|
PureBytes Links
Trading Reference Links
|
TQuinn211@xxxxxxx wrote:
> In regards to your post and comments on the x-bar concept:
>
> A few points of clarity might be in order.
>
> It is not the close that establishes the three point rule but the "my price"
> plot which is the average of the open, high,low and close. This might change
> some of your colored bars, and actually give you an earlier signal.
I have posted the chart again using "my price" as the trigger. The
trigger price is an input so it is easy to try different options.
>
> >From the rest of your post it is apparent there may be some confusion as to
> the primary intent of the of the X-bar indicator, and I may have been the
> cause of that confusion.
>
> When I first posted the indicators I mentioned that they contained the
> foundation to create a system- I did not mean to infer that it was a complete
> system in itself.
No problem - I never took it that way. I looked into it further because
the approach fitted the style I have developed myself. I like to do
paint bars because it makes it easy apply them to a range of markets and
get visual feedback quickly and easily. It is also good to generate some
discussion.
>
> It has been my experience that using the same indicator to identify trend and
> act as the set up for a trade usually don't work that well.
I agree. I use these kind of things to highlight the potential for a
change in trend. Trade entry for the the first trade in what may turn
out to be the new trend is another matter. we dot not know what will
happen next. What they do provide is a warning that is objective. As has
been discussed before it is what happens next that really matters. With
methods like this you do not need to analyse or get confused about
whether is a H&S top or is it really an expanding wedge ? etc etc. It
helps to focus on the fact that there has been weakness below the high (
in the case of a potential top), then we can plan the step using the
rules/instincts that we have developed around our personal approach.
By the way Di Napoli covers in his book that DMAs are a trend indicator.
He also has directional patterns and direction overrules trend in his
personal appproach - assuming he follows the concepts in the book.
Someone more experienced in applying his methods might like to comment
on how that could have been applied in the Oct 97 S&P type setup.
>
> So when I pointed out indicator said to go long, the trade entry criteria was
> not discussed, because it could and would differ based upon ensuing price
> action.
Absolutely agree with the ensuing price action style. I will repost an
earlier post on this topic.
I use more than one set of rules to initiate a trade. (BTW This is
> the typical weakness to most mechanical systems. Only one trade entry rule.)
Thanks for covering that. Guess you are saving that for the book :)
Requires more thought when developing an approach but that is what I
found also and proves once again the wisdom from the more experienced
system traders who have said much the same. No easy answers until you
find them after a lot of digging around, some would say after a lot of
shovelling shi. :)
>
> Close out position rules would differ as well and as you pointed out, were not
> discussed.
>
> Trust this helps and does not make the waters any muddier.
>
> All the best,
>
> Terry
>
> RE: Displaced Moving averages: I would never consider using DMA as a trend
> indicator but they might have some limited use/benefit to initiate a trade.
Why would you never consider using a DMA as a trend indicator - even
with your band concept ?
> Some elliott people use them to enter counter trend trades as part of a fifth
> wave reversal strategy, but only in the 5th wave. Since I don't pretend to be
> an elloitt expert that is about all I can say.
Perhaps someone who does could comment further.
Better go now as my wife is quite rightly on back to go for
breakfast(yes!) and look at furniture (what fun).
Regards,
Chris
Attachment Converted: "c:\eudora\attach\S&PXBar1.gif"
Attachment Converted: "c:\eudora\attach\Cjxbar.ela"
|