I favor compression over cross-overs. Cross over trading is not profitable (one exception: long, directional trends). If markets do encounter long trends, there are many better approaches to take advantage of the direction.
Although I favor T3's as substitutes for simple moving averages, here is a formula that you can plug your favorite MA into:
Abs(Mov(C,8,S)-Mov(C,13,S))+Abs(Mov(C,13,S)-Mov(C,21,S))
The compression is simply the distance between these moving average. I'm not even sure if I've reduced the formula to its most common level. I didn't take calculus until I was in my late forties. So, maybe someone can improve on it.
I've attached a continuous wheat chart showing the forumula dipping near zero. The formula DOES point to explosive burst to the up and down side. Unfortunately, defining direction with this aide is somewhat of an art form. But, for those of us that have monitored the "Compression Index" over the last five years, markets move directionally and with gusto....soon after approaching zero..
The superimposition of moving averages is a "screaming" signal that the market is about to move in a direction and that the direction will be powerful.
Hope this helps,
Steve
--- On Wed, 7/9/08, Umesh Malhotra <mtranscriptionist@xxxxxxxxx> wrote:
From: Umesh Malhotra <mtranscriptionist@xxxxxxxxx>
Subject: Re: [EquisMetaStock Group] Re: Triple Moving Average Crossover
To: equismetastock@xxxxxxxxxxxxxxx
Date: Wednesday, July 9, 2008, 9:28 AM
HI!!
I have been following this post regularly and an idea came to my mind about which I have a doubt.
Will this exploration also works as confluence exploration?
Please guide me, I'm new to MS programing.
thanx
umesh
----- Original Message -----
Sent: Wednesday, July 09, 2008 8:32 PM
Subject: [EquisMetaStock Group] Re: Triple Moving Average Crossover
Charles-
What I wrote is incorrect.
Your filter will return only the tickers in the state of A>B and B>C
If B>C, then A had to have just crossed above B to get to A>B and B>C
{an event}
If A>C, then B had to have just crossed C to get to A>B and B>C{an
event}
So:
(ColA>ColB
AND
ColB>ColC)
AND
(Cross(colA, ColB)
OR
Cross(colB,ColC) ;
I hope I have it right this time....
--- In equismetastock@ yahoogroups. com, "rsb_44" <rsb_44@xxx> wrote:
>
> Charles -
>
> You want both the shorter averages greater than the longest, and
you
> want to identify a cross. Preston is quite right that both crosses
> occuring on the same bar is unlikey. (Guppy abandons crosses for
the
> most part, and looks at convergence of
multiple averages. A
different
> set of issues.)
>
> Possibly the following will help:
>
> (ColA>ColB
> and
> ColB>ColC)
> And
> (Cross(ColA, ColC)
> OR
> Cross(ColB,ColC) );
>
> Ron
>
>
> --- In equismetastock@ yahoogroups. com, "cherotree1" <mass54thcob@ >
> wrote:
> >
> > Preston,
> >
> > Thank you for the reply! Of the suggestions that you mentioned, I
> > have experimented with the "cross" function and I have had
success
> > with it using 2 moving averages but I can't seem to figure out
how
> > to utilize "cross" with 3 MA's (probably related to my lack of
> > knowledge attempting to write Metastock code!). I have attempted
to
> > use "cross" in the
original formula that I have posted in my
> > original message but I keep receiving errors. Any idea of how I
> > would incorporate "cross" into my original formula?
> >
> > I have not tried your other 2 suggestions yet. I decided to
attempt
> > to tweak the formula I have been working with since I am
receiving
> > the desired results; just not WHEN the crossover occurs. Any
> > additional assistance from you is appreciated. Peace!
> >
> > Charles
> >
> > --- In equismetastock@ yahoogroups. com, pumrysh <no_reply@> wrote:
> > >
> > > Charles,
> > >
> > > I can think of several methods that you could use.
> > > Those being the cross function, barssince function, and the ref
> > >
function.
> > >
> > > One of the gurus popularizing multiple moving averages was
Daryl
> > > Guppy.
> > > An explorer based on his ideas can be found at:
> > >
> > > http://trader. online.pl/ MSZ/e-ex-
> > > Guppy_Multiple_ Moving_Average_ Exploration. html
> > >
> > >
> > > Notice that the exploration uses column D for the present value
> > and
> > > column E for yesterdays.
> > > The exploration then specifically looks for a less than zero
> value
> > > for yesterday and a greater than zero value for today. I would
> > also
> > > point out that the exploration uses oscillators but the idea is
> > still
> > > the same using moving averages.
> >
>
> > >
> > > The cross function is pretty straight forward.
> > > ColumnD: AB/CROSS
> > > Cross(Mov(CLOSE, 8,E),Mov( CLOSE,13, E));
> > >
> > > Finally there is the barssince function which will tell you how
> > many
> > > bars have elapsed since the event:
> > > ColumnD: B/Since
> > > BarsSince(Cross( Mov(CLOSE, 8,E),Mov( CLOSE,13, E)));
> > >
> > > Hope this helps,
> > >
> > > Preston
> > >
> > >
> > > --- In equismetastock@ yahoogroups. com, "cherotree1"
> <mass54thcob@ >
> > > wrote:
> > > >
> > > > I am using the following code to identify securities in which
2
> > > > shorter term
moving averages are above a longer term moving
> > average:
> > > >
> > > > Col A MOV-8: mov(c,8,e)
> > > > Col B MOV-13: mov(c,13,e)
> > > > Col C MOV-21: mov(c,21,e)
> > > >
> > > > Filter:
> > > > colA>colB AND colB>colC
> > > >
> > > >
> > > > The above code DOES give me a list of ALL securities which
meet
> > > that
> > > > criteria (including columns with the various moving averages
> > > > printed) but I was attempting to include code which will
> > identify
> > > > these securities WHEN they first meet that criteria (a
> > crossover).
> > > > Any suggestions on how I would program this into the above
> > formula
> > > > would be appreciated.
Peace!
> > > >
> > > > Charles
> > > >
> > >
> >
>
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