|
PureBytes Links
Trading Reference Links
|
No doubt, it's a sound idea to use "dynamic" levels/zones for any indicator.
It can be done, I believe, in many ways. The approach based on "the
frequency of occurrence of values within a look-back period" is certainly
reasonable, although I am not sure everybody needs this degree of refinement
(dealing with the probability distributions). For my indicators I often use
Bollinger Bands to quantify a variability of an indicator when defining
the trigger levels. The bands by using the standard deviation and the mean
provide a crude (better to say, bulk), but useful estimate for either typical
levels an indicator may reach or its extremes (like 3*Stdev). It's simple,
easy to interpret, implement, and is certainly in a spirit of the idea of
"dynamic" zones.
Cheers,
Vitaly
Harvey Pearce wrote:
>
> Re: TASC, July 1997, p.42, "Dynamic Zones" by Zamansky & Stendahl.
>
> This article offers an idea for flexible buy/sell trigger levels for
> oscillators, instead of fixed values. It is based on the frequency of
> occurrence of values within a look-back period. The only code given was
> for TradeStation. Equis tell me that the calculations cannot be done in
> MetaStock.
>
> Would any mathematically literate person tell me how to implement it in
> Excel? It would be much appreciated.
>
> Harvey Pearce, Victoria, B.C., Canada.
|