Experiments in Technical Analysis

[kkseal]

Hi kalyan

Here the requested chart with RSI,SRSI and smoothed DMI. SRSI seems the winner . What do you say.

Also enclosing a chart on how I look at DMI...


regards

Karthik

Great charts Karthik. Just what i desired. Thank you.

My great fear with regard to the SRSI & the (smoothed) DMI was that any further smoothing of the RSI (which already has Wilder's smoothing internally - part of it's construction) might obscure the divergences for which i value the indicator most. But your charts of the SRSI dispels this fear Not only are the divergences clearly there but you can even distinguish between the strong & weak ones.

The DMI has the advantage of being free of fixed cycle periods (that is the 'Dynamic' part). Also being volatility weighted, it incorporates the time element (i.e. if you consider volatility & momentum as proxies for the time element) as well. But what disappoints me about the DMI in those charts is it's failure to pick up some of the short time peaks (like it missed one of the peaks in mid-Feb).

About returning favours, Yes you can. Just keep winning, laugh all the way to the Bank .. and ... Donate a tiny part of the pickings to a genuine orphanage or old age home...

Just what i'd expect from someone like Karthikmarar

Actually, i'm already involved in a small way. There's a social organisation near my place that works for the education of underprivileged children. I help them in collecting old books and other educational material. I started off by donating some of my old books and an old computer (they don't have any resale value anyway) to one of their volunteers but gradually got sucked in myself. We have built a small library and a computer lab all from donated stuff. Our next aim is to start evening meals for the children (after their free tuition & computer classes) and also, if means permit, some health check-up facilities.
There are plenty of such organizations working at various places in India. I think each one of us can chip-in with a small bit if we want to. And it's just not charity, it also has it's reward - great inner satisfaction Try it folks.

Regards,
Kalyan.

 

[kkseal]

Hi Asish

Nice idea indeed. But can you please direct me to the post you are refering to?

Cycles... mm.. the only cycle I am comfotable with is the two wheeled one which I was riding to school...

I did not make much progress in my study of cycles... rather confusing stuff really...Kondrateiff wave, 4 year kichin wave,jugular wave, 28 day wave... phew.. leave alone Hilburt and Ehlers....

Also each stock.. or each sector at least... may show its unique cycle..

I gave up on these stuff as I did not want to give early retirement to my comb... already it has got less work..

regards

Karthik

Yes, to follow cycles with any accuracy you have to come down to the sector level at least. (I guess commodity traders have a better idea of this).
Here again govt policies may influence cycle time (like the upcycle in cement has been prematurely ended or at least thwarted by govt policies to curb inflation).

Also market cycles are unlikely to be the same for different markets and even for the same market at different times and worse, different for different time-frames (this is something Uashish has himself noted as evident from a post of his in another thread FFTs of the market or a particular stock in different time frames might confirm this).

Moreover so many nethods have come up - each with it's own jargon and discretionary elements that it's hard to figure out and only results in confusion. (Some swear by the DeMark indicators - no idea how good or bad that is ).

This also has a bearing on indicator cycle periods. For instance the 12, 26 for the MACD that's normally used may not be the best for all mkts and even for the same mkt at diff times and/or different timeframes.

Regards,
Kalyan.

 

[kkseal]

Another pt about the CMO and the ROLTA chart.

Around midway you'll find these WRBs all over the place but hardly any movement in the CMO (if anything, it's dipping). This appears contradictory at first sight, but if you watch the closing prices there is hardly any day-to-day movement in prices, just the wild intraday swings, denoting big intraday but no interday momentum (& the poor CMO with it's close-to-close construction - like most other momentum indicators *- can only pick up the interday momentum which is just not there).

But give it enough time (if mkt & stock conditions warrant so), and the interday momentum will generally catch up with it's intraday counterpart. This (and allied observations) make me wonder if a bottom-up (from lower to higher timeframe) approach isn't a better way for using the Triple Screen than the top-down approach that Elder recommends. (Off-course i'm not jumping to conclusions here).

Regards,
Kalyan.

* This is what i like about the Stochastics - it uses the High & Low , i.e. the true range, of prices over a period than just the close-to-close. An IFT while normalizing the indicator will hopefully make not just the ob/os levels but also the hooks & dips sharper & more pronounced.

 

[Gayathri]

Hi Karthik ,

I am Happy see u with such a good idea.This will be really helpful for beginners like me

Thank you,

Gayathri

 

[uasish]

kkseal,

Happy to know ur social commitment part.Soul satisfying act.

