical bias based on human behavior.
> > >>
> > >> However, I encourage you to test it out for your self. There may be
> > >> something I am missing.
> > >> No need for an AFL, just hand draw 20, then pick what price you
would
> > >> propose buying (like the open) and selling (like the close 2 or 3
> > >> bars
> > >> later) at and see how it works. Fill out every case, without seeing
> > >> into the future where they cross and then see how many are
right. If
> > >> you can not get about 75% right, you will have a hard time making
> > >> money with this setup.
> > >>
> > >> Best regards,
> > >> Dennis
> > >>
> > >> On Jun 28, 2008, at 10:21 PM, bilbo0211 wrote:
> > >>
> > >>> Hi Dennis,
> > >>>
> > >>> I think you missed the point of the CIT indicators. This is
> > >>> strictly a
> > >>> time based indicator it is not a S/R point. It points to a
specific
> > >>> bar on which the trend should change direction.
> > >>>
> > >>> The point where the 'trend' lines cross is usually not very
close to
> > >>> the price. It usually points to the exact bar where price changes
> > >>> trend.
> > >>>
> > >>> That is why I said "it must be tapping into some underlying market
> > >>> symmetry or cycle".
> > >>>
> > >>> Look at the 3 examples drawn on the current NDX daily chart
pointing
> > >>> exactly to 3 pivot high bars (black lines) on the file I just
posted
> > >>> in the files section (changeInTrend1.png).
> > >>>
> > >>> Bill
> > >>>
> > >>>
> > >>> ------------------------------------
> > >>>
> > >>> Please note that this group is for discussion between users only.
> > >>>
> > >>> To get support from AmiBroker please send an e-mail directly to
> > >>> SUPPORT {at} amibroker.com
> > >>>
> > >>> For NEW RELEASE ANNOUNCEMENTS and other news always check DEVLOG:
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> > >>>
> > >>> For other support material please check also:
> > >>> http://www.amibroker.com/support.html
> > >>> Yahoo! Groups Links
> > >>>
> > >>>
> > >>>
> > >>
> > >
> > >
> > >
> > > ------------------------------------
> > >
> > > Please note that this group is for discussion between users only.
> > >
> > > To get support from AmiBroker please send an e-mail directly to
> > > SUPPORT {at} amibroker.com
> > >
> > > For NEW RELEASE ANNOUNCEMENTS and other news always check DEVLOG:
> > > http://www.amibroker.com/devlog/
> > >
> > > For other support material please check also:
> > > http://www.amibroker.com/support.html
> > > Yahoo! Groups Links
> > >
> > >
> > >
> >
> >
> >
>
------------------------------------
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