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Hi Jim,
" I am looking for a refining indicator that would act as a filter to
>pick up only the major trend changes and hence reduce whip-sawing."
You may try the ADX or ADXR. Read the MS6.5 handbook pg.435
"For the DJIA, the crossover to a down-trend occurred on
>July 23, 1998"
Somebody once told me to wait after a PDI/MDI cross untill the ADX turns up
and than place your trade in the direction of the trend. If you overlay the
ADX(14) in your template you will see that you would not have been short on
the DOW untill Aug. 3, which wasn't pretty bad....
Regards,
Frans
At 15:06 7-09-98 EDT, you wrote:
>Steve Karnish wrote: <snip ---snip>
>I've started to play with the indicators. It's been years since I sat across
>the table from Welles Wilder...but I use his indicators everyday. I just
>haven't really incorporated ADX in anything I do. I think there is something
>here...that something could be somewhat subjective.
>
>How does one teach subjective gut feelings? I look at many
>objective indicators and then have to dig deep inside to pull the trigger.
>I'm not sure that part can be defined or taught. <snip - snip>
>
>And John Hunter asked "What indicators are useful in predicting the end of a
>trend?"
>
>IMHO, Wells Wilders +DI and -DI can predict changes in trend quite well. (See
>pg 434 of MS 6.5 manual).
>
>Create a new indicator and let's call it "Directional Movement Oscillator".
>The DMO formula is as on page 434, i.e.,
>
>pdi ( 14 ) - mdi ( 14 ).
>
>Bring up the indicator over an index such as the DJIA or S&P 500, etc. Left
>click on the indicator line and right click to bring up "Properties". Insert a
>horizontal line on the indicator at a value of zero. Then change the
>Color/Style of the line to a histogram Style. If you like you can save the
>chart as a "Template".
>
>Next compare the histogram to the underlying index. You should see that the
>zero cross over points on the histogram correlate very well with the changes
>in trend of the index. For the DJIA, the crossover to a down-trend occurred on
>July 23, 1998 and has not made any attempt to suggest an up-trend is in the
>offing near term.
>
>As you might expect, using this approach for trades in a market with short
>term narrow oscillations would be disastrous.
>
>I am currently writing a System Test to test trading off the cross-overs. In
>addition, I am looking for a refining indicator that would act as a filter to
>pick up only the major trend changes and hence reduce whip-sawing. Any help or
>thoughts out there on filters (Either additional indicators or manipulation of
>the DMO itself).
>
>Special note to Jim Greening. The HMO histogram applied to RDC shows that a
>reversal in trend MAY be about to occur. More importantly is the pick-up in
>volume as RDC hit its low. The volume may have been due, in part, to the
>appearance of RDC's Chairman on CBNC recently.
>
>Jim Barone
>
>
>
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