Experiments in Technical Analysis

[gobatman2001]

Re: Indicator Review

I am going to introduce a simple indicator called RAVI introduced by Tushar chande. The indicator Range Action Verification Index (RAVI) is useful to check trending and ranging markets like the ADX. RAVI is a momentum based indicator whereas the ADX looks at current price action to the previous.

Interpretation

The interpretation is very simple. When the value of the RAVI is more than 3- 4 % then the stock is trending. Lesser than this value the stock is ranging. Of course there is no hard and fast rule about the percentage level. One can fine-tune it depending on the market or stock. It may vary from stock to stock. You can experiment with these values and also the moving average values.

Warm regards

karthik

Hi! Karthik,

Firstly, thanks for this brilliant thread. This is really an eye opener.

I have tried to get some detailed information on the RAVI indicator, but have not managed to do so. Hence, I am requesting you if you could please help me out on what I am missing. Could you please help me with the following queries ....

Attached is a chart. I have marked 2 arrows, 1 on the price & 1 on the RAVI. The date is the same for both (Sep 19).

1) Why is the RAVI indicator showing an upmove, when the price is still falling.

2) What do the numbers on the right hand side of the chart mean (1.704, 3.9809 etc)

Thanks & regards,
Amit

 

[kp1234123]

Hi All
I'm Koshy , I am an NRI from Saudi Arabia. I'm a novice in this field. I would like to get a better insight as I find it pretty interesting.

Could anyone please tell me what to look out for while choosing a broker and a DP?
I like interday and daily trading

 

[rajesh.sadhanala]

Hi KArthik,

As usual nicely put up, great to see the thread reaching higher highs as day by day. I missed out some action for the last 3mnths, slowly joining into it again. May not be as active as before but will definately follow the action.

Bye.. Take care.. Catch u sometime on Chat.

Raj

Hi Rahul
Brief explanation of ATR, HHV and LLV
ATR or the Average True Range was first defined by Welles wilder as a measure of volatility over a stocks volatility over a given period.

More specifically, the average true range is the (moving) average of the true range for a given period. The true range is the greatest of the following:
The difference between the current high and the current low
The difference between the current high and the previous close
The difference between the current low and the previous close

The value returned by the average true range is simply an indication as to how much a stock has moved either up or down on average over the defined period. High values indicate that prices are changing a large amount during the day. Low values indicate that prices are staying relatively constant.

ATR is also popularly used for trail stopping. Basically it is a volatility stop. When the volatility toward the opposite direction occurs you get stopped. Normally stops are designed in multiples of ATR. So in a trail stop like the popular chandelier exits the stop is always from the highest high over a specified period.

Highest high or HHV is the value the highest value of the stock over the specified period. (Note not the highest close but the highest high).

In the same way LLV is the lowest Low value for the stock in the specified period.

The HHV and LLV are quite useful functions to find the range of a price range over a period. The stochastic formula uses the HHV and LLV

Stochastic K (n period)= close LLV(n)/ HHV(n)-LLV(n)

Hope this would clarify some of doubts.

Regards

Karthik

 

[karthikmarar]

Hi KArthik,

As usual nicely put up, great to see the thread reaching higher highs as day by day. I missed out some action for the last 3mnths, slowly joining into it again. May not be as active as before but will definately follow the action.

Bye.. Take care.. Catch u sometime on Chat.

Raj

Hi Raj,

Nice to hear from you. Hope you are doing very well in your new career and new place. Looking forward to you in the chat room.

warm regards

Karthik

 

[karthikmarar]

Re: Indicator Review

Hi! Karthik,

Firstly, thanks for this brilliant thread. This is really an eye opener.

I have tried to get some detailed information on the RAVI indicator, but have not managed to do so. Hence, I am requesting you if you could please help me out on what I am missing. Could you please help me with the following queries ....

Attached is a chart. I have marked 2 arrows, 1 on the price & 1 on the RAVI. The date is the same for both (Sep 19).

1) Why is the RAVI indicator showing an upmove, when the price is still falling.

2) What do the numbers on the right hand side of the chart mean (1.704, 3.9809 etc)

Thanks & regards,
Amit

Hi Amit

Is it a inbuilt formula or a custom built one for RAVI indicator in Fibotrader.
It looks as if it is behaving exactly the opposite way. Please check the formula again.

regards

Karthik

 

[gobatman2001]

Re: Indicator Review

Hi Amit

Is it a inbuilt formula or a custom built one for RAVI indicator in Fibotrader.
It looks as if it is behaving exactly the opposite way. Please check the formula again.

regards

Karthik

Hi! Karthik,

It's an inbuilt formula. To save my life, I can't create scripts (as of now)

Will check with Fibotrader.

