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Hi Manish and <font size=2
face=Arial>Preston<font
size=2 face=Arial>,
Thank
you both for offering help with my RSI (14) Exploration problems. I have spent
the best part of today trying to move forward but I am still identifying false
positives. That is I am still identifying shares that should have crossed above
the RSI (14) 30 level within the last 5 trading days, but in fact have not been
below RSI (14) 30 during this period. I only have limited MS programming skills
but I have happily used MS for the past 5 years and I have used my own
explorations successfully for much of this time. However I would say I am a
little shaken with the problem I am currently experiencing.
Taking
each of your posts in turn, I pasted your Exploration code Manish and it ran smoothly
but did not eliminate my “false positive” problem. I am afraid I
was not able to work out the logic behind what looks to be a nice piece of
code, so I could not take it any further. Could you briefly how you exploration
works?
<font
size=2 face=Arial>Preston<font
size=2 face=Arial> I picked up
on your suggestion re validation but this has only deepened my concern. I had
previously looked upon validation as being required when there was a
possibility that there may be a logic conflict within an Exploration code. I
would have thought that Alert (Cross (RSI (14), 30), 5) was fairly unambiguous,
(in fact the ‘RSI cross 70’ is given as an “Alert”
example on Page 220 of my User Manual), but apparently not. Nevertheless I have
now used the following as an attempt to validate:
A:
=Alert (Cross (RSI (14), 30), 5);
<font size=2
face=Arial>B: =If (BarsSince (A)
<=5, 1, 0); B=1
<font size=2
face=Arial>
<font size=2
face=Arial>But this still gave
me false positives, i.e. shares that had not been below 30 within the past 5
trading days. So I ran another exploration this time using the following
filter:
<font size=2
face=Arial>
<font size=2
face=Arial>BarsSince (RSI (14)
<30) <=5 AND
<font size=2
face=Arial>BarsSince (RSI (14)>30)
<=5
<font size=2
face=Arial>
<font size=2
face=Arial>I also used my
columns A to F to record the RSI (14) values for each of the past 5 trading
days using the ‘ref’ function. To my astonishment and despair I still
captured shares whose RSI (14) value had not been below 30 during the past 5
trading days. So is my logic wrong with these attempts to validate or have I
somehow corrupted my MS software or data?
<font size=2
face=Arial>
<font size=2
face=Arial>I should add that I
definitely take your point about trading whipsaws. The reason why I am so
pedantic about wanting to capture shares only where either RSI (14) has crossed
30 or MACD () signals ‘Buy’ and desirably to have both occur within
the last few trading days is that I then want to overlay a composite template
over such selected shares, interpret the resultant graph and then act on this
interpretation. The RSI and MACD signals do not form part of the template but
are highly correlated in situations where the template signals a buy or sell
action. On a small sample of shares (5) in real life, the template has given
exceptionally good and unambiguous results. However as I cannot employ all the
parameters used in the template as an exploration or System Tester code, I am
left with having to manually test it on a larger number of potential candidate
shares before I get too carried away with its usefulness as a trading tool.
<font size=2
face=Arial>
<font size=2
face=Arial>Two final points: I
too thought that Ref -1 gave yesterday’s value and Ref -2 gave the
trading day before. But now I strongly suspect that it gives the value of the
last and second last day that a particular share or derivative traded. For
example in the first validation attempt used above, I used two of the A-F column
to record the DayOfMonth () and ref (dayofmonth (),-1) values. I fully expected
to see 24 and 23 returned respectively (25 is a public holiday in <font
size=2 face=Arial>Australia<font
size=2 face=Arial>). The
majority reflected these values but a substantial minority did not, but did appear
to reflect the last and second last days they traded. So I would welcome
clarification on the reference function. And finally I still would very much
like to filter out derivatives and retain straight stock. So if there is anyway
of filtering on the Ticker Symbol character size within Metastock, I would
greatly appreciate being told about it.
<font size=2
face=Arial>
<font size=2
face=Arial>I really am finding
this RSI (14) a difficult problem to solve and yet I know it must be that I am
doing something or some things wrongly. So any further insights from either of
you or any others on the list would be really well received here.
<font size=2
face=Arial>
<font size=2
face=Arial>Thanks again, Kevin
Howard
<font size=2
face=Arial>
<font size=2
face=Arial>
<font size=2
face=Arial>
<font size=2
face=Arial>
<font size=2
face=Arial>
<font size=2
face=Arial>
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