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You provided some good information regarding the Profitunity - PTG AO Green/Red plots. I did plot the MACD over the two histogram plots of them, and yes, they do follow the Profitunity - PTG AO plots quite well. As I said, I don't follow them by themselves. I personally like the 5 - 15 indicator, which can be found at:
http://members.cox.net/momentumtrading/Stocks&Commodities_HDArticle.doc
The 5 - 15 is also similar to the MACD, but it is a little quicker. It also gives divergence quicker than the MACD. I originally found an indicator very similar to the 5 - 15 about 15 years ago when I purchased a very simple charting program with the similar indicator in the bundle. The 5 - 15 is just the 5 day moving average minus the 15 day moving average - both are exponential. It does a respectable job of providing divergence. You can play with several averages in this way, subtracting the longer one from the shorter one to get a similar result. Also, plotted as a histogram makes it easier to read - it move above and below a zero line. Bill Williams has a similar indicator which he calls the Awesome Oscillator. He subtracts the 34 day high/low midpoint from the 5 day high/low midpoint, but it jumps too much to provide any use for me.
Jay
Previous post:
Williams AO indicator is simply a glorified MACD. Set up the AO and
plot a 9 day MACD and overlay it without a scale on top of the AO.
Surprise, Surprise, they both give buy and sell signals at the same
time. The red and green shifts in the AO are momentum changes that
can be easily read with other osc's.
You can buy systems off of infomercials on late night television sold
by a bald headed guy, that give red and green buy and sell signals.
Those are based on MACD crossovers also. Program an expert to change
the color of the highlights to red and green based on MACD crossovers
and you've got an even easier system. Yes, it works and it's
profitable. If you prefer more motivation, program the symbols with
red and green arrows at the exact point of the MACD crossover. Then
program your Explorer for finding stocks at (or near) the crossover
point.
Do simple crossover systems make money--absolutely.
Willam's balance lines are simply different moving averages with
offsets. The alligator's mouth, lips and jaw, or something like that.
Simple moving average crossovers work too, and when I studied moving
averages, they weren't called alligators. If you want to use moving
average crossovers, 73 periods and 134 periods have the optimal
efficiency in terms of making money for trend traders. However, 35
periods is good for day trading. Of course, you can use 34 if you
believe that Fibonacci discovered the true "symmetry" of the universe.
Fractals are just five bars with the middle bar higher than the other
two. I've heard another name for that pattern. I would use it but I
can't count to five and fractals sound like something that got
broken.
If you really want to understand how to use indicators that clarify
entry and exit points and have a higher hit rate than the AO AC
combination, read John Clayburg's book Four Steps to Trading Success.
You'll be changing your charts first thing in the morning.
Trading is a risky business and there's never been an indicator of
any kind that has changed that. However, astrology and cycles help,
especially chinese cycles.
http://www.fourpillars.net/finance/predic.html
This link will take you to the best chinese cycle forecasting site on
the internet. You'll be amazed at how accurate the predictions are--
and it meets the major requirement of a lot of trader's--it's free!
I've done some research combining chinese cycles with Japanese
candlesticks and it's a combination that has to be seen to be
believed. Steve Nison doesn't trade because he thinks it's too risky
and he's gone "beyond candlesticks". The problem is he never combined
chinese cycles with his candlesticks! Candlesticks without the year
of the Yin Water Goat as a sentiment indicator fall flat.
Check it out, you'll be surprised, I guarantee it.
Good luck! Yang Earth Horse has started so I've got a lot to do
finishing up my Explorer to pick out YEH stocks.
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