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Stephen, I was merely replying to your request for a simple formula to
do what you specified.
I use a methodology that gives a trade signal on a price reversal.
If you want to build a trading system from the basic premise of a
reversal, may I suggest that you re-visit the 14 day period
and then place this condition in an environment where it will
work on 60 % of the trades. From there, you can develop the
exit requirements that will enhance the profitability of the method.
Substitute the 14 day period with a period that more accurately
reflects the "trade cycle of the type of issues you wish to trade.
When Steve Karnish posted his BB Oscillator, it was exactly
what I needed to define an environment where price was likely
to turn up. An example would be for this oscillator to be greater
than 10. Then place a filter that will suggest a continuation of
the reversal, if it is an actual reversal.
Many thanks to Steve Karnish for posting the bollinger band
oscillator formula:
((C+2*Std(C,20)-Mov(C,20,S))/(4*(Std(C,20)))*100)
An added advantage to this methodology is that it will encourage
one to be a mechanical trader (which I was not) and ease the
pressure of making a trade decision--it becomes objective rather
than subjective. Hope this helps to build your trade system.
Al Taglavore
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> From: stephen bell <sbell@xxxxxxxxxxxxx>
> To: metastock@xxxxxxxxxxxxxxxxxx
> Subject: Update for "14-bar decline"
> Date: Sunday, November 11, 2001 11:36 PM
>
> Nov 12 2001:
> See the below note. Al Taglavore kindly supplied the following code:
>
> C>=LLV(H,14)+(ATR(14))
>
> {
> "This would give you the result of a close being >= the lowest low value
> of
> the High for the past 14 days plus one average true range value for the
> 14
> day period." Al Taglavore }
>
> The code works fine, and the result goes "true=1= breakout " at the end
> of the decline. This method seems rather weak, though, since it gives
> many false signals if the market is in a whipsaw mood. The intent was
> to use the code with the MS explorer to alert us to stocks that are
> coming out of a bear decline.
>
> Any ideas to improve on Als' method would be most welcome!
> Steve Bell
>
>
>
> Date: Tue, 06 Nov 2001 09:18:43 -0700
> From: stephen bell <sbell@xxxxxxxxxxxxx>
> Subject: How to formulate downslide?
>
> I am looking for a simple formula to indicate when a closing price has
> been on a bearinsh "downslide" for, say 14 bars. It would also need to
>
> accomodate one or two bullish bars (showing some small bullish rallies)
>
> during the general downtrend. This formula could then be used as part
> of an exploration to "bottom fish", after the close fianlly breaks out
> of the down trend.
>
> Certainly, we could write a 14-part brute force formula for each of the
> 14 previous bars that would test for the close below a (falling) moving
> average. Maybe there is a better way?
>
> Thanks,
> Steve Bell, Tucson Arizona USA
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