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I think you may be looking at this in too complex a way. The moving
averages do tell you what to do in all types of markets.
You might try using Kaufman's AMA. If you put a 20 bar on your chart
you will notice it goes flat when the prices are consolidating.
Otherwise it shows the trend. Here's the code.
Periods:=Input("Time Periods",1,1000, 5);
Direction := CLOSE - Ref(CLOSE,-periods);
Volatility := Sum(Abs(ROC(CLOSE,1,$)),periods);
ER := Abs(Direction/Volatility);
FastSC := 2/(2 + 1);
SlowSC := 2/(30 + 1);
SSC := ER * (FastSC - SlowSC) + SlowSC;
Constant := Pwr(SSC,2);
AMA:=If(Cum(1)=periods +1,Ref(C,-1)+constant*(C-Ref(C,-1)),
PREV*(1-Constant)+C*Constant);
AMA;
If you need a bit more, Roy published the B&Q indicators in his
newsletter which are the simplist methods of determining trend I have
seen and they're highly accurate. You will see that the B&Q agree with
Kaufman.
For daily moving I use 4, 9 and 18 bar. Sometimes I look at the 5, 20
and 50 but not the 200MA.
For weekly I use either 10 and 40 or 5, 15 and 40.
Put this stuff on a chart. The Kaufman is the easiest to read. If it's
flat there is no trend.
--- In Metastockusers@xxxxxxxxxxxxxxx, "K U R E K C I" <kurekci@xxxx>
wrote:
> dear superfraga,
> you are also saying that sometimes market is not trending, when you
say " divergence works best when the market isn't
> trending"
> problem is "weekly
> and daily moving averges to figure out which direction to trade in"
>
> these mov avg guys always show a direction to trade in!!!
> but infact this is not correct, sometimes you should not trade in
that direction either because market is not in a trend and divergences
should be monitored and mov avg's are just doing dump swings, or maybe
even you should not trade at all...
>
> the least swinging idicator i know is 200ma.
> what i want is an indicator like ADX of wilder to show if market is
tredin -no matter the direction thats generally obvious- or not
trending. but i wasnt satisfied with adx or vhf.. if you forget about
the indicators and look at history, it is possible to draw some
bands, when broken there is a trend, otherwise just moving based on
divergences. in tehese intervals most of the ma trend indicators would
suggest swing, or simply drift inn the way of latest market movement,
like moving in the wind without showing the real sentiment. i want an
indicator to show the market is trending or not. i even tried
bollinger bandwith, which i suppose looked better than the others but
still not sharp.
>
> i am currently schaff cycle, but when try to fit the parameters for
a time interval, they simply dont fit the other periods when tehere is
a trend. i know that you'll say no ez lunch, different strategy for
each interval, but there should be some kind of a trigger even to
switch between strategies..
>
> sorry for inconvenoence, but i am spending hours, days looking at
the chart but still couldnt find it out. though i still believe that
there should be something without any swing. is it only the support
and res. that you draw manually? :-)
>
> cheers
>
> ----- Original Message -----
> From: superfragalist
> To: Metastockusers@xxxxxxxxxxxxxxx
> Sent: Sunday, January 30, 2005 5:30 PM
> Subject: [Metastockusers] Re: RE:MACD Histogram Divergence kit
satisfaction
>
>
>
> Hey, Kurekci, you're right divergence works best when the market isn't
> trending. But I don't understand your question about not knowing how
> to find the trend. I've posted several times about how to use weekly
> and daily moving averges to figure out which direction to trade in.
>
> If you aren't sure what I was getting at, ask a few questions.
>
>
> --- In Metastockusers@xxxxxxxxxxxxxxx, "K U R E K C I" <kurekci@xxxx>
> wrote:
> > whatever the system is i would test if it suits me for some time eh?
> >
> > divergence is cool, but it doesnt work all the time, whats more i
> suppose it fails generally.
> >
> > what i found out is especially if the market is trending the
> divrgence trading fails. but if the market is not trending
> (terminology by wilder) divergence trading works.
> >
> > my problem is finding out a solid indicator to see if market is
> trending or not...
> > maybe a composite indicator i dunno...
> >
> > superfraga gave a very different angle to my problem. he said it is
> not important to catch the tred, more important is that you get on it
> at a point and not leave early..
> >
> > i have to think about it but still my life would be much easier if i
> caolu find something to see if market is treding or not. : ))
> >
> > whatever discussio we have we should preserve the friendly
> atmosphere here, right?
> >
> > cheers
> >
> >
> > ----- Original Message -----
> > From: Jay
> > To: Metastockusers@xxxxxxxxxxxxxxx
> > Sent: Sunday, January 30, 2005 12:42 PM
> > Subject: [Metastockusers] RE:MACD Histogram Divergence kit
> satisfaction
> >
> >
> > To me a complete trading system means that it is totally
> mechanical and you
> > take every entry and exit signal. I have not found any "complete"
> system
> > that works with MetaStock.
> >
> >
> >
> > However, while trying to use the MACDH system for my EOD futures
> trading I
> > have found several errors in it. Many times, it fails to generate
> signals
> > when there is in fact divergence; it generates signals when there
> is no
> > divergence; and the MACDH Exploration at times returns signals
> that are not
> > identified by the MACDH Expert. Also, the documentation is
> horribly lacking
> > and while this 'system' claims to be a MACD Histogram system,
> nowhere in any
> > of the documentation or in communication with Jose will he provide
> that
> > formula for the MACD Histogram
> >
> >
> >
> > While Jose is a MetaStock savant, he becomes a raving maniac when
> you point
> > out the errors of his system and refuses to investigate them
> claiming that
> > his MACDH is "perfect" - as is. That is, he believes it has no
> errors.
> >
> >
> >
> > If you wish to view divergence, you can plot the MACD Histogram
> (formula
> > below) and watch it for yourself. You do not need the MACDH
> software. The
> > MACD Histogram system is vastly overpriced, has many errors, and
> support is
> > very much lacking. The Walter Bressert system runs circles around
> it and is
> > much, much cheaper.
> >
> >
> >
> >
> >
> > Jim
> >
> >
> >
> > The MetaStock formula for the MACD Histogram is:
> >
> >
> >
> > ( Mov( C,12,E ) - Mov( C,26,E ) ) - Mov( ( Mov( C,12,E ) - Mov(
> > C,26,E ) ),9,E )
> >
> >
> >
> >
> >
> >
> >
> >
> > Kathay wrote:
> >
> > > this is not a complete trading
> > > system but provides great signals and you will use your
favourite
> > > money management methods to beat the market.
> >
> > Sorry for my humble question but isn't that more sensible and more
> > marketable to sell it as a complete trading systems?
> >
> >
> > Kathay
> >
> >
> >
> >
> >
> >
>
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> >
> >
> >
> >
> >
>
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