|
PureBytes Links
Trading Reference Links
|
Thanks TA4me - good informative post.
jose '-)
http://www.metastocktools.com
--- In equismetastock@xxxxxxxxxxxxxxx, "taforme" <taforme@xxx> wrote:
>
> I see many postings about individual indicators, but few about how a
> complete trading signal is constructed using a set of indicators.
> Here are my suggestions based on EOD trading.
>
> I have found that higher probability trading signals are best
> constructed with a few indicators, each with a different
> characteristic. I prefer to use one indicator of each type: cycle
> based, volume influenced, and market breadth.
>
> Cycle. This could be a stochastic, or the cycles per Walter
> Bressert. I like to see how two of these are acting, each with a
> different look-back period, e.g. 5 and 10 bars. Even in an extended
> trend, cycles can work.
>
> Volume influenced. Chaikin volume, OBV or Twiggs volume (google for
> it) can serve this purpose.
>
> Market breadth. An advance/decline measurement or new highs vs. new
> lows will do.
>
> Once you have settled on a set of indicators, study how each of the
> indictors in the set act over time for securities you want to trade.
> Open a window with each of the indiators in an inner window and see
> how each acts over many years for the securities of interest. Get
> to know subtle characteristics of each indiator. You will want to
> spend at least several months of 2 hours per day.
>
> I tend to trade stock indices, e.g. Dow Jones, NASDAQ 100 and Russell
> 2000, on a few day swing basis. I have studied my set of indicators
> over years of price action for these. Determine what weighting you
> will give to each indicator. You also have to determine the time
> frame of interest for your trading, and tune the periods associated
> with the indicators for it. Now, you can refine your understanding
> of how/to what degree price predictive behavior can be discerned
> based on the interaction of indicators in the set. Then backtest
> and/or forward walk to confirm that the set can be profitably traded.
>
> Example. I shorted the NQ-100 (futures) just before the normal hours
> market close on
> Feb. 23, 2007 and closed the short at the close on Feb. 27, 2007.
> This was an unleverage move of about 4.5%.
>
> Why the entry?
>
> My A/D indicator had been at a relative peak and was starting to roll
> over; my volume based indicator was also moving down from a relative
> high level; my cycle indictor was also just starting to roll over
> from a high. There are several further subtle interpretations that
> influenced the trade entry.
>
> Why the exit?
>
> Normally I would have waited for a confirmation from the set,
> considered as a whole which was not present. However, with a lot of
> profit on the table and with a subtle interpretation of the
> interaction of my two cycle indictors, I was guessing that there was
> a substantial likelihood of a bounce the next day. So I exited,
> ahead of the normal exit.
>
> My trades are not all profitable. But substantially more trades make
> money and the $profit/$loss is well above 1.
>
> I have nothing to sell - no services or products. I am making this
> posting as a contribution for those who may find something of use
> from it.
------------------------ Yahoo! Groups Sponsor --------------------~-->
Transfer from your equities account.
Receive up to $1,000 from GFT. Click here to learn more.
http://us.click.yahoo.com/aZttyC/X_xQAA/cosFAA/BefplB/TM
--------------------------------------------------------------------~->
Yahoo! Groups Links
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/equismetastock/
<*> Your email settings:
Individual Email | Traditional
<*> To change settings online go to:
http://groups.yahoo.com/group/equismetastock/join
(Yahoo! ID required)
<*> To change settings via email:
mailto:equismetastock-digest@xxxxxxxxxxxxxxx
mailto:equismetastock-fullfeatured@xxxxxxxxxxxxxxx
<*> To unsubscribe from this group, send an email to:
equismetastock-unsubscribe@xxxxxxxxxxxxxxx
<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/
|