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Von Hef writes:
> I am reading a book written by Larry Williams and he describes an indicator
> he calls "Zero Balance". Has anyone seen this indicator written for
> MetaStock, and if so what are your thoughts on this tool? He seems to use
> this to forecast future market direction. I would like to experiment with
> this, but would rather not spend time developing the code.....unless nobody
> else has ever coded it to MetaStock.
It's mentioned in his batting .800 stuff too.
It's a simple formula, but requires "swing values", which can ONLY be
calculated in arrears. (The Zig-Zag is like this I think. Or am I mistaken
there?)
Swing values go from a high swing value to a low swing value. Assume the last
swing value was a low one, then the next swing value is the next highest high,
but it must be higher than any high over the last X and *Next* X days. In
other words, the highest high with X days on either side of it.
X is usually between 4 and 7. Since you need to know the highs of the NEXT X
days to see if the day in question was a swing value, you can only see if it
was at earliest X days ago. Similar with low.
Having said that, you get the last 8 or so swing values and label them 1->8; 8
being the most recent. Zero balance says the next swing value can be predicted
by this simple formula. I forget it exactly, but it's something like
S9 = S5 + S3 - S6. Something like that; that's not it.
I can dig it up for you if you like.
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