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For the CSSI formula, the ribbon uses a slightly different approach.
In addition to the moving averages, it makes small adjustments based
on the std deviation. Since the std dev is a probability function, the
formula can be considered loosely based on fuzzy logic since it self
adjusts a small amount due to stochastics.
As best I remember, I don't think the ribbon formula tests out any
more accurately than the moving average crossover. Lots of whipsawing
I believe.
Here's an example of fuzzy logic in a formula that picks almost every
trend out, but it needs validation. For example, it needs to be valid
only when the overall market is rising, or when a certain set of
stocks from a sector are above their moving average, or some other
trend validation tool that works for you.
Have fun with fuzzy logic.
FuzzyLogic:=(C-Mov(C,50,E))/ Stdev(C,50);
FuzzyLogicBuy:=FuzzyLogic>0
FuzzyLogicShort:=FuzzyLogic<0
If you want, I can write you some gee whiz commentary on how to
interpret the red, green and yellow boxes according to the inferences
provided by the fuzzy logic formulas. Like all inferences there is a
probability associated with the inference being valid for the specific
circumstances under which it was made.
Once the probability of success is determined, the appropriate bet
size can be calculated based on a variety of money management formulas
that optimize risk or return. Once the money management formulas are
defined, and if they are followed precisely, then the chances of
losing all betting money are minimized and the chances of making money
are maximized. Of course that assumes the probabilities were
calculated using the correct data sample that accurately describes the
behavior of selected stocks in the future.
Or maybe it corresponds to Super's Principle that anytime any thing
has been maximized or minimized, there is a very significant
probability it is broken.
Super
--- In equismetastock@xxxxxxxxxxxxxxx, "racfdba" <rnwolfe@xxx> wrote:
>
> Dear Superfrafalistic:
>
> Thanks for the prompt reply. I tried 10 ma and 50 ma and the results
> for the color of the bars matched very close, but the ribbon was much
> more accurate compared to the actual price movement.
>
> There's probably a third ma involved; one between 10 & 50.
>
> Thanks for warning me about the "wallet-whipping" and maybe making a
> fortune with CSSI. Neither will happen.
>
> Here's the description of the Expert:
>
> Trade Screen is one of 5 entry filter modules from the CSI Fuzzy Logic
> Expert System. Although originally developed as a component of a
> proprietary currency system, varied in-the-market trading over the past
> 3 years, revealed Trade Screen as having outstanding filtering synergy
> with a wide variety of trend following and breakout patterned systems.
> Guide:
> Whether using a technical or fundamental methodology to generate your
> trades -- trade with the trend as delineated by the Blue highlighted
> price bars for an uptrend and by the Red highlighted bar for downtrends.
> Hot Zones (Gray for longs and Yellow for shorts) are evaluated as
> high probability areas to enter or add to positions.
> Neither enter nor exit positions in the cross-hatched "ranging" areas.
> Exits, profit taking stops and stop loss points are suggested in the
> daily commentary page.
>
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