Try this.
It's a real neat charting method that make it easy to visualize trends. It's easy to do using your TC2000.
This is basically a Moving Average crossover with a "twist".
VERY important that you make it an EXPONENTIAL Moving Average. A Simple MA just doesn't work right.
Feed in a 3, 5, 8, 10, 12, 15 day EMA for your short moving average "band". Make all the plot lines the same color.
Feed in a 30, 35, 40, 45, 50 and 55 day EMA for the long moving average "band". Make these a color that contrasts well with the short MA's.
What this does is give you a real nice 3D effect which make it easy to visualize.
I even used different shades of the same color to increase the effect. Magenta for the 3, 5, & 8 day MA and HI Magenta for the 10, 12, & 15.
Red/Hi Red for the Long MA.
You're looking for moving average crossovers just like normal except NOW you are looking for the Short BAND (3, 5, 8, 10, 12, 15 EMA's) to crossover the LONG Band (30, 35, 40, 45, 50, 55 EMA's).
The Long and Short "Bands" that you have made will expand or compress and "twist" as the individual plot lines WITHIN the Bands crossover each other.
When Short crosses over long it gives you a BUY signal and Long crosses Short gives a sell signal, BUT ONLY if BOTH the Long and Short MA have compressed.
It is a false signal if one or both bands have NOT compressed.
The basic premise is that when either the long or short band compress, SOMETHING is going to happen. Crossovers give Buy/Sell signals.
For shorter term trades where a crossover is not present you would have to combine this with other indicators to know whether it was a buy or sell.
For a great example of a MAJOR buy signal take a look at the most recent crossover in a DELL chart.
Both bands compressed very tightly, the crossover gave a buy signal and you know the rest.
The tighter the bands the more important the signal.
Just remember to use an EXPONENTIAL Moving Average so you don't get a "time lag" in the signal.
A picture is worth 1000 words. Go do a few charts. I think you'll like it. |
