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Darsh,
You're welcome. Its always nice to know when someone appreciates what
you have done for them.
Before we give up on this indicator/system lets at least think about
a few things first. This indicator/system was written during a time
when it was common for everyone to share information but not as
openly as you might think. The word "proprietary" was typically used
to tell everyone that what you had been given was close but not
exactly what you had been using or designed.
Also, keep in mind that this indicator/system has been around for
awhile now and few people are using it. That alone tells me that
something is missing here. Exactly what though is what we need to
find out.
Is the indicator missing something that we need to make it more
effective or is it part of a larger system that we are not being told
about?
Lets first consider the indicator. What is it telling us? It is a
picture of both price and volume action for a period of time. Our
indicator is written to look for 3 days of action. So lets make a
change to our indicator and see if that makes any difference. Lets
change the last lines to:
{Cole Signals}
X:=Input("days to factor",1,14,3);
Buy:=UpDCnt >=X AND UpVCnt >=X;
Sell:=DnDCnt >=X AND DnVCnt >=X;
Buy; -Sell; {end}
Set at 1 and looking at a channeling stocks the indicator actually is
quite good at telling direction change.
The author was using a 3 day count. On a momentum stock and using a
setting of 3 or higher the picture is a little different. Think about
what we are seeing here. One of the biggest things that pops out to
me is volume. Volume is a fickle lady. We never know whether we are
seeing sell-off volume or buying volume. In todays market we never
know whether the day traders or investors have moved in on a stock.
Another thing that I noticed was the use of the terms "buy"
and "sell". I really think these are mislabeled and probably should
be termed signal days.
One signal that I did notice as an "extremely hot" buying opportunity
was a sell signal with my lookback periods set at 3 and a close that
was up above the previous close.
Finally, there is the issue of whether the indicator can stand alone
by itself. My answer would be that it cannot. In its use I would
include a couple of moving averages and a momentum indicator.
Think of the indicator as a road sign telling you of a change in
conditions ahead. In this case its all about volume.
Hope this helps,
Preston
--- In equismetastock@xxxxxxxxxxxxxxx, "Darshit" <darsh.goswami@xxx>
wrote:
>
> Thanx preston...
> U are wonderful...
>
> Though this is something what i didnt think about ... gives false
> entry n exit signals ,..
>
> But thanx alot for time u spend for me.
>
> Regards,..
> Darsh
>
> --- In equismetastock@xxxxxxxxxxxxxxx, pumrysh <no_reply@> wrote:
> >
> > Darshit,
> >
> > Here's your code.
> >
> > enjoy,
> >
> > Preston
> >
> >
> > In Metastock we are lucky that we already have built in
indicators
> > for rally and reaction days with and without volume. This makes
our
> > job a good bit easier than in Amibroker.
> >
> > We have already seen what a simple conversion from Amibroker to
> > Metastock can be like. Instead of using this code:
> >
> > RY:= H > Ref(H, -1) AND L >= Ref(L, -1);{Rally Day}
> > RX:= H <= Ref(H, -1) AND L < Ref(L, -1);{Reaction Day}
> > IN:= H <= Ref(H, -1) AND L >= Ref(L, -1);{Inside Day}
> > OUT:= H > Ref(H, -1) AND L < Ref(L, -1);{Outside Day}
> >
> > We are going to simplify things a bit and use this code similar
to
> > this instead:
> >
> > RY:=Rally();
> > RX:=Reaction();
> > IN:=Inside();
> > OUT:=Outside();
> >
> > Our code requires that we count rally and reaction days so we
won't
> > be using either inside or outside days. We will also be counting
> > rally and reaction days with volume. There is a bit of redundancy
> > here but inorder to stay true to the code we will count both.
> >
> > {Cole Trading System}
> > {Coded for Metastock}
> > {by Preston Umrysh at}
> > {The EquisMetastock Yahoo Group}
> >
> > {Cole Trading Definitions}
> > RY:=Rally();{upday}
> > RX:=Reaction();{downday}
> > RYVol:=RallyWithVol();{up vol}
> > RXVol:=ReactionWithVol();{down vol}
> >
> > {Cole Count Calculations}
> > UpDay:=Cum(RY);
> > DownDay:=Cum(RX);
> > UpVol:=Cum(RYVol);
> > DownVol:=Cum(RXVol);
> >
> > UpDCnt:=UpDay-ValueWhen(1,RX,UpDay);
> > DnDCnt:=DownDay-ValueWhen(1,RY,DownDay);
> > UpVCnt:=UpVol-ValueWhen(1,RXVol,UpVol);
> > DnVCnt:=DownVol-ValueWhen(1,RYVol,DownVol);
> >
> > {Cole Signals}
> > Buy:=UpDCnt >=3 AND UpVCnt >=3;
> > Sell:=DnDCnt >=3 AND DnVCnt >=3;
> > Buy; -Sell;
> > {end}
> >
> >
> >
> >
> > --- In equismetastock@xxxxxxxxxxxxxxx, "Darshit" <darsh.goswami@>
> > wrote:
> > >
> > > Dear Friends ,..
> > >
> > > I have got the AFL ( Amibroker Formulle file ) for this ,..
> > >
> > > If any senior can convert this code to Metastock format i will
be
> > > thankful...
