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Neal,
I agree completely with what you have said. I think DiNapoli has done a very
nice job of bringing a limited (i.e. practical) number of reasonably robust
techniques to bear on the everyday practice of trading. There are no
guarantees with any of his (or anyone's) indicators. But he has systematized
some ways to identify relatively high probability trades, some rules for
trading the signals, and rules to keep you in the game when the
probabilities go against you.
Regarding my earlier comments about the specific versions of the MACD and
Stochastic indicators highlighted in the book, my limited comparisons did
not find any consistent advantage to the DiNapoli formulations versus more
standard configurations. Since the DiNapoli versions were more calculation
intensive (and, therefore, slower) than the MACD and Stochastic functions
built-in to my TA program, I opted to not use them. (I use ProTA Gold by
BeeSoft on the Mac).
On the other hand, variations of the MACD and Stochastics are some of my
favorite indicators.
I prefer to use a somewhat smoothed version of the MACD oscillator at two or
three different lengths. I use the different lengths which I refer to as
Fast (5,34,5), Medium (21,55,8), and Slow (21,89,35) as proxies for daily
versus weekly data (although I also do the same thing with weekly data). The
different lengths tend to show divergences consistent with different levels
of Elliot Wave patterns. For example, a clear divergence in the Fast with no
divergence in the Medium and Slow is usually associated with a 5th wave of a
larger 3rd wave. The subsequent 5th wave of the larger cycle will typically
show divergence in the Medium MACD. In a well behaved Elliot impulsive
pattern, the Slow will show similar divergent behavior for the next larger
wave.
But as you said, these are just one more persons effort at defining the
trend. DeNapoli's approaches for anticipating, entering, and exiting trades
are a reasonably practical and disciplined way of finding higher probability
trading opportunities. The idea of looking for a confluence of fib levels,
or of fib levels and objective points makes a lot of sense.
BTW, I have visited DiNapoli's web site but have never subscribed. Are you a
subscriber, and if so, do you find it worthwhile?
Regards,
Mark
----------
>From: Neal Hughes <neal@xxxxxxxxxxxxx>
>To: <realtraders@xxxxxxxxxxxxxxx>
>Subject: [RT] Re: GEN: DiNapoli indicators
>Date: Sat, May 27, 2000, 4:45 PM
>
>
> Hi Mark!
>
> A lot would depend on how you used the indicators.
>
> You probably know this, but it's worth mentioning for
> other readers who may not have read Joe's book.
>
> The DiNapoli MACD and Stochastic are not used to generate
> entry and exit signals. Instead they are used to quantify
> trend..
>
> Also, the MACD/Stoch/3X3 indicators of the NEXT HIGHER
> time-frame are used. So if you are trading a 60-minute
> chart, you use the indicators of the Daily chart. Or if
> you trade the daily chart you use the Weekly indicators.
>
> So they are used to define the "context" of your trade.
>
> The actual entry, stop-loss, and exit signals are defined
> by DLevels, the advanced Fibonacci techniques and the
> 9 predictive patterns in his book.
>
> In practice you could use any of your own preferred
> trend indicators instead of DiNapoli's MACD/Stochastic/3X3,
> as long as you've proven them to be accurate trend indicators
> in actual trading. I just prefer to use Joe's settings because
> they work!
>
> -Neal.
>
>
>
> At 12:09 AM 5/27/00 -0400, you wrote:
>>I constructed DiNapoli's versions of these indicators last year and did not
>>see any significant advantage over simpler implementations of these
>>indicators. I believe there is a slight advantage to trading with indicators
>>set to be a shade faster than the "standard" signals, but I saw very little
>>difference between the DiNapoli and standard versions.
>>
>>Mark Berg
>>
>>
>>
>>----------
>>>From: "Dennis L. Conn" <dennisconn@xxxxxxxxxxxxxxxx>
>>>To: <realtraders@xxxxxxxxxxxxxxx>
>>>Subject: [RT] GEN: DiNapoli indicators
>>>Date: Fri, May 26, 2000, 4:58 PM
>>>
>>
>>> Hi RT's,
>>>
>>> I'm looking for some enlightenment on a couple of things in Joe DiNapoli's
>>> book, "Trading with DiNapoli Levels". Since I didn't buy it from his
> website
>>> or an authorized reseller, I don't have the opportunity to get the answers
>>> from his restricted site without buying something else from him first - I'd
>>> like to know if there's enough of value in what I've already purchased
>>> before I start spending more. It sounds impressive, but then, I'm somewhat
>>> ignorant about indicators. Besides, I'm cheap, er, I mean frugal...
>>>
>>> He mentions modifying the MACD by using Bernstein's DEMA inputs of 0.213,
>>> 0.108 and 0.199. He also mentions that these exponential inputs can be
>>> simulated by "period" inputs of 8.3897, 17.5185 and 9.0503. My question is
>>> (to put it bluntly), what the hell is he talking about?? How can you input
>>> fractional values as MA periods? Apparently, I lack the understanding of
> the
>>> concept behind the DEMA to grasp what he's talking about.
>>>
>>> Likewise with his modification of the stochastic - he writes about using a
>>> modified MA and values of 8, 3 and 3 instead of the standard values, but
>>> once again, I'm stumped as to what this modified MA value is to be. Again,
>>> it may be that I lack certain fundamental information to understand it.
>>>
>>> If you've read his book and grasp these ideas, and/or apply them in your
> own
>>> trading, I'd appreciate any plain English explanation you can offer.
> Perhaps
>>> I'm overlooking the obvious here, but I'm probably trying to run before I
>>> can walk - I only recently started to study indicators, so my knowledge
> base
>>> is definitely lacking. I'll welcome any help anyone can offer!
>>>
>>> Ignorantly,
>>>
>>> Dennis C.
>>>
>>>
>>>
>>
>
>
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