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Hi Phil
I don't use TS and I have never used VRI.
For what it is worth, here is RMH's comments in
Relevance III's (RMH's software) manual:
"VRI is a technical trading concept based upon
the difference between the high and low, and low and high
over the last "n" days. It is basically a short term
reversal identification technique based on momentum.
The VRI is actually 2 indicators. The VRIB is used
for buying signals. The VRIS is used for sell
signals. When the difference between the H-L or
L-H is stretched, the short term momentum of the
present move is about to expire.....
The moment of stretch is reached when the indicator
approaches, touches or penetrates the zero line...
Note that both the VRIB and VRIS may anticipate
a reversal by several days.
R3 TRADING GUIDELINES
1 Determine the trend and trade.. only in the direction
of the trend. The best period will vary with each mkt. The
best range will generally be from 2-5 days.
2 A buy signal occurs when the VRIB returns from above,
to, or through zero.
3 A sell signal occurs when the VRIS returns from below,
back, or through the zero line.
My Comments
Standard oscillator trading rules. One important exception -
looking through the charts, this oscillator is so sensitive
that the normal divergence rules don't apply.
This tool will work well where there are short term cycles
operating in the mkt.
e.g. in the A$/USD, there is a short term cycle of 4 +/- 1
day at the moment. I suspect the tool will work very well.
However in a strongly trending mkt, the danger will be that
the oscillator will not fall back to zero in which case the
trader will be tempted to discard or pre-empt the tool. In
both cases, not a beneficial effect on the trader's
discipline.
regards
ray
R Barros
101/25 Market Street
Sydney NSW 2000
Australia
Voice: 612 92673470
Fax: 612 92673478
E-Mail: ramon@xxxxxxxxx
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> From: Phil <rhodes@xxxxxxxxxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Subject: VRI
> Date: Tuesday, March 31, 1998 2:30 PM
>
> A friend of mine showed me an article today out of a Fall 1992
Traders
> World Mag. The article was by R Maynard Holt and the charts showed a buy
> and sell indicator he called the Volatility/Range Index? It looked very
> good in the article, which I am sure he picked the best charts possible!
He
> said he uses a 2 to 5 day range. Does anyone know anything about this?
How
> to code for TradeStation?
> Any info would be very helpful!!
>
> Thank You,
> Phil
>
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