Asish

 

[Saint]

Just what i'd expect from someone like Karthikmarar

Actually, i'm already involved in a small way. There's a social organisation near my place that works for the education of underprivileged children. I help them in collecting old books and other educational material. I started off by donating some of my old books and an old computer (they don't have any resale value anyway) to one of their volunteers but gradually got sucked in myself. We have built a small library and a computer lab all from donated stuff. Our next aim is to start evening meals for the children (after their free tuition & computer classes) and also, if means permit, some health check-up facilities.
There are plenty of such organizations working at various places in India. I think each one of us can chip-in with a small bit if we want to. And it's just not charity, it also has it's reward - great inner satisfaction Try it folks.

Regards,
Kalyan.

Hi Kalyan,

Great going,my friend.......truly gratifying to read the above post.Wishing you all the best in your endeavours.

May we all try to do in whatever way we can to help our fellow brothers and sisters in need......And since we are traders and investors,may we all learn the fine art of plundering the markets,and then give away a portion to those who are in need.

Once again,Kalyan,wishing you all the best in your trading and your endeavours.......all the best!

Saint

ps:Karthik,sorry for this post,a minor distraction in this great thread.....but I couldn't help it. Keep up the great effort,and all the best,my friend.

 

[kkseal]

Thanks Uashish & Saint. Actually, it's just a small involvement and doesn't deserve such praise. To be honest didn't begin with any great noble intention (like 'social committment') either. Just don't like selling my books to 'kabadis' and didn't quite know what to do with an old P1 machine that was taking up precious space in my small 2BHK apartment - so donated (thinking at least they'd be of some use to someone). Thereafter became friends with some of the volunteers (they are the real dedicated folks who deserve all the praise) and got a little more involved. That's all there is to it. But yes, even this little involvement is 'soul satisfying' particularly when i see the children. They are so happy with so little.

Regards,
Kalyan.

P.S. : I am sure Saint Karthik wouldn't mind this little digression.

 

[karthikmarar]

Hi Kalyan,


ps:Karthik,sorry for this post,a minor distraction in this great thread.....but I couldn't help it. Keep up the great effort,and all the best,my friend.

Saint

Minor distraction..... It is a privilege to see you post in this thread, my friend. It is a pleasure to see you aroundwas wondering what happened to you ..since you stopped replying to my mails

warm regards

Karthik

 

[asnavale]

CONTINUING WITH MACD​

Hello friends,

As I was away on tour, I could not continue my posts in this thread about the MACD. I am now continuing the same now.

In my earlier post I had described the MA lag and methods of removing the lag. One way to remove the lag is taking two MAs with periods in the ratio 1 to 2 as described earlier. Another method is to take the MA for a period p and then taking the MA of this MA itself for the same period. The first calculation of MA introduces a lag of p/2. The second calculation (MA of MA) introduces additional lag of p/2. Therefore the difference between the MA and MA of MA results in a lag of p/2. So if we add this difference to the first MA we get the zero lag MA. This is the procedure used to calculate the zero lag MACD.

As MACD is difference between a short term EMA and a long term EMA (default periods being 12 and 26) the zero lag MACD is calculated by taking the zero lag EMAs. Similarly the zero lag signal is calculated by taking the zero lag EMA (default period is 9) of the zero lag MACD. The complete AmiBroker AFL code for calculating the zero lag MACD and the signal line are given below:

p1 = Param("Short period", 12, 3, 50, 1);
p2 = Param("Long period", 26, 5, 100, 1);
p3 = Param("Signal period", 9, 3, 25, 1);

EMAshort = EMA(C, p1);
EMA2 = EMA( EMAshort, p1);
Diff = EMAshort - EMA2;
ZLEMAshort = EMAshort + Diff;

EMAlong = EMA(C, p2);
EMA2 = EMA(EMAlong, p2);
Diff = EMAlong - EMA2;
ZLEMAlong = EMAlong + Diff;

ZLMACD = ZLEMAshort - ZLEMAlong;

EMA1 = EMA(ZLMACD, p3);
EMA2 = EMA(EMA1, p3);
Diff = EMA1 - EMA2;
ZLSignal = EMA1 + Diff;

Plot(ZLMACD, "zero lag MACD", colorGreen);
Plot(ZLSignal, "zero lag Signal", colorRed);

The result of this calculation is shown in attached Example-10 (Those who need the chart in only black & White may see attached BW_Example-10). For keeping the chart simple, I have not drawn the Histogram. In this figure the upper chart is the normal MACD and the lower one is zero lag MACD. The price chart is at the bottom. We can see that the peaks and troughs in Zero Lag MACD are sharper and occur earlier than in normal MACD. The MACD and Signal line cross-overs also occiur earlier in Zero Lag MACD. For trading the Zero Lag MACD, the same rules which apply to normal MACD also apply to zero lag MACD.


Regards

-Anant

 

[oldmirage]

This thread is running for long time and have missed lot of action in it but I had one basic question.
If I want to test the code posted by knowledgable ppl here, what softwares do I need to install ?
Are all or part of the software requires subscription ?