From the most recent Omega list:
Here's an EL task that I could use some "learned" insight on:
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~Shark's Relative OBV ~
(note: nick named after a friends AOL trading site, keyword: Trader)
The Problem: a need of a bar to bar reference for OBV.
OBV tracks a single line across our screens, it has no cross-overs, no buy-sell lines, we just use classical trendlines and divergences. We know how critical VOLUME is to a stocks future AMPLITUDE, but OBV has no real tight references to measure from.
Idea; OBV gets analyzed by it's relavite strength.
Seeing that OBV is relative to itself, what better way to help us analyze OBV's subtle (unseen) movements than by passing it through a *RSI?
What do we end up with?
OBV nicely tracks the relationships of changing PRICE & VOLUME.
PUSH OBV#'s into RSI and a whole new look at RELATIVE STRENGTH of OBV
appears. Changing trends are easier to see, divergences are a bit easier to spot, but the real interesting patterns come at extremes like market tops, bottoms, and breakout attempts. SRO shows us underlying weakness or strength while price diverges.
What I do next to our RSI is a bit bizzare, but here it is...
Seeing that RSI (and OBV for that matter) can breakout of a trend BEFORE price does, I run OBV/RSI's output into a 3 line Exponential Avgerage. I do this to identify trends, short, intermediate, and long. I'm still experimenting with these, but today I'm using 1,5,14ema's. for short term signals and 9,50,80 for longer term signals. All together, these give me my
Shark Relative OBV (SRO).
Take a look at the EL and offer up your thoughts plz.
Joe
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Input: Length1(1),Length2(3),Length3(9),LengthR(9);
IF
(XAverage(RSI(OBV,LengthR), Length1) > XAverage(RSI(OBV,LengthR), length2))
AND
(XAverage(RSI(OBV,LengthR), length2) > (XAverage(RSI(OBV,LengthR), length3)))
Then Buy at market;
IF
(XAverage(RSI(OBV,LengthR), Length1) < XAverage(RSI(OBV,LengthR), length2))
AND XAverage(RSI(OBV,LengthR), length2) < (XAverage(RSI(OBV,LengthR),
length3))
THEN EXITLONG at market;
*Thankfully, I found RSI ( a close based oscillator) to be a perfect match for the output of OBV. RSI requires only one input (a closing # ) to work from, so they are compatible to "chain".
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Jøhn |