> > >
> > > ===========================================================
> > > /* COLE.AFL v 1.00 17/10/2001
> > > /* Cole Trading Method
> > > /* Developed by Roger Cole
> > > /* From Technical Analysis of Stocks and Commodities, V8:12
(460-
> > > 463), by Alan Friedman
> > > /* Indicator developed and coded by Marek Chlopek, October 2001
> > > /* Support from Tomasz Janeczko and Amibroker Mailing List
members -
> >
> > > THANKS!!! */
> > >
> > > /*
> > >
> >
**********************************************************************
> > > **** */
> > > /* Cole Trading Method description
> > > /* A up signal is formed when a stock makes three Rally Days in
a
> > row
> > > with larger volume on each day
> > > /* A down signal is formed when a stock makes three Reaction
Days
> > in
> > > a row with larger volume on each day
> > > /* Inside and Outside Days are ignored */
> > >
> > > /*
> > >
> >
**********************************************************************
> > > **** */
> > > /* Cole Trading Method Indicator development description
> > > /* Cole Trading Method measures two independent signals: day
status
> > > (Rally, Reaction, Inside, Outside) and volume,
> > > /* therefore two independent sub-indicators have been
implemented:
> > > /* ColeDay - counts number of days in a row when Rally
(positive)
> > or
> > > Reaction (negative)
> > > /* ColeVolume - counts number of days with higher volume,
always
> > > positive */
> > >
> > > /*
> > >
> >
**********************************************************************
> > > **** */
> > > /* Cole's Trading Day Status definition */
> > > RY = H > Ref(H, -1) AND L >= Ref(L, -1); // Rally Day
> > > RX = H <= Ref(H, -1) AND L < Ref(L, -1); // Reaction Day
> > > IN = H <= Ref(H, -1) AND L >= Ref(L, -1); // Inside Day
> > > OUT = H > Ref(H, -1) AND L < Ref(L, -1); // Outside Day
> > >
> > > VolRY = Ref(V, - BarsSince(RY));
> > > VolRX = Ref(V, - BarsSince(RX));
> > > RYwithVol = RY AND V > IIf(RY, Ref(VolRY, -1), VolRY); //
Rally
> > > Day with Volume
> > > RXwithVol = RX AND V > IIf(RX, Ref(VolRX, -1), VolRX); //
> > Reaction
> > > Day with Volume
> > >
> > > /*
> > >
> >
**********************************************************************
> > > **** */
> > > /* ColeDay - counts number of Rally Days in a row (positive) or
> > > Reaction Days in a row (negative)
> > > /* When Rally ColeDay increases by 1 unless the first Rally Day
> > then
> > > ColeDay = 1
> > > /* When Reaction ColeDay decreases by 1 unless the first
Reaction
> > Day
> > > then ColeDay = -1
> > > /* When Inside Day or Outside Day then ColeDay stays unchanged
*/
> > > PeriodRY = BarsSince(NOT RY);
> > > PeriodRX = BarsSince(NOT RX);
> > > ColeDay = ValueWhen(RX OR RY, Sum(RY, PeriodRY) - Sum(RX,
> > PeriodRX));
> > >
> > > /*
> > >
> >
**********************************************************************
> > > **** */
> > > /* ColeVolume - counts number of days with higher volume,
always
> > > positive
> > > /* When volume higher than previous day volume ColeVolume
increases
> > > by 1
> > > /* When volume lower previous day volume then ColeVolume = 1
> > > /* When Inside Day or Outside Day then ColeVolume stays
unchanged */
> > > PeriodV = BarsSince(V < Ref(V, -1) AND (RX OR RY));
> > > ColeVolume = ValueWhen(RX OR RY, Sum (RX+RY, PeriodV) +1);
> > >
> > > /*
> > >
> >
**********************************************************************
> > > **** */
> > > /* Trading Signals in Cole Trading Method
> > > /* Buy Signal - when a stock makes three Rally Days in a row
with
> > > larger volume on each day
> > > /* Sell Signal - when a stock makes three Reaction Days in a
row
> > with
> > > larger volume on each day */
> > > Buy = ColeDay >= 3 AND ColeVolume >= 3;
> > > Sell = ColeDay <= -3 AND ColeVolume >= 3;
> > > Cover = Buy;
> > > Short = Sell;
> > >
> > > /*
> > >
> >
**********************************************************************
> > > **** */
> > > /* Graphic presentation in Amibroker */
> > > MaxGraph = 2;
> > > Graph0 = ColeDay;
> > > Graph1 = ColeVolume;
> > > Title = Name() + " - ColeDay = " + WriteVal(Graph0, 1.0) + ";
> > > ColeVolume = " + WriteVal(Graph1, 1.0);
> > >
> > > /*
> > >
> >
**********************************************************************
> > > **** */
> > > /* Exploration in Amibroker */
> > > Filter = 1;
> > > NumColumns = 9;
> > > Column0 = H; Column0Name = "H";
Column0Format
> > > = 1.2;
> > > Column1 = L; Column1Name = "L";
Column1Format
> > > = 1.2;
> > > Column2 = V; Column2Name = "V";
Column2Format
> > > = 1.0;
> > > Column3 = RY; Column3Name = "RY";
Column3Format
> > > = 1.0;
> > > Column4 = RX; Column4Name = "RX";
Column4Format
> > > = 1.0;
> > > Column5 = IN; Column5Name = "IN";
Column5Format
> > > = 1.0;
> > > Column6 = OUT; Column6Name = "OUT";
> > Column6Format
> > > = 1.0;
> > > Column7 = ColeDay; Column7Name = "ColeDay";
Column7Format
> > > = 1.0;
> > > Column8 = ColeVolume; Column8Name = "ColeVolume";
Column8Format
> > > = 1.0;
> > >
> > > /*
> > >
> >
**********************************************************************
> > > **** */
> > > /* END COLE Indicator Formula */
> > >
> > > ===========================================================
> > >
> > > Regards,..
> > > Darsh
> > >
> >
>
------------------------------------
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