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"Would you be willing to express SMI and TSI forumulae in English, for
me...so I can get a better grasp of what the functions are going to do?"
Michael,
I was publicly educated in the Detroit school system and English isn't
something I have a handle on. I completed my undergraduate degree 30 years
after high school graduation and almost didn't accomplish the feat because
of 200 and 300 level statistics' classes. I have included a reference to
the articles that the formulae were taken from. Applying the formulae to a
couple of thousand charts, should satisfy your curiosity. My "opinion"
about "what the functions are going to do" is totally worthless. They are
in constant motion (the math is a mystery to me).
I wish I had some specific, spiffy reply that would answer your question.
Ten people could read the articles and come away with ten different ideas
on how to use these indicators. I guess my best "guess", at what they do,
is to say that they identify momentum in the markets and tend to signal
market turns. I don't really believe you have to understand the math
behind the indicator (many would disagree). I start my car and turn on the
lights and don't really have a clue about the principles behind gas engines
and electricity.
I'm not being cute, I'm just not very bright. I offer the formulae in good
faith, hoping that smarter folks might improve, modify, and alert me to
modifications that work for them.
The indicator guru, William Blau, says of the SMI: "Double smoothing of
both numerator and denominator of the original formula of %K of the
stochastic indicator aids in obtaining low-lag smoooth-contoured indicator
curves. In lieu of single parameter to specify the stochastic, the
Ds-stochastic formulation provides an additional two parameters for a
double-Ema effect."
and
"The true strength index may be considered to be a cross between a relative
strength indicator and a moving average convergence/divergence indicator
with many desirable properties from each."
It's all Greek to me...they either work or I try to tweak them to make them
work. If I don't see the value, I toss them out. At one time, I used SMI,
TSI, & LRS separately, now I combine them. "Spin 'em" on a couple thousand
charts, combine them with other indicators, substitute your own numbers in
the formulae.
Hope this helps,
Steve Karnish
CCT
----------
> From: Michael Robb <mrobb@xxxxxxxxxxxxxx>
> To: metastock@xxxxxxxxxxxxx
> Subject: Re: SMI and TSI
> Date: Sunday, April 11, 1999 12:07 PM
>
> Steve:
>
> Would you be willing to express SMI and TSI forumulae in English, for
> me...so I can get a better grasp of what the functions are going to do?
>
> Thank you.
>
> M.R.
>
> -----Original Message-----
> From: Steve Karnish <kernish@xxxxxxxxxxxx>
> To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
> Date: Sunday, April 11, 1999 1:49 PM
> Subject: Re: CMO & Cocoa
>
>
> >Lionel,
> >
> >Stochastic Momentum Indicator:
> >
> >{Appeared in the January 93 issue of Stocks & Commodities magazine}
> >
> >100 * ( Mov( Mov(C - (.5 * ( HHV(H,13) + LLV(L,13))),25,E),2,E) /
(.5*Mov(
> >Mov( HHV(H,13) - LLV(L,13),25,E),2,E)))
> >
> >True Strength Index:
> >
> >{Appeared in the January 93 issue of Stocks & Commodities magazine}
> >
> >100 * ( Mov( Mov( ROC(C,1,$),25,E),13,E) / Mov( Mov( Abs(
> >ROC(C,1,$)),25,E),13,E))
> >
> >I combine the above with the linear regression formula (off the
MetaStock
> >shelf). I substitute various fibonacci numbers in the formula and
weight
> >each of the three parts. I believe that every investor should decide
which
> >variables suit their markets and trading temperament. Emphasizing one
of
> >the formulas might cause the Kaleidoscope to be more sensitive to turns,
> >yet it might also make the indicator choppier. I strive for smooth, but
> >sensitive (a real 90's kind of guy).
> >
> >Steve Karnish
> >CCT
> >
> >
> >
> >----------
> >> From: Lionel and Gail Issen <lissen@xxxxxxxxxxxxxxxx>
> >> To: metastock@xxxxxxxxxxxxx
> >> Subject: Re: CMO & Cocoa
> >> Date: Sunday, April 11, 1999 5:30 AM
> >>
> >> What do y ou mean by "SMI" and "TSI".
> >>
> >> Lionel
> >>
> >> -----Original Message-----
> >> From: rudolf stricker <rst@xxxxxxxxxxx>
> >> To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
> >> Date: Sunday, April 11, 1999 7:00 AM
> >> Subject: Re: CMO & Cocoa
> >>
> >>
> >> >
> >> >Steve,
> >> >
> >> >On Sat, 10 Apr 1999 08:34:32 -0700, you wrote:
> >> >
> >> >> I use a combination of LinReg, SMI, & TSI
> >> >>(Kaleidoscope) for the most of my studies.
> >> >
> >> >Do you use those indicators in a special unique combination, or do
you
> >> >calculate them separately and combine them e.g. by a kind of "binary
> >> >waves" ?
> >> >
> >> >>As for the CMO and cocoa: one
> >> >>look at the "perfectly" structured downtrend and one can discern
that
> >the
> >> >>parameters (variable periods and trigger levels) would not produce
the
> >> same
> >> >>results if cocoa starts to trade above it's current channel.
> >> >[...]
> >> >>All one really has to do to take advantage of the cocoa downtrend
(or
> >any
> >> >>trend), is to sell against the 13 day moving average put a stop in
at
> >the
> >> >>34 day moving average. It would have resulted in a successful trade
> >the
> >> >>last 20+ times in cocoa.
> >> >
> >> >This might work for cocoa (but not for e.g. my DAX trading). BTW: Do
> >> >you have any special "insider" know-how about cocoa to get an idea,
> >> >when special trends or patterns will be active? Imo, this would be
> >> >necessary to use successfully any "special trend" model.
> >> >
> >> >> I don't buy into the
> >> >>suggestions that one must be able to back test a system for 5 years
> >with
> >> >>various samplings to validate an approach.
> >> >[...]
> >> >>The markets are dynamic. To think that a universally applied
approach
> >> >>(mechanical) would consistently work on a commodity or many
commodities
> >> is
> >> >>not a very good premise to trade by.
> >> >
> >> >This is ok for me, especially, if you have special know-how about the
> >> >market under consideration to understand & identify the reasons for
> >> >special trends to be active.
> >> >
> >> >But because I don't have any special knowledge about the market
> >> >mechanisms for any special products, I concentrate on the most
general
> >> >"product" , i.e. the DAX, and I try to anticipate its option prices
> >> >based on historical data of the DAX, its sentiments, and some
> >> >macro-economical aspects. And because I have a background in
> >> >"identification & re-use of know-how, based on example", I'm quite
> >> >successful up to now.
> >> >
> >> >>Nothing last forever, but in the meantime, until cocoa demonstrates
> >that
> >> it
> >> >>wants to trade out of it's channel, I will continue to take the
signals
> >> >>that this little secular system provides.
> >> >
> >> >Do you know about any other products around, that have strong trends
> >> >on a regular basis like cocoa and about the reasons for this
behavior?
> >> >
> >> >Happy & successful trades!
> >> >mfg rudolf stricker
> >> >| Disclaimer: The views of this user are strictly his own.
> >
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