[RT] Re: Gen:OEX Entropy

[wong <whs@xxxxxxxxxxxx>]

Hi All:

I've been playing with Clyde's entropy indicator - the one with the bust.

I don't understand the theory behind entropy, or how the indicator was
written.

When I look at the indicator, with 21 periods as default, I find the values
too jagged.

So I play around with some averaging, and finally I try the 5 period
weighted average of value1.

The indicator is somewhat smoother.

Please refer to the attached OEX chart.  "Entropy2" is Clyde's original
with the bust.  "Entropy3" is the modified, smoothed-out indicator.


I have no idea whether this modified indicator is good, bad or indifferent.
 ("Good" to me means there are fewer turning point signals, and the time
lag is not too great, when compared to the original.)

Any advice?



Here're the modified lines:

+ + + + + + + + +

value=(Value1+value1[1]*2+value1[2]*3+value1[3]*4+value1[4])/15;

if value>0 then
 Plot1(value,"-ent")
else
  Plot2(value,"+ent");

 Plot3(0,"0");

+ + + + + + + + +



Regards,

Wong

Attachment Converted: "f:\eudora\attach\oex - entropy.gif"