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Big,
Your comment was, "in bactesting it tends to ride the
declining stock down and keep taking trades that get stopped.
So, I think I need a longer term trend indicator."
Maybe you need to consider shorter and not longer term indicators.
Based on the description found here:
http://trader.online.pl/MSZ/e-w-Relative_Volatility_Index_RVI.html
The RVI is a standard deviation based RSI. Some of the more recent
work being done on the RSI indicate that there may be some benefit to
using shorter not longer time frames. Also, Baeyans wrote a wonderful
book on the RSI and had a very good explanation about the index
scaling. Basically, the only valid signals occur at 50. Wilders work
on the RSI suggested using a 14 day lookback period.
Lets also consider your MACD. In my opinion the MACD relies too
heavily on past data. The two moving averages used in its calculation
are the 12 and 26. Remember that MACD stands for moving average
convergence divergence. If you are going to use the MACD you must
understand convergence divergence.
It may be simpler for you to just use plain old moving averages. They
don't have a fancy name but they do give valid signals. In order to
find the ones that will best suit your style of trading consider how
long you are willing to hold a stock while its tanking.
Most indicators rely on the closing value. Finding an indicator that
uses the closing value and understanding how it should be correctly
used is hard enough. Throwing in volume can be beneficial IF you
understand the message it is giving you. You will need to understand
whether you have buying volume or selling volume. You must also
realize that volume may not be correctly reported.
Hope this helps,
Preston
--- In equismetastock@xxxxxxxxxxxxxxx, "Big Papa"
<denver69692002@xxx> wrote:
>
> Holy cow. Thanks, you saved me a ton. Where do I send the
> consultancy fee? I did try the ZigZag Validity, but had problems
> with the ZigZagSum where you add up 5 ZigZags. After a while, I got
> so confused, I was zigging, the stock was zagging.
>
> Ok, here goes another one:
>
> It might be a bit sophomoric, but a good start for me:
>
> Buy:
> MACD() > Mov( MACD(), 9, EXPONENTIAL) And RVI(30)>50
> Sell:
> MACD() < Mov( MACD(), 9, EXPONENTIAL) And RVI(30)<50
>
> The thing I have found in bactesting is it tends to ride the
> declining stock down and keep taking trades that get stopped.
> So, I think I need a longer term trend indicator. I was thinking a
> MA of 200 or 50, but it seems if I throw that in, it relies too
much
> on moving averages with a EMA and the MACD. Perhaps a volume based
> indicator would be best. Thoughts?
>
> Thanks,
> Big Papa
>
>
>
> --- In equismetastock@xxxxxxxxxxxxxxx, pumrysh <no_reply@> wrote:
> >
> > Big Papa,
> >
> > You optimized a peak and trough?
> >
> > Before you go any farther with this check out what metastock says
> > about peak and troughs. You will find that they are based on the
> > zigzag indicator which is dynamic. Simply means that you may have
> a
> > signal today and not tomorrow. It unrealistic to trade this as
is.
> >
> > All that being said, Spyros Raftopoulos found that if he verified
> the
> > turns he was indeed able to use the zig type indicators. The
> drawback
> > is giving up time.
> >
> > If you look in the files section you will see his indicators
under
> > Zigzag. I believe the files explains how he used them. You could
> also
> > look on the internet by googling his name and finally check with
> TASC
> > somewhere around 2002 for the articles that he wrote.
> >
> >
> > Preston
> >
> >
> >
> > --- In equismetastock@xxxxxxxxxxxxxxx, "Big Papa"
> > <denver69692002@> wrote:
> > >
> > > Have a system I have found, then optimized:
> > >
> > > Explorer:
> > > Buy-
> > > TroughBars(1,MACD(),XXX)=1
> > > AND
> > > Filter
> > > C>2 AND V>1000
> > >
> > > Sell-
> > > PeakBars(1,MACD(),XXX)=1
> > >
> > > Any idea of an additional filter to use?
> > >
> > > Thanks.
> > >
> >
>
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