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Strategies & Market Trends : Technical Analysis- Indicators & Systems

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To: Richard Estes who wrote (1)9/26/1996 2:08:00 AM
From: Richard Estes   of 3325
 
VHF
The Vertical Horizontal Filter (VHF) determines whether prices are in a trending phase or a congestion phase. The VHF compares the sum of a one period rate-of-change to the range between high and low prices over the specified period.
The age-old problem for many trading systems 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, oscillators (which work well during trading range markets) tend to overreact to price pull-backs during trending markets. The VHF indicator attempts to remedy this by measuring the "trendiness" of a market.

VHF( c, 28) >.3 BUY
VHF( c , 28) <.3 SELL

play with it. use a MA trigger.
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