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Trade the Bollonger Band Squeeze

Quest for a NEW predictive BUY signal indicator

Chart Forum » Indicators » Quest for a NEW predictive BUY signal indicator

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rusty99
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Username: rusty99

Post Number: 5
Registered: 10-2006

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Friday, April 03, 2009 - 08:54 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Have you noticed that most of the technical indicators are very old, most being developed more than 20 years ago, and many 50 years ago, well before the age of computers.

There are two issues here: 1. computers provide a fundamental shift in the way indicators can be developed. 2. Computers have fundamentally changed the way the entire market functions and behaves because computers provide instant information.

If you look at the details of the derivation of the indicators that all of us use you will see that most are very primitive and simplistic, despite heir widespread use.

I have been looking for new modern indicators that provide better predictive power. My idea is to focus on parameters that change just before a stock starts a new surge. Sure there are many sudden announcements etc. that are unpredictable. But often there will be signals in the few days prior to a rise that are partially due to the way that the market behaves and the effect of some new activity or interest in the stock. I have been focusing on the following parameters used to provide a buy signal:

Increase/decrease in Volume
Close in the top half of the daily range
The size of the daily range
Gaps i.e. sudden increase in mean daily price compared with yesterday’s mean.

I have been developing an index that uses a combination of these parameters. So far the results look promising and the index gives a signal one to four days before the price surges.

I would be interested on your comments about these and other signal parameters and new indicator methods that attempt to do the same thing.


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eblode
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Friday, April 03, 2009 - 11:20 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Rusty99,
I think you have a great idea. Follow it up and when it's workable drop me a line.

Eugenio







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rusty99
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Sunday, April 05, 2009 - 12:22 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



“Predictive” – Possible???

My use of the term relates to the idea that in many cases there will be signs in the data prior to the surge, that the stock is about to surge.

This is apart from the unexpected changes due to announcements etc, etc and the general chaos.

To quote from Incredible Charts

"Twiggs Money Flow warns of breakouts and provides useful trend confirmation. It is based on the observation that buying support is normally signaled by:
• increased volume and
• frequent closes in the top half of the daily range."

But do these parameters signify more than a trend confirmation???

Note: The image in the link is an ideal selection to illustrate the concept - not an ideal buy signal. Its just an example that shows the concept.

Referring to the image the closing price occurs in the lower half of the range as the stock price falls.
But in the three days prior to the surge the closing price moves up the range.

There are also changes in the relative volume (not shown) and in the total range (the relative size of the bar) + gaps, etc.

My draft indicator picks up the trend in these parameters and surges upward for 3 days prior to the price increase.

(Of course nothing is perfect blah, blah and you would use other info etc.).

The dream is that this is a general pattern that reflects modern market behaviour and patterns.
(VSA looks at similar patterns, though I have little experience with VSA).

An indicator that detects signals of a price rise in the days prior to the surge is “predictive” or that is the dream anyway.

http://www.findseedo.com/images/pic3mod.jpeg

(Message edited by Rusty99 on April 05, 2009)


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jimmyparky
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Username: jimmyparky

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Friday, April 10, 2009 - 06:29 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



forget the indicators.. they don't work. only use price action.


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davkell
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Username: davkell

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Saturday, April 18, 2009 - 08:58 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Jimmy;

Indicators do work, if you know how to interpret them to determine an edge.

Price action also works, unless you don't know how to interpret price action to determine an edge. Me, I cannot find a system looking at price action, but can so with indicators.

And probably you the same with PA.


"Trade Your Way To Financial Freedom" - Van K Tharp

"Manage the downside; the upside will take care of itself" - Donald Trump

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qed
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Username: qed

Post Number: 122
Registered: 01-2006

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Sunday, April 19, 2009 - 04:18 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Indicators do WORK , its ur mind that disbelieves,doubts,and stops u acting, untill u take the emotion out of trading ...quad erat demonstratum...cheers Qed


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gabatsns
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Username: gabatsns

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Registered: 10-2008

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Thursday, August 26, 2010 - 06:55 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



rusty what you are looking at is already being explored by the people at vectorvest and Trading markets dot com

personally I have been watching a 5 day SMA against a 5 day EMA for an approaching cross of the first below the second, while simultaneously breaking the short term downtrend ( see graphic) as a possible buy at the low, confirmed by a cross by the 5 day SMA above the 15 day SMA,then continuing to hold the position till The 5 d SMA crosses below the 15 D SMA.


30% of your position at the assumed Low. the rest at the confirmation.
Hold untill the 5 day SMA drops below the 15 d SMA then sell and wait till the next..

Whatcha think?







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spdfgh
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Username: spdfgh

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Registered: 06-2004

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Monday, May 01, 2017 - 08:07 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



These posts prompted me to think about the potential of what the Incredible Charts mobile app PC version could be, you might be interested in this thread here:
https://forum.incrediblecharts.com/messages/12/4821820.html

US Stocks 15-minute delayed

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