Thanks,
Amit

 

[mrktMC]

Hi Karthik,

First of all let me Congratulate you for a wonderful effort and showing courage and conviction in bringing forward your trading system on an open forum. I really appreciate people like you who put up there best parts and hardwork in a best and selfless way. Great job dude...!! I read only the 30% of couple of thread's of traderji and found three gems of this forum for there outlook one is Saint,vvonteru and Karthik as I told you I only read only 30% of this forum as I started reading since last week. I am not aware of any technical analysis as I am not that literate to understand the fine points of technical indicators so never used it in my 10 years of trading. But I understand how a proper technical study can give you proper outlook of market and stock direction. My Long term outlook where all based at what the producthas in store for the future and what market it will be targeting and what revenue its going to generate and what is the current borrowed money its playing with and what is the outlook of the company and my daytrading was mostly on market sentiments and volumes and bad news and good news for the company but i never trusted rumours so every time used to pick only6-7 stocks to trade from each sector and used to play accordingly. Well that was my view point as I told you am bad at one thing that is calculations..... But Dear Karthik after reading your Thread am pleased and proud of your efforts and wish you all the best for your wonderfull Journey towards new horizion of the world of stocks.....Keep it up man!!..............thats d spirit of the winner............

promienent regards,
MrktMc

 

[karthikmarar]

Hi Ananth

Nice to know you are trying out the Afls. If you are able to achieve better results please do post them for the benefit of members.

When I apply the trading system quite often I get consecutive buy or sell signals without getting a signal in the opposite direction. In my opinion an ideal trading system should generate alternate buy and sell signals (I am saying an ideal system, not necessarily every system). Am I correct?

Yes, Many people have the same opinion, that the trading system should not give consecutive buy or sell signals. But in my personal opinion any systems should give consequetive buy signals whenever there is one. For example in a up trend the pull backs also provide opportunity to enter for those who missed the first one and to add for those who are already in. So in my systems I do not try to prevent the multiple buy or sell signals. Maybe a matter of choice.

When we test our system, if we get such consecutive signals in the same direction should we take only the first one and ignore all others till an opposite signal occurs? After all, if we really use the system for actual trading, we would not know that one more signal of same kind may come later. So, we would be taking the first signal and act accordingly. If another signal of same kind comes later what would we do in real situations? May be for a buy signal we my buy more. But if a second sell signal comes we may not have anything left to sell even if the second signal is more profitable. So in simulation also should we follow the same principle?

I think it depends on ones style of trading, capital and risk profile. Some prefer to enter on the first buy and ride the trend till the sell signal comes. Some keep adding on every consecutive buy signals. Here capital may be a constraint.

If a system gives buy and sell (or sell and buy) signals on consecutive days should we accept it and trade accordingly? Even if such trade leads to loss? Because on a longer time span this loss may be wiped out with a handsome gain.

Again it would depend on the trading style. If you decide to strictly follow the buy and sell signal then you should you should sell if the signal comes the next day of the Buy signal. But if you decide a stoploss from the buy price you can still hold even if the sell occurs but the stoploss is not hit. This keeps you getting out of the trade for temporary dips. But if your system gives repeated buy and sell signals on consecutive days then it is time you had seriously look at the system.

It will be interesting to hear more opinions on these. Looking forward to some

Warm regards

Karthik

 

[karthikmarar]

Hi Karthik,

First of all let me Congratulate you for a wonderful effort and showing courage and conviction in bringing forward your trading system on an open forum. I really appreciate people like you who put up there best parts and hardwork in a best and selfless way. Great job dude...!! I read only the 30% of couple of thread's of traderji and found three gems of this forum for there outlook one is Saint,vvonteru and Karthik as I told you I only read only 30% of this forum as I started reading since last week. I am not aware of any technical analysis as I am not that literate to understand the fine points of technical indicators so never used it in my 10 years of trading. But I understand how a proper technical study can give you proper outlook of market and stock direction. My Long term outlook where all based at what the producthas in store for the future and what market it will be targeting and what revenue its going to generate and what is the current borrowed money its playing with and what is the outlook of the company and my daytrading was mostly on market sentiments and volumes and bad news and good news for the company but i never trusted rumours so every time used to pick only6-7 stocks to trade from each sector and used to play accordingly. Well that was my view point as I told you am bad at one thing that is calculations..... But Dear Karthik after reading your Thread am pleased and proud of your efforts and wish you all the best for your wonderfull Journey towards new horizion of the world of stocks.....Keep it up man!!..............thats d spirit of the winner............

promienent regards,
MrktMc

Hi Mohan

Thanks for those wonderful words, encouragment and wishes. Such kind words make all the efforts worthwhile

You seems to have a good system based on fundamentals. It will be nice if you share your experience and knowledge with us. The members will be immensely benefitted by it.

Wishing you also the very best in life.

warm regards

karthik

 

[rahul_trader]

Hello Karthik

I am happy to have you here you don't know how much help you where to me and I thank God for showing me people like you inthis market from whom people like me can learn a lot. Well In India we don't have advantage like in US where you get quality technical institutes where you can go enroll and learn all about technicals here we have to do our own homeworks and our own studies and even if it is wrong no one is here to tell us Oh!! Boy u doin the wrong stuff its not done like this...so people like me go on working in a wrong direction so thats where I find people like you and beleive me people like you are like a lifeline for us beacause you all save us from blunders and mistakes and give us a chance to do something inour life. God bless you for this and if you like or not have taken you as my Mentor and am happy to follow your footsteps. I will be looking forward for your valuable advices from yor end.

your student,
Rahul