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I use a binary wave for somethings. But not for my complete trading
system. If you do use a BW for an entire trading system you need to be
able to contruct a rule for ranking your indicators. So lets say you
have 3 indicators A, B, and C. A your best, C your least important.
Then you need to create rules. There are 9 permutaions. 3 items of T or
F. So you have 3 squared. But 9 levels could be a pain in the butt.
Like if A, B,C are true then assign a 3
A & B true but C false assign a 2
A & C true but B false assign a 1
All other conditions assign 0
except if A,B,C false assign a -1
I think the common way is to give equao weight & add or give more weight
to soem of the indicators. The problem with too many indicators in a
binary wave is determining a reasonable measure of the indicators.
Harley Meyer
michael.arnoldi@xxxxxxxx wrote:
> has anyone in the group used binary waves successfully ?
> i am still debating whether the more indicators agree, is really of
> much
> importance as compared to one or two reliable indicators which don't
> get
> watered down by lesser reliable indicators.
>
> mike
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