Index Barometer
| |
|
Last Poster |
Posts |
Pages |
Last Post |
| |
|
|
|
|
|
|
| Author |
Message |
     prescient
Member
Username: prescient
Post Number: 1
Registered: 04-2008Rating: N/A
Votes: 0
|
| | Tuesday, April 01, 2008 - 08:23 am: |  
|
Hello everyone.
I have recently finished developing my own indicator to judge sentiment on key indexes and equities. Because all of the knowledge I gathered to do this has been gleaned from this site and its posters, I thought I might put up the results here. I'd love any feedback you may have to offer. 
All Ords
Dow
S&P 500
Nasdaq
|
sway
Member
Username: sway
Post Number: 196
Registered: 12-2005
Rating: N/A
Votes: 0
|
| | Tuesday, April 01, 2008 - 01:18 pm: |
|
Well done Prescient.
I take it that:
green=ok to open new long
black=hold
red=sell/short
What are the maths behind the indicator?
Sway
|
sir_lance
Member
Username: sir_lance
Post Number: 16
Registered: 12-2005
Rating: N/A
Votes: 0
|
| | Wednesday, April 02, 2008 - 06:32 am: |
|
Looks good. Maybe its the colour
Have you backtested it to see how it goes? It appears your indicator is geared towards detecting longer term trends (weeks) as opposed to shorter trends (1 day - week).
OK you have my intrigue also, do you mind sharing your maths ?
|
prescient
Member
Username: prescient
Post Number: 1
Registered: 04-2008Rating: N/A
Votes: 0
|
| | Wednesday, April 02, 2008 - 07:48 am: |
|
Thanks for the support.
Re: the maths, I have written a paper on the whole concept which I will make available as soon as it has been published (gotta take my credit if it's due  ). The premise is fairly simple: a ranking applied to 3 other (2 price, 1 volume) indicators to give a final figure of between -50 and 100. The whole thing is automated in a program that spits out a nicely presented chart.
Sway: You're mostly right... Except instead of hold for black, I would be out of the market entirely as a trader. I actually have another version of the model suited to investors which is just less sensitive.
Ideally, you would buy on the transition from black to green (or short on the transition from black to red). You would then close out your position on the next transition to black. However, you will notice that there are some false signals. I've tried to minimise these, but unfortunately can't get rid of them entirely without undermining the model's sensitivity.
I have backtested the model on numerous equities and indices and it works very well - avoiding major catastrophes such as the '87 crash and Japanese meltdown. At this stage I've only just finalised it as a tool, so in terms of real world trading I don't yet know - ask me in a year!!
|
tryhay
Member
Username: tryhay
Post Number: 991
Registered: 09-2005
Rating: N/A
Votes: 0
|
| | Saturday, April 05, 2008 - 02:37 pm: |
|
Hello prescient,
Your charts do provide a visual approach to trading that seems to have merit.
I wonder if your work is modeled on the work of Stewart Gault (from Olympus Funds Management), and previously completed work by Yukiharu Abe (who worked at WAKO Securities Co.).
Gault's recent article " Using a colour spectrum to represent changes in the WAKO volume ratio..." provides a similar chart using wider spectra (and the software application 'Matlab') to provide practical investment signals in all time frames ~ and has been highly recommended in some quarters for quickly identifying potential investments ~ when applied to individual equities and/or index price.
Any connection perhaps?
(Message edited by tryhay on April 05, 2008)
Happy trading DYOR
|
|
Threads by Last Post Time: First
1
2
3
4
5
6
7
8
9
10
Next
Last
|
