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Forgot one other which is a little more "artistic". I play close attention
to a market in any time frame in which the ADX drops below 15. This signal
can often be used in conjunction with channels/flags/triangles and so would
be a little difficult to make completely systematic. When the market has
an ADX less than 15 I also watch for a market to make a false or dummy
move. I.e. it may pop up/down through res/sup just before it makes the
real move down/up. One trade which can occur occasionally is when the
ADX goes below 15 and the market is trading someway away from the 40 period
MA (say 2*Av-bar-range away) then it can set up a good "meanreversion
scalp". I.e. the market drifts nicely back to the 40MA which will have
probably gone flat by now. Fairly rare but it does happen and given the
market has lost momentum it is unlikely to whip you out horribly.
Philip
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> From: Philip Nixon <nixon@xxxxxxxxxxxxxx>
> To: Charles Wright <redeemed10@xxxxxxxxx>; omega-list@xxxxxxxxxx
> Subject: Re: congestion -- how to quantify
> Date: 10 March 1998 09:42
>
> Toby Crabel identified a couple which I have found useful. He calls them
> NR7 and IDNR4. The first meaning the narrowest days range for 7 days and
> the latter meaning an inside day in conjunction with the narrowest days
> range for 4 days. He did some good studies on the likely market reaction
to
> these breakout setups in his book "Day trading with Price Patterns and
> opening range breakout". Larry Connors wrote (and I believe still does)
> some interesting things using historical volatility setups. One of which
> involves looking for situations where the 10 Hist vol is less than 1/2 of
> the 100 day hist vol. None of the above is of course without whipsaw
> action and you need to filter the entries with a reference to other time
> frames. I like to search for signals on the dailies and then closely
> examine the hourlies and weeklies for any other clues/patterns. The
good
> things about them however is that they are all easily prgrammable.
>
> Regards
>
> Philip
>
> ----------
> > From: Charles Wright <redeemed10@xxxxxxxxx>
> > To: omega-list@xxxxxxxxxx
> > Subject: congestion -- how to quantify
> > Date: 10 March 1998 00:50
> >
> > Friends:
> >
> > Can anyone offer any insight into mathematically identifying
> > congestion, as in to set up for a breakout?
> >
> > Thanks
> >
> > Charles
> >
> >
> >
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