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Decimation is a term that specifies the number of bars that are
used to make up one bar during analysis.
If we say the decimation rate is two then the bars that are
analyzed are each composed of the highest high of two adjacent
bars, the lowest low of the two adjacent bars, the open is
the open of the first bar and the close is the close of the
second bar.
This concept can be extended to any number of bars desired.
If we specify 3 as the decimation/compression factor then the
high of each bar analyzed is the highest high of the current and
the past two bars, the low is the lowest low of the three bars
under consideration and the open is the open of the first of the
three bars and the close is the close of the last bar.
See the following example:
Three Decimated
Bars Bar for
Analysis
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Now what I do is to roll along and do this to every bar and
store the "decimated" bars in another array and run the analysis
on this set of data.
This amounts to a smoothing operation of sorts BUT it quickly
adjusts when direction changes.
Clyde Lee
Earl Adamy wrote:
>
> Number of swings and percentage profit or loss make sense but I guess I
> don't understand what decimation rate is measuring?
>
> Earl
>
> ----- Original Message -----
> From: Clyde Lee <clydelee@xxxxxxx>
> To: swingmachine <swingmachine@xxxxxxxxxxx>; realtraders list
> <realtraders@xxxxxxxxxxxx>
> Sent: Wednesday, August 25, 1999 8:51 PM
> Subject: A Look At Decimation
>
> >
> > Following these letters are three sets of numbers x/yyy/zzz.z
> >
> > which represent:
> > x = decimation rate (i.e. 1,2,3,4,.....)
> > yyy = number of swings detected in this run
> > zzz.z= net profit or -=loss in PERCENTAGE of symbol price.
> >
> > Examine the four charts attached and you should have no
> > difficulty in determining what decimation rate will work
> > best with the OEX-60 minute bars.
> >
> > Given that information then what the most likely scenario
> > for tomorrow should be very clear.
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Clyde Lee Chairman/CEO (Home of SwingMachine)
SYTECH Corporation email: <clydelee@xxxxxxx>
7910 Westglen, Suite 105 Work: (713) 783-9540
Houston, TX 77063 Fax: (713) 783-1092
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