Dave......the following will show you just how my being so rushed and not looking at the complete issue at hand causes me not to see the forest for the trees (or vice versa....I'm not sure). TSV is a proprietary indicator used by Don Worden in his TC2000 TA program. He has never given out the formula, but I thought I had come close with the formula I had given you......HOWEVER....
TSV stands for Time Segmented VOLUME, so my formula has to be flawed because it doesn't include a Volume factor. My formula DOES move and give signals in a very similar manner to his TSV, but obviously is either missing a key component or is just blind lucky. The following comes from the Worden User's Guide, with capitalizations made by me for effect.
"Time Segmented Volume is a proprietary technical indicator developed by Worden Brothers, Inc. TSV is an oscillator, which is calculated by using different time segments of both price and volume. From the standpoint of a price/volume relationship, TSV is essentially measuring the amount of money flowing in and out of a particular stock......When TSV crosses up through the Zero line, it signals positive accumulation OR buying pressure. This action is considered bullish. Conversely, when TSV crosses below the Zero line, it indicates distribution OR selling pressure, which typically PRECEDES a move down in price.
The idea is to look for divergences between price and TSV....it is important to note that several consecutive divergences increase the reliability factor in trying to pinpoint price reversals.
When you set the TSV parameter in your program.....you are simply calculating a RAW TSV on a particular MOVING AVERAGE....a RAW TSV would be too volatile to interpret.....as you increase the Moving Average, the result is a smoothing effect."
He later goes on to intimate that TSV is most effectively used when applying a Moving average to it and using the crosses as signals in much the same way MACD is used. A TSV of 10 is recommended for shorter term trading, with a similar MA.
As you can see, I don't really know what I'm talking about and have just stumbled on something with my formula that may or may not have any value. It gives me such good signals, though, there must be something there.
BW Chan |
