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Carl:
Nice little paint bar study. Something that is similar is represented in one of
Joe Ross' books: He calls them congestions or ledges. They are simple little
patterns and the techniques to trade them are quite simple as well: Identify a
narrow range congestion area and then put stop loss buy and sell orders at a
breakout of the congestion. Once filled in one direction, leave the other order
'as is' as your stop-loss. Agressive traders can also change their orders once
they enter in one direction to stop and reverse in the opposite direction if
price trades back through the congestion and breaks out in the opposite
direction [after the first 'false' breakout].
Best,
Tim Morge
Carl Soderholm wrote:
>
> Here is a simple volatility paintbar for groups discussion.
>
> ----------------------------------------------------------------------------
> ------------------------------------
>
> Input: LookBack(10), RngLimit(2);
>
> If Highest(High, LookBack) - Lowest(Low, LookBack) < RngLimit *
> Average(TrueRange,30) then begin;
> Plot1(High,"PBHigh");
> Plot2(Low,"PBLow");
> IF CheckAlert Then Alert = TRUE;
> End;
>
> ----------------------------------------------------------------------------
> -----------------------------------
>
> The ELA, a chart and some discussion on how to use the indicator is
> available at: http://www.linkshore.com/ click on Technical Indicators
> on the left side menu area.
>
> The inputs seem to work OK on most EOD charts. You will need to adjust to
> taste on intraday data.
>
> The study is intended to mark bars during periods of relatively low
> volatility.
>
> I'd be very interested in comments and improvements.
>
> Carl
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