Re: [Metastockusers] More Thoughts On The 4MACD Strategy

["CS" <csaxe@xxxxxxx>]

If you don't mind, could you please show your formula for 
R2?
 
rsquared() in MS is an oscillator bound between 0 and 1, and 
is the same as:
<FONT 
size=2> Pwr(Corr(Cum(1),Array,Periods,0),2);
 
Thanks,
-CS
<BLOCKQUOTE 
>
  ----- Original Message ----- 
  <DIV 
  >From: 
  <A title=kevin_barry@xxxxxxxxxxxxxx 
  href="">Kevin 
  To: <A 
  title=Metastockusers@xxxxxxxxxxxxxxx 
  href="">Metastockusers@xxxxxxxxxxxxxxx 
  
  Sent: Friday, March 14, 2003 10:04 
  AM
  Subject: [Metastockusers] More Thoughts 
  On The 4MACD Strategy
  As there has been a lot of interest recently in the 4MACD 
  strategy, I would like to share a few ideas for pepping it up a bit. This 
  is based upon my own methodology so any differences of opinion with the 
  following will be A Good Thing ;-).With any trend following 
  system, it is not a good idea to use the same signal to exit as you used 
  to enter. The idea is that you delay entry until you are reasonably sure 
  that a trend is established but exit at the first sign of trouble. 
  Therefore, I suggest that you could try exiting using, say, the ADX rather 
  than waiting for the slower MACD crossover signal. Personally, I also find 
  the ADX to be a little on the slow side so I favour using a change of 
  direction in the +DI to get me out of a long trade and a change of 
  direction in the -DI to get me out of a short trade.Although there is 
  a certain amount of trend detection inherent in the MACD crossover system, 
  the vanilla version gets you into the trade too soon and, therefore, you 
  are likely to get whipsawed quite often. I suggest the addition of a trend 
  detecting indicator which will delay your entry but put the odds of the 
  trend continuing in your favour. Different indicators are more suitable to 
  different instruments so you could experiment with using the ADX being 
  above a certain level (or just use the DI indicators which are components 
  of the ADX) and, one that I like a lot, Bollinger Band Width. When a stock 
  is in a range (just when you don't want to be getting in), the BB Width 
  reading will be low. Watch for the breakout.An even better trending 
  indicator, in my opinion, is a combination of the LR Slope and the R2. 
  Both indicators are described pretty well in the Metastock manual but, in 
  a nutshell, for a long trade, you are looking for the LR Slope to be 
  nicely positive ( >15?? )  and for a short trade, you are looking 
  for the LR Slope to be negative ( < -15?? ). In BOTH cases, you are 
  looking for a positive R2 because the R2 basically indicates how far you 
  can trust the LR Slope. So, if you are using, say, a seven period LR 
  slope, look for a nice, fat > 45?? R2 for confirmation.The 
  Linear Regression indicators will radically reduce the number of signals 
  that you will receive. This suits me fine as I would rather make fifty 
  bucks from three trades than a hundred bucks from ten trades.Anyway, I 
  hope that you will find something useful 
  here.Regards,KevinTo 
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