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This sounds a lot like the methodology of the Commodex service. They
calculate a daily index
from -10 to +10 based on five criteria: 1) fast moving average; 2) slow
moving average;
3) fast moving average above/below slow moving average; 4) volume; 5) open
interest.
The last 10 days' index are summed to give a trend value from -100 to +100.
Trading rules
are then created off the daily index and trend index.
See www.commodex.com If you sign up for a free 5 day trial they will send
you an explanation
of the rules (but not the formulas). I have no affiliation, just tried the
trial subscription and played
around with it a little.
Its an interesting system from a couple of points: 1) it uses open
interest; 2) it uses volume,
3) it treats each contract month indivually rather than using continuous
contracts; 4) it treats
commodities and index futures the same.
----- Original Message -----
From: <jvc689@xxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Cc: <Dom2000@xxxxxxxxxxx>
Sent: Sunday, September 14, 2003 6:59 PM
Subject: [RT] Trading Methodology
> Dear Dom,
>
> Obviously a single day action does not necessarily indicate a trend. What
> I am working on is developing a Daily Index ranging from + 100 to - 100. +
> 100 would be strong long side accumulation and - 100 would be strong
> downside distribution.
>
> I am hoping to then come up with an oscillator to assess the strength of
> the Daily Index.
>
> I am in the early stages of it so I am not expecting miracles...yet. It is
> a work in process.
>
> Just looking for feedback as to whether anyone has gone this route and
> their results.
>
> Sincerely,
>
> John
>
> > Are they daily or averages? It's quite possible to get a reversal
> > reading one day then the continuation of a trend the next.
> >
> > Dominick
> >
> >
> >
> >
> >
> > --- In realtraders@xxxxxxxxxxxxxxx, <jvc689@xxxx> wrote:
> >>
> >> I am currently studying the following for commodity trading validity:
> >>
> >> 1. Price up, Volume up, Open interest up: Continued uptrend based
> > upon new
> >> buying.
> >>
> >> 2. Price up, Volume down, Open interest down: Possible dip or
> > reversal of
> >> uptrend based upon liquidation of long positions.
> >>
> >> 3. Price down, Volume up, Open interest up: Continue downtrend based
> > upon
> >> new selling.
> >>
> >> 4. Price down, Volume down, Open interest down: Possible rally or
> > reversal
> >> of downtrend based upon liquidation of short positions.
> >>
> >> Any feedback welcome since nuances of this work well with many stocks
> >> I have ridden.
> >>
> >> Sincerely,
> >>
> >> John
> >
> >
> >
> > To unsubscribe from this group, send an email to:
> > realtraders-unsubscribe@xxxxxxxxxxxxxxx
> >
> >
> >
> > Your use of Yahoo! Groups is subject to
> > http://docs.yahoo.com/info/terms/
>
>
>
>
>
> To unsubscribe from this group, send an email to:
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>
>
>
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>
>
>
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