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1998 January Tasc - Breaking out of Price Channels - VIDYA Article
Breaking out of Price Channels, by Gerald Marisch,"Technical Analysis of
Stocks & Commodities", January 1998, page 93.
"Here's a technique based upon Tushar Chande's variable-length moving
average. The indicator is more responsive to market price movements than a
conventional simple or exponential moving average, and can be used for
position trading."
The following formula will match the authors slight modification to the
variable moving average:
VIDYA 21,5 Indicator
Length:=Input("Length",1,200,21);
Smooth:=Input("Smoothing",1,200,5);
AbsCMO:=(Abs(CMO(C,Length)))/100;
SC:=2/(Smooth+1);
VIDYA:=If(Cum(1)<=(Length+1),C,(SC*AbsCMO*CLOSE)+(1-(SC*AbsCMO))*PREV);
VIDYA
The following Expert highlights will show you when the price has undergone
trend changes as discussed in the article. Enter each section as a separate
highlight in an Expert Advisor. To do this, create a new Expert and select
Highlights from the tab dialog. Then select New and name it Bull. Paste
the Bull trend formula into the condition box within the editor and set the
color to green. Do this for the Bear and the Pause conditions as well,
selecting the matching colors, Attach this Expert to your chart and if the
conditions are met, the price bars will be displayed in the proper colors.
Green Bars (Bull trend):
Length:=21;
Smooth:=5;
AbsCMO:=(Abs(CMO(C,Length)))/100;
SC:=2/(Smooth+1);
VIDYA:=If(Cum(1)<=(Length+1),C,(SC*AbsCMO*CLOSE)+(1-(SC*AbsCMO))*PREV);
C>(Vidya*1.01)
Red Bars (Bear trend):
Length:=21;
Smooth:=5;
AbsCMO:=(Abs(CMO(C,Length)))/100;
SC:=2/(Smooth+1);
VIDYA:=If(Cum(1)<=(Length+1),C,(SC*AbsCMO*CLOSE)+(1-(SC*AbsCMO))*PREV);
C<(VIDYA*.99)
Yellow Bars( Pause or pending reversal of the trend):
Length:=21;
Smooth:=5;
AbsCMO:=(Abs(CMO(C,Length)))/100;
SC:=2/(Smooth+1);
VIDYA:=If(Cum(1)<=(Length+1),C,(SC*AbsCMO*CLOSE)+(1-(SC*AbsCMO))*PREV);
C>(VIDYA*.99) AND C<(VIDYA*1.01)
Richard Estes
-----Original Message-----
From: Robert Acker <reajr5@xxxxxxx>
To: metastock-list@xxxxxxxxxxxxx <metastock-list@xxxxxxxxxxxxx>
Date: Thursday, February 12, 1998 4:20 PM
Subject: Re: Vidya Breakout System
>Where can I find the Vidya indicator ? It doesn't seem to be in my 6.5
>program .
>Also does anyone have a recent Stocks & Commodities CD of back issues
>for sale ?
>
>Metastock : It would be nice to have individual indictors on your web site
>that can
> be downloaded quickly like Omega Research does ,but
>with an
> explanation as to how to use then so there's no need
for
>back issues
> of Stocks and Commodities .
>
>
>
>
>
>
>Harvey Pearce wrote:
>
>> With the recent attention to Vidya, some may be interested in a system
>> which was published in TAS&C October 1995, vol.13 p.418 "Identifying
>> Powerful Breakouts Early" by Tuschar Chande.
>>
>> 1. Plot a 12-day Vidya of the close.
>>
>> 2. Plot 1% bands one either side of the Vidya line. This is a quickie
>> custom indicator in MS6.5, and can be used in other applications.
>> % Bands:
>> Pcnt:=Input("Enter percentage",0.1,10,1);
>> P*(1+(Pcnt/100));
>> P*(1-(Pcnt/100))
>> Drag them to the Vidya line until it is highlighted.
>>
>> 3. Set up a Dynamic Momentum Index (DMI) of the close in an inner
>> window.
>>
>> 4. Set up a 14-period RSI of the close in another inner window; use a
>> contrasting colour to the DMI.
>>
>> 5. Drag the RSI to the same inner window as the DMI and have horizontal
>> lines at 30, 50 and 70. Close the empty inner window.
>>
>> 6. Briefly, the rules call for going long when the close is above the
>> +1% line and DMI > 70; short below the -1% line and DMI < 30. Exit when
>> the close crosses the Vidya or on a stop. For details refer to the
>> article. Or use your own logic.
>>
>> 7. My preference is for a dotted Vidya line and solid 1% lines, plus 2%
>> lines in a pale colour. The trend of the DMI/RSI combo and divergence
>> between them and price seem to be helpful. Some futures and stocks
>> require greater or lesser percentage lines, which are easily changed on
>> the fly by right-clicking.
>>
>> Harvey Pearce, Victoria, B.C., Canada
>
>
>
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