A Moving Average Trading System

[psrikant1978]

Thank you Traderji.

Very nice explanation. Will read about the indicator and post if I have any questions.

Thanks
Prashanth

The Aroon indicator helps to tackle the age-old problem for many trading systems. That is their inability to determine if a trending or trading range market is at hand. Trend-following indicators such as MACD and moving averages, tend to be whipsawed as markets enter a non-trending congestion phase. On the other hand, overbought/oversold oscillators (which work well during trading range markets) tend to overreact to price pull-backs during trending marketsthereby closing a position prematurely. The Aroon indicator attempts to remedy this by helping you determine when trend-following or overbought/oversold indicators are likely to succeed.

Aroon is a Sanskrit word meaning "dawn's early light" or the change from night to day.

The Aroon Indicator was developed by Tushar Chande. Its comprised of two plots one measuring the number of periods since the most recent x-period high (Aroon Up) and the other measuring the number of periods since the most recent x-period low (Aroon Down). The plotted value is on a "stochastic" like scale ranging from 0 to 100. So, for example, if in a time-period of 14 days a security makes a new 14-day high, the Aroon Up = 100. When the security makes a new 14-day low, the Aroon Down = 100. When the security has not made a new high for 14 days, the Aroon Up = 0 and when the security has not made a new low for 14 days, the Aroon Down = 0.

When the Aroon Up line reaches 100 it is a sign of strength. If the Aroon Up persists between 70 and 100, a new uptrend is indicated. Likewise if the Aroon Down line falls to 100, potential weakness is indicated. If the Aroon Down remains persistently between 70 and 100, a new downtrend is indicated. A strong uptrend is indicated when the Aroon Up line persistently remains between 70 and 100 while the Aroon Down line persistently remains between 0 and 30. Likewise a strong downtrend is indicated when the Aroon Down line persistently remains between 70 and 100 while the Aroon Up line persistently remains between 0 and 30.

When the Aroon Down line rises above the Aroon Up line, potential weakness is indicated and expect prices to begin trending lower. When the Aroon Up line crosses the Aroon Down line, potential strength is indicated and prices should begin to trend higher.

When the Aroon Up and Aroon Down Lines move parallel with each other then consolidation is indicated. Expect further consolidation until a directional move is indicated either by an extreme level or a crossover.

You can read more about the Aroon Indicator at:

http://www.stockcharts.com/education/IndicatorAnalysis/indic-Aroon.htm

 

[jamit_05]

This reply is in context to the much spoken about Mvg Trading system viz 3*13*39.

Could you suggest at least more than one ways to filter the noise. Often the corssovers are for a very short time. Is there a way to filter them from the real signals?

Thank you.


PS: If all these months of burning the midnight oil hasnt then this sys will definitely turn me into what i want to be... yet another notorious day trader.

 

[raghu46]

Dear All,
could anyone inform me of the totsl annual cost of getting intraday datafeed + conversion software to metastock or ascii + charting software. Also source of same. Much obliged
Raghu

 

[TATrader]

Dear All,
could anyone inform me of the totsl annual cost of getting intraday datafeed + conversion software to metastock or ascii + charting software. Also source of same. Much obliged
Raghu

Raghu,

You are posting your question in the wrong thread. If you want correct answers to your questions please post them in the correct forum/thread on Data Feeds.

 

[Inderchand]

can u help me in calculating moving avaerage?

 

[RajK]

can u help me in calculating moving avaerage?

Simple Moving Average (SMA)

A simple moving average is formed by computing the average (mean) price of a security over a specified number of periods. For example: a 5-day simple moving average is calculated by adding the closing prices for the last 5 days and dividing the total by 5.

The calculation is repeated for each price bar on the chart. The averages are then joined to form a smooth curving line - the moving average line.

For more info read the article at http://www.stockcharts.com/education/IndicatorAnalysis/indic_movingAvg.html

 

[raj69]

How to calculate the 20 DMA for 5 consecutive days in METASTOCK Expolorer ? Suppose , I have calculated the 20 DMA with explorer on data of last date 02-12-2005 & now I want to know the 20 DMA of previous dates i.e 01-12 , 30-11 , 29-11 and 28-11 all at the same time by using the explorer once( not seperately by changing date while exploring) & by getting these values in Column A,B,C,D at the same time . Any formula ?

 

[arun]

How to calculate the 20 DMA for 5 consecutive days in METASTOCK Expolorer ? Suppose , I have calculated the 20 DMA with explorer on data of last date 02-12-2005 & now I want to know the 20 DMA of previous dates i.e 01-12 , 30-11 , 29-11 and 28-11 all at the same time by using the explorer once( not seperately by changing date while exploring) & by getting these values in Column A,B,C,D at the same time . Any formula ?

Current 20 SMA of Close
mov(c,20,s)

20 SMA of Close 1 day ago
ref(mov(c,20,s),-1)

20 SMA of Close 2 days ago
ref(mov(c,20,s),-2)

20 SMA of Close 3 days ago
ref(mov(c,20,s),-3)

20 SMA of Close 4 days ago
ref(mov(c,20,s),-4)

20 SMA of Close 5 days ago
ref(mov(c,20,s),-5)

 

[raj69]

THANKS ARUN . But , I have a PROBLEM . When I used the formula ( USED 20 EMA ) in the EXPLORER , I checked the figures on the chart & I was surprised to see that the figures in the EXPLORER & those on the chart were different . I am unable to find the REASON for this as I REPEATED the procedure many times .
For Ex. TISCO(NSE) : 20 EMA in EXPLORER is 352.65 & 20 EMA on CHART is 354.35 (using last CLOSE DATED 02-12-2005)

 

[arun]

The formula I have mentioned is for SIMPLE moving average (SMA) whereas you are plotting an exponential moving average (EMA).