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I don't think CMO is the best. Chande gives hints and examples of other
factors to use. I like the VHF version. Chande like most who write books
addresses futures rather than stocks. I think of them as two different
animals, maybe it works best with futures.
Who knows.
Richard Estes
-----Original Message-----
From: Rick Mortellra <rmjapan@xxxxxxxxxxxxx>
To: Richard Estes <restes@xxxxxxxxx>; metastock-list@xxxxxxxxxxxxx
<metastock-list@xxxxxxxxxxxxx>
Date: Wednesday, February 11, 1998 5:56 PM
Subject: Re: Multi-Period Indicators
>Hi Richard,
>
>I ranted several months back to Equis and others on the list that the MS
>implementation of VMA was botched. I based this by just eyeballing a chart
>and being puzzled by the VMA's lack of sensitivity compared to equivalent
>"slower" MAs like the EMA and SMA. Moreover, after reading the formula
>presented on p.461 of the MS6.5 manual I felt vindicated in my assumption.
>
>Fortunately, someone did the grunt work (I'm habitually lazy!) of manually
>checking the VMA indicator output and confirmed the MS6.5 implementation of
>the VMA using Chande's 9-day absCMO was dead-on. The user manual was just
in
>error.
>
>That got me thinking about why the VMA indexed to the CMO didn't deliver on
>sensitivity. The answer then hit me over the head! The absCMO is bounded
>between 0-1. Using this as the indexing factor would naturally lead to a
>less sensitive indicator. Why Chande suggests on p68 of his book that using
>any index that varies between 0-1 is appropriate has mystified me,
>especially since the other indexing examples he provides clearly aren't
>bounded.
>
>It seems to me then that using VMA indexed to standard deviation or other
>unbounded indicators is more appropriate. Any ideas as to why absCMO is
seen
>as a better choice? Is the math just evading me?
>
>regards,
>rick
>
>-----Original Message-----
>From: Richard Estes <restes@xxxxxxxxx>
>To: metastock-list@xxxxxxxxxxxxx <metastock-list@xxxxxxxxxxxxx>; George
>Stevenson <george@xxxxxxxxxxxx>
>Date: Thursday, February 12, 1998 5:52 AM
>Subject: Re: Multi-Period Indicators
>
>
>>A variable moving average where a constant is put into the exponential MA
>>formula to adjust for volatility. When the price trends it moves faster
>when
>>it ranges the MA slows down.
>>
>>Equis has told me that Chande approved the VAR MA in 6.5 for VIDYA. I
think
>>the use of VHF rather than CMO is better for stocks.
>>
>>Another MA that many seem not to notice they have is the volume adjusted
>>which works the same as VAR except it uses volume. The best way to see
what
>>MA you prefer is just load them all on same chart using same # of periods.
>>And see how they react with Price. I like to think of the distance between
>>Price and the MA as Risk. I find TimeSeries, VOL, and VariableMA511( C ,
>>periods) to be the best MAs to use.
>>
>>Richard Estes
>>
>>-----Original Message-----
>>From: George Stevenson <george@xxxxxxxxxxxx>
>>To: metastock-list@xxxxxxxxxxxxx <metastock-list@xxxxxxxxxxxxx>
>>Date: Wednesday, February 11, 1998 2:32 PM
>>Subject: Re: Multi-Period Indicators
>>
>>
>>>At 02:04 PM 2/11/98 -0600, Richard Estes wrote:
>>>>Chande's VIDYA is in place in 6.5 with the VAR MA. There are many other
>>ways
>>>>to get there, such as:
>>>
>>>I just subscribed to the list yesterday. Could you explain what VIDYA
>>means.
>>>
>>>
>>>--------------
>>>George Stevenson
>>>george@xxxxxxxxxxxx
>>>
>>
>>
>
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