Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Let's Talk Technical Analyisis (TA) -- Ignore unavailable to you. Want to Upgrade?

To: robnic who wrote (105)	12/27/2001 5:01:58 PM
From: MechanicalMethod	Read Replies (1) \| Respond to of 178

1st choice is always continuation unless there's strong evidence for reversal. D's check of the high and low is the first test and I like it a lot. If that reverses dir the close is tested to see if it's weak within the current range. Whereas D accepts every higher L and higher H as an upbar I will do that too if the dir is already up but when dir is down and an upbar occurs I don't accept it as a reversal bar if c is in the bottom 40% of the current range. That disqualifies the NDX 12/11/01 upbar. Very next day, 12/12 closed in the upper 40% of the current range... a strong close but it occurred in a downbar with lower L and lower H ... during a downswing ...so there wasn't any check on close location because it's assumed to be a continuation bar. It was a close price reversal but that's a different discussion. Yesterday, 12/26 suggested an upbar because of the higher L and higher H but it would be a reversal bar so the next check was for a weak close in the bottom 40% of the current range which said it was continuation down nullifying the reversal... and had it not been for the fact the close was greater than H[1], a simplification since the actual rule is anything within the top 15% of range{1] is strong. The tests are done in series and since this was the last check and the close passed as strong in comparsion to range[1] that bar painted green for reversal up. There's other ways to do this like assigning a point to each condition based on failure or success and then summing the total. I don't like that result but might if I had the right conditions to check for. As of now I'm still tossing around ideas. Another test determines if the bulk of the current bar is beyond the previous bar... if 60% of the current range is above the previous bar it adds a point toward confirming reversal. Note these tests aren't applied to obvious continuation bars but just reversal bars in an attempt to filter some of the failures. It delays some reversals by a bar but generally it doesn't and overall it kicks out the failures. If the tests were properly designed and more importantly properly sequenced then the best method is 1 that opts for continuation and halts further testing when continuation is determined. There's plenty more, some proprietary because I'm happy with how it's working but a bunch still in development. Those are the ones that interest me because I want to learn some more about them.