|
PureBytes Links
Trading Reference Links
|
David, what would have been the result if you had used the Nasdaq as the
reference instead of the S&P? At one time Worden was pushing the use of
the Nasdaq as the reference. Which index is he pushing now?
Tom
----- Original Message -----
From: "David DeFina" <ddefina@xxxxxxxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Sent: Thursday, December 28, 2000 4:00 PM
Subject: RE: TC2000 Relative Strength Moving Average
> RE: How does your testing work for the April 2000 Nasdaq drop and the
> Sept-Nov
> Nasdaq drop?
>
> Tom, I tested from September 1999 to present, and it avoided both the
March
> and September plunges almost entirely. I believe since the stocks I
tested
> were on the Nasdaq, they quickly under performed the S & P index during
the
> plunges, which caused the moving averages to cross soon after the drop
> began. It was primarily these two events this year that caused me to be
> impressed by this indicator set-up.
>
> This isn't a recent example, but I'm at the office. The top section has
the
> traditional moving averages (10 and 30 exponential) based on the stock
> price. The bottom section uses the same moving averages, but their based
on
> IBM's relative strength to the S&P 500. You can see the primary
difference
> in February - April 1999 where the stock whipsaws up and down, causing bad
> signals in the conventional moving averages. The bottom window shows the
> 10-day moving average coming and barely touching the 30-day moving
average,
> eliminating some of the noise.
>
> I've always hated moving averages because they lose all the money you made
> with them when a stock consolidates. This indicator comes closer to
solving
> that problem in my mind. It is also just as good or better at signaling
> changes in trends.
>
> I'll send current examples tomorrow.
>
> ddefina@xxxxxxxxxxxx
>
> -----Original Message-----
> From: owner-metastock@xxxxxxxxxxxxx
[mailto:owner-metastock@xxxxxxxxxxxxx]On
> Behalf Of Tom Sprunger
> Sent: Dec 28, 2000 10:35 AM
> To: metastock@xxxxxxxxxxxxx
> Subject: Re: TC2000 Relative Strength Moving Average
>
> I experimented with this and found a serious limitation in my opinion.
> Since its based upon the stock's price performance relative to an index,
it
> fails when the stock and the index are moving in the same direction at
about
> the same rate. I.E., if the Nasdaq is in free fall and the stock is
falling
> at about the same rate, this approach may show that all is o.k., when in
> reality you are losing your behind.
>
> I think it may work o.k in an exploration, but may fail applied to a
> specific portfolio that you may already have under conditions like
described
> above..
>
> How does your testing work for the April 2000 Nasdaq drop and the
Sept-Nov
> Nasdaq drop?
>
> Tom
> ----- Original Message -----
> From: "David DeFina" <ddefina@xxxxxxxxxxxx>
> To: <metastock@xxxxxxxxxxxxx>
> Sent: Thursday, December 28, 2000 10:26 AM
> Subject: TC2000 Relative Strength Moving Average
>
>
> > Anybody tried using TC2000's new moving average based on relative
strength
> > in Metastock?
> >
> > I developed a good indicator to identify trends in stocks, but TC2000's
> idea
> > of using a 10 and 30 day moving average of relative strength (vs. SP500,
> > NASDAQ, etc.), works as well or better than mine. Using moving
averages
> > based on the stocks relative strength to a broader market average
> eliminates
> > market gyrations from the equation and allows the moving averages to be
> > sensitive only to stock performance relative to the index. I programmed
> > this into Metastock by plotting a relative strength indicator in white
> > (making it invisible on white background), and created 2 moving averages
> > based on this indicator (10 and 30 exponential). When the 10-day
crosses
> > above the 30 day, this is assumed to be bullish, and you look to be
> bearish
> > when it crosses back below the 30-day line. Obviously, the two moving
> > averages can be any number, but these seem to work well.
> >
> > I tested this setup on many Nasdaq stocks by programming an expert with
my
> > indicators (not TC2000) and comparing the trend changes to mine
visually,
> > and saw that they were very similar. My system is very accurate for
> finding
> > trends, and entry points, so I'm assuming this TC2000 setup is as
> reliable.
> > I haven't found a way yet to program relative strength into a system
test,
> > so if anybody knows how I'd appreciate learning the secret. I used the
> > SP-500 as the comparison to Nasdaq stocks because it correlates well
with
> > the Nasdaq, but isn't as volatile.
> >
> > My trading system only uses the trend as one piece and several other
> > indicators for entry and exit, but I believe this indicator is as close
to
> > perfect for determining trends as you'll find.
> >
> > Dave D.
> >
>
|