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wabbit  
#1 Posted : Sunday, July 10, 2005 3:52:40 AM(UTC)
wabbit

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In response to questions like, "What is the best indicator...?" I have had several conversations/chats/posts/emails with persons various in the last couple of weeks. As my answer to these questions has been the same, I thought I might just post it to answer the question before it gets asked again. All indicators used in MS (and just about every other charting/TA application) are derived from 5 simple core pieces of information, OHLCV (some might like to include OI too, but I dont) It doesnt matter how complex the adaption of these simple numbers, the fact remains that all indicators, all formulas, all exploratons, all system test codes etc all rely on OHLCV data. Moving averages (adaptive or not) are based on this data, OBV is based on this data, RSI is based on this data, Bollinger Bands are based on this data, ATR is based on this data, etc etc etc... What this means is that before you (or anyone else) tries to implement some fancy, all-singing, all-dancing trading system you must understand how the system is 'interacting' with these five core data elements. Take for example, a discussion on another forum regarding Price and MA crossovers. A very smart person who realised the limitations of MS had rewritten an indicator so it worked faster in MS. The code still looked for the same thing, Price and MA crossovers, but was just presented in a slightly different way so that when combined with a number of other lines of code, MS responded faster because the number of calculations required was reduced. Can you see any differences between: C>Mov(C,20,S) and: C*20 > Cum(C)-Ref(Cum(C),-20) I will credit MG Ferreira with this really simple code that runs heaps faster in MS and is programatically really quite useful. As I had some input to the forum in which this was posted I had received email from people querying whether it was the same or not (this annoyed me - particularly when it wasn't my code in the first place! - but I wished it was because of its simple elegance!) BUT It does demonstrate the importance of fully understanding what the indicators mean, how they are derived and, finally, how they can be exploited. Every indicator has its capabilities and limitations. Before people make trading decisions based on indicators, they must take some time to really understand down what road they are sending their money. If they want to just give money away blindly - give it to me. You don't have to derive each indicator from first principles, although I have done that in many instances, but it does mean that you DO NOT blindly copy someone else's code and trade it, then complain when you lose! (Is Caveat Emptor the right Latin term? Let the buyer beware? This is also the reason I DO NOT like black box systems, and password protected indicators!) Anyway, I hope this helps someone before they make mistakes, as I had done in the past. wabbit :D
wabbit  
#2 Posted : Sunday, July 10, 2005 4:03:39 AM(UTC)
wabbit

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Quote:
C>Mov(C,20,S) and: C*20 > Cum(C)-Ref(Cum(C),-20)
Because I was asked soooo nicely (bribery does work!) , They are the same. Proof: C > Mov(C,20,S) C > Sum(C,20)/20 C*20 > Sum(C,20) C*20 > Cum(C)-Ref(Cum(C),-20) Q.E.D. wabbit :D
Jose  
#3 Posted : Sunday, July 10, 2005 8:23:10 AM(UTC)
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Quote:
C*20 > Cum(C)-Ref(Cum(C),-20)
Take care when using the Cum() function - it also accumulates errors, specially with large numbers. Wabbit, I don't have MetaStock with me now, but I would imagine that: V > Sum(V,20)/20 and V*20 > Cum(V)-Ref(Cum(V),-20) ...will give somewhat different results, if enough data & charts are investigated. jose '-) http://metastocktools.com
wabbit  
#4 Posted : Sunday, July 10, 2005 9:09:04 AM(UTC)
wabbit

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Ah Jose, my [censored]tail sipping, fishing, swimming, diving and reclining in the tropical sunshine friend.... (I am green with envy! ) :D This code, like all code has its own capabilities and limitations. You are quite right, MS may mangle the data when working with large numbers, particularly volume. The point I was trying to get across was that NO code should ever be taken on its face value, and I did think that MG's code was an elegant formula for MA comparatives (maybe not in MSFL, but in another language?) Enjoy the rest of your holiday! wabbit :D
Patrick  
#5 Posted : Monday, July 11, 2005 5:35:06 PM(UTC)
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Let me just post this again [quote=yeah I will call it {your name here}'s plug in and sell it for gold" Creating your own plug-in ( We are really talking about creating your own system Wink ), will actually make you study it as you develop it. As you are testing it, you will learn how it reacts to different markets, to different trends. As you find its short comings you will learn its personnality and train yourself to recognize these red flags. I could talk about the virtues of creating your own system for quite a while but that will be for another day. The real point of this message is to say that training is the best thing you can get and since this forum aspires to be the best thing we can give MetaStock user's I have created a training section. Unfortunately you have to be registered to see this section of the forum ( As always it is free, Have I ever charged you for anything? Smile ). The only reason I hide it is so that people don't just hot link to it from their website. And also because I like to see new members register everyday Very Happy I will let you know my war plan for training in a few days ... Have fun in the forum. Patrick[/quote
Jose  
#6 Posted : Tuesday, September 27, 2005 12:47:53 AM(UTC)
Jose

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This thread is getting shorter by the minute... :shock: jose '-)
SHARAD  
#7 Posted : Wednesday, February 27, 2008 7:41:09 AM(UTC)
SHARAD

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DEAR SIR,

READ YOUR FORMULA

C*20 > Cum(C)-Ref(Cum(C),-20)

AND FOUND IT USEFULL BUT IF I WANT TO PUT IN YOUR FORMULA IN THE EXPLORER ,THEN IT DOES NOT ACCEPT C*20>,

CAN YOU KINDLY TELL ME THE FORMULA WHICH I CAN SUCCESFULLY PUT INTO THE EXPLORER AND FIND BULLISH/BEARISH FUTURES.ALSO I IMAGINE THAT I THIS CASE THE MORE POSITIVE THE READING,THE BULLISH THE SHARE AND VICA VERSA.PLEASE CORRECT ME IF I AM WRONG.

REGARDS,

SHARAD

bavit07  
#8 Posted : Tuesday, November 25, 2008 1:51:10 PM(UTC)
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thank
eddie.m  
#9 Posted : Wednesday, March 7, 2012 10:07:38 AM(UTC)
eddie.m

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It is not the indicator that makes you win, but rather what you do with it.
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