Re: Psychological Index

["Walter Lake" <wlake@xxxxxxxxx>]

Hi Glen

Thanks for posting the code. The article looked good and I appreciate your
efforts.

Best regards

Walter


----- Original Message -----
From: "Glen Wallace" <gcwallace@xxxxxxxx>
To: "MetaStock listserver" <metastock@xxxxxxxxxxxxx>
Sent: Sunday, August 06, 2000 9:59 AM
Subject: Psychological Index


| There was an overbought/oversold indicator described in the June 2000
Futures
| Magazine called the Psychological Index.  It looked sort of interesting,
so I
| wrote the MetaStock code for it:
|
| {Futures Magazine, Vol.29 No.6, June 2000, P.48}
| LookBack:= Input("Number of lookback periods", 2, 100, 12);
| UThreshold:= Input("Upper threshold (%)", 0, 100, 75);
| LThreshold:= Input("Lower threshold (%)", 0, 100, 25);
| UpDay:= If(CLOSE > Ref(CLOSE,-1), 1, 0);
| PsychIndex:= Sum(UpDay,LookBack) / LookBack * 100;
| PsychIndex; UThreshold; LThreshold
|
| The article described the standard lookback period as 12 bars with a level
of
| 75% or higher being an indication of an overbought market and 25% or lower
| being an oversold market.  Like most overbought/oversold indicators, it
will
| give poor results in a strongly trending market, but perhaps using an ADX
and
| trend direction filter, it might prove useful.
|
| On 5-minute bars in the bonds, you have to constantly adjust the
thresholds
| for an upward or downward bias, but if you increase the lookback period
and
| widen the signal levels for less frequent signals, the results were
| interesting.
|
| Regards.
| _______________________________________________
|
| System Tester code:
|
| Enter Long / Close Short
| -------------------------
| LookBack:=   opt1;
| UThreshold:= opt2;
| LThreshold:= opt3;
| UpDay:= If(CLOSE > Ref(CLOSE,-1), 1, 0);
| PsychIndex:= Sum(UpDay,LookBack) / LookBack * 100;
| PsychIndex <= LThreshold
|
| Enter Short / Close Long
| -------------------------
| LookBack:=   opt1;
| UThreshold:= opt2;
| LThreshold:= opt3;
| UpDay:= If(CLOSE > Ref(CLOSE,-1), 1, 0);
| PsychIndex:= Sum(UpDay,LookBack) / LookBack * 100;
| PsychIndex >= UThreshold
|
|