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Darrell Zang wrote:
>
> Walt....
>
> I very much appreciate your graphic exampling the different types of
> single / multiple bar profiles for short term trading.
>
> I do have a couple of questions however.
>
> (1) Several of the red bars do not appear to be expansion bars as
> described in your original post.....
>
> Ie: "Signifigantly larger than previous days".
>
> Specifically I question the red bar at the beginning (Monday) of the
> second week in August. Also September's 2nd week Tuesday and it's
> fourth week Tuesday.
>
> I am aware that some of these Expansion / Contraction days are
> automatically figured by some programs with the rough formula Day range
> > ( or < ) than previous number of days......but that doesn't seem to
> work here as the red bar is smaller than even the immediate previuos
> day. ( Same situation with the very last red bar on the chart ).
>
> Am I missing something here?
>
> Darrell Zang
Darrell,
No, your analysis is correct. :) You also rightly guessed that this
is because of the "Program" that paints the bars. In that program,
I was more concerned with bars that open and close on their extremes.
So, I track ALL bars that, as an example, have an open very near the
day's low, and a close very near the day's high.
I mentioned this bar trait along with looking for a larger bar,
because I think the tendency to reverse is much greater on bars that
are larger than the average daily range.
As far as calculating for "expansion bars" only, I usually use values
like 30-50% > than the average daily range of say 3-10 days. How
you adjust these parameters all depends on how aggressive you want
to be.
Walt Downs
CIS Trading
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