|
PureBytes Links
Trading Reference Links
|
It seems to me that I remember Joseph Stowell, of bond trading fame,
used this technique to determine trend. A few years back, I strained
my brain for quite some time trying to code this, and I finally
decided it was just too complex to even mess with (it's easy to do it
visually, but back then my coding skills just weren't up to it, and
they may not be up to it even today).
My recommendation would be to abandon it. There's many, much easier
ways to determine trend.
Bob Hunt
--------------------------------------------------
Dave Pape wrote:
>
> Recently, I've been looking at an idea that I read in one of my trading books.
> Unfortunately, I can't remember what book I read it in but the authors idea was to
> produce floating support/resistance lines.
> While it is easy to produce manually on a small number of charts, I am curious to
> know if it can be coded for backtesting and ease of use on numerous charts.
> Someone with more experience and resources (I'm using Supercharts 4.0) may
> have better luck with it than I have.
>
> The idea is this:
> 1. If the market is in an uptrend and todays low was higher than yesterdays,
> mark today as Day 1.
> 2. Draw a line to the left from the low of Day 1 until it hits a bar with a lower low
> and label that Day 2.
> 3. Draw another line left from the low of Day 2 until it hits another bar with a lower
> low. This would be Day 3. Draw a line to the right from the bottom of this bar into
> the future.
>
> This line becomes the Short Countbackline (a floating support line).
>
> As the next bar is formed, if the low was higher than yesterdays, a new line
> would take the place of the previous. If the next bars low was lower, not higher,
> our original line would remain. A sell signal would be produced if prices in the
> future close below our line.
> To generate a Long Countbackline (floating resistance line) he used the same
> technique as above, except higher highs are used.
|