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VolTrader  
#1 Posted : Thursday, May 5, 2005 10:52:44 AM(UTC)
VolTrader

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I am interested is using the P&F trend indicator as part of a trading strategy. However, it is unclear from the documentation how this indicator is determined other than reference to P&F support and resistance lines. The 'workings' of these reside in a DLL and hence I have no idea whether they are 'look ahead' indicators or how they are exactly determined from a P&F chart. I have spent hours examining P&F (with same parameters as indicators) charts to try and see how these indicators are established. The best the documentation can do is give the following (for the support resistance lines) : "It (the indicator) automatically adjusts itself to changes in trends or breakouts of the current trend channels. A breakout requires the prices to move the threshold amount outside the current trend channel." Unfortunately - no detail on how the trend lines are determined and my extensive look and trying to relate PF charts to these indicators has been fruitless. Please, any hints, or better explanation or even better some code...
VolTrader  
#2 Posted : Monday, May 9, 2005 9:41:57 AM(UTC)
VolTrader

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After more testing it appears these indicators are forward looking, and are therefore totally unsuitable for using to backtest the markets. I respectfully suggest that you warn customers of this fact before they use this indicator to backtest and trade the markets. (You do warn cutomers for example that the ZigZag indicator is only for visual inspection of a security, not for backtesting.) :?
Patrick  
#3 Posted : Monday, May 9, 2005 2:03:22 PM(UTC)
Patrick

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Voltrader, I just got access to the DLL c++ code and as far as I can tell there is nothing looking forward ... Give me some time and I try to study more on Tuesday. I will also try to get the person who wrote to reply in this forum... Patrick :mrgreen:
Patrick  
#4 Posted : Tuesday, May 10, 2005 6:07:04 PM(UTC)
Patrick

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Here is the explanation from the author
Here is where the change happened" [/quote wrote:
I hope this helps Patrick
VolTrader  
#5 Posted : Wednesday, May 11, 2005 1:41:55 AM(UTC)
VolTrader

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Thanks so much for your reply Patrick. I appreciate you following up on this matter. That's much clearer now. So these indicators should not be used in backtesting, as changes in these indicators are based on future events. Maybe it could be renamed the "Crystal Ball" indicator? :)
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