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Ian:
Thanks for your input. The 10 day EMA of the DMO has some possibilities.
The one concern I have is the timing of trade implementation. That is, when
using the DMO alone, the trader has to wait until there is a crossover of the
zero line and then make his buy or sale trade at the open on the following
day. A three day shift 10 day EMA may put the trade execution further away
from the crossover line by as much as 5 days!!
OTOH, this delay entry/exit can work to affirm the change in trend reducing
whipsaws as you suggest.
Several other indicators, such as the MACD Binary Wave combined with the
Stochastics Oscillator (%K parameters of 10 and 3, %D = 3 simple) when used
with the Parobolic SAR (Step = 0.0200; Max = 0.200), a 50 Day SMA and tightly
drawn trend lines can also help reduce whipsaws without additional lag. When
these are combined with the Joe Ross method for money management I believe,
IMHO, the probability of profitable trades increases dramatically.
The MACD Binary Wave is simply the "square" wave of the crossover points of
the two MACD lines,e.g., If(MACD(), >, Mov(MACD(),9,E), {bullish} +1,
{bearish} -1).
I am still looking for better approaches and welcome any input from the list.
Sunday, our local Angler's Club had our annual family picnic at which we
cooked over thirty pounds of marinaded shrimp on the "barbie". Unfortunately
there was no Foster's. Just Molsens and Bud.
Good trading
Jim Barone
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