Richard Estes could do a much better job explaining Vidya to you. I've endeavored to plot it in WOW, with the use of Excel, but I haven't explored using it in trading systems. Jeff translates the system into:
if close(0) >= vidya and
close(-1) >= vidyay and
close(-2) < vidyab then
That would appear to be:
Buy if the most recent close is greater than or equal to the most recent Vidya. and the previous close is greater than or equal
to the previous Vidya, and the close before that (-2) is less than
Vidya (-2) before that. Close(0) is yesterday, if you downloaded
your data yesterday, so Close(-2) would be three days ago. Same for
Vidya (Vidyab is essentially Vidya(-2), but Vidya is recursive,
so you need to use Jeff's formula for Vidyab).
To get the bands in Metastock, you can use a formula that multiplies
Vidya times 1.01 for the upper band and .99 for the lower band.
You could try a trading system with the bands, too.
Chande's system, in "The New Technical Trader," is to buy tomorrow
"if the close of today and yesterday are both above the Vidya of
today." Sell "if the close of yesterday and today are both below
the Vidya of today."
The article in TASC suggested a system with the bands, though.
Try it like this: Buy if the close of today and yesterday are both
above the upper band. Sell if they're both below the lower band.
But as I say, I haven't tested any of these. Richard probably has
some better ideas, on systems and the width of the bands (and the
usefulness of the bands).
I've got to get Metastock -- no doubt about it.
Brooke
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