Strategy Based On Chart Pattern

trading strategies and money management discussion, code, results

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TheRumpledOne
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Postby TheRumpledOne » Sun Jun 25, 2006 1:20 pm

Nice work, fatdog1!!

To me, CONGESTION is a function of time and price range.

That's a indicator screaming to be coded.

I think the NickNxtMove indicator tries to do that.

Hmmmmmmmmmm.............

https://www.tradestation.com/Discussion ... c_ID=29357

https://www.tradestation.com/Discussion ... ic_ID=3458

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Postby fatdog1 » Sun Jun 25, 2006 2:41 pm

TheRumpledOne wrote:Nice work, fatdog1!!

To me, CONGESTION is a function of time and price range.

That's a indicator screaming to be coded.

I think the NickNxtMove indicator tries to do that.

Hmmmmmmmmmm.............

https://www.tradestation.com/Discussion ... c_ID=29357

https://www.tradestation.com/Discussion ... ic_ID=3458


Nice work, fatdog1!!

I take that to be a high compliment coming from you my friend.
Thanks to you for all you do.
It is awesome stuff.

FD1

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Postby TheRumpledOne » Sun Jun 25, 2006 3:48 pm

I just posted a CONGESTION INDICATOR.

Check it out.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

Please do NOT PM me with trading or coding questions, post them in a thread.

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Postby fatdog1 » Sun Jun 25, 2006 11:09 pm

TheRumpledOne wrote:I just posted a CONGESTION INDICATOR.

Check it out.


Looks real good.

I will watch it this morning when I watch the currency futures market and the bonds.

Here is a daily screen shot of the British Pound showing the 4 stages on a higher time frame. It shows all 4 stages very clearly.

I always look at higher time frames for determining major trends.
I know that long retracements on smaller time frames are most likely shorting opportunities until the Pound enters a stage 1 trading range and a new stage 2 uptrend on a daily chart.

The Pound has a very clear stage 3 top area between 1.8575 and 1.8990 that lasts from early May until early June before the breakdown into stage 4.

If it was possible to code a strategy based on the
4 stages, it should also be possible to trade inside such a large congestion area by shorting the top area and going long at the bottom while waiting for the breakout or breakdown to happen.

For that to happen, the top line would have to plot after 2 touches and the same for the bottom line to make you aware of the trading range.

2 questions.

1. Does anyone know what makes the DarvasBox plot the box when it does?

2. Could the DarvasBox be altered to plot a vertical box for when the stage 2 up or stage 4 down moves happen?


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Postby fatdog1 » Sun Jun 25, 2006 11:51 pm

Here is the weekly 30 year bond chart.
A new stage 4 declining phase would put quite a few
real estate millionaires in the Nasdaq 2000 club.


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Postby Ali Son » Mon Jun 26, 2006 12:20 am

FATDOG1,

Could you kindly post the 30 year bond chart abovewhich you just did as a tsw? Thanks.

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Postby fatdog1 » Mon Jun 26, 2006 1:40 am

Ali Son wrote:FATDOG1,

Could you kindly post the 30 year bond chart abovewhich you just did as a tsw? Thanks.


One weekly @US coming up.
Attachments
@US 6-25-06.tsw
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Postby TheRumpledOne » Mon Jun 26, 2006 1:45 am

Are the stages defined as a formula or as a visual interpretation?

In other words, can it be coded?
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Postby fatdog1 » Mon Jun 26, 2006 2:56 am

TheRumpledOne wrote:Are the stages defined as a formula or as a visual interpretation?

In other words, can it be coded?



The 4 stages are visual interpretation from the Stan Weinstein book Secrets for Profiting in Bull and Bear Markets.

The stages are not coded anywhere that I can find.
I have seen horizontal channels and vertical channels on price charts so I think it is possible.

I found this on GOOGLE about Stan Weinstein

Stan Weinstein is one of the world's greatest technicians. His book, Secrets For Profiting in Bull and Bear Markets is a must-read for all serious investors.

Weinstein's stage analysis (outlined in his book in detail) is a simple and powerful concept to understand longer-term trends in individual stocks, as well as in the stock market. As shown in the diagram above, there are 4 stages to the movement of stocks :

Stage 1 (The Basing Area) : Stage 1 is a time period where the stock fluctuates in a relatively narrow range. Little or nothing seems to be happening and the stock price will wander back and forth across the 200 day moving average. This period is generally called "base building".

Stage 2 (Advancing Phase) : Stage 2 is an advancing stage characterized by the stock rising above the 200 and 50 day moving averages. The stock may drop below the 50 day average and still be considered in Stage 2. Fundamentally, Stage 2 is triggered by a perception of improved conditions with the company.

Stage 3 (The Top Area) : Stage 3 is the "topping out" of the stock price action. Typically the price will begin to cross the 200 day moving average towards the downside, and the average may begin to round over on the chart. This is the time to take profits.

Stage 4 (The Declining Phase) : Finally, the Stage 4 decline begins. The stock price drops below the 50 and 200 day moving averages, and continues down until a new Stage 1 begins.

The diagram below, shows this in detail.



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Postby TheRumpledOne » Mon Jun 26, 2006 3:41 am

Looks like the accumulation/distribution cycle to me.

A rose is a rose...:lol:
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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