slope of an ema efs

[mbuta]

George,

I do calculate and use MA slopes, as follows:

1. I calculate a "day normalized" slope:
a/ use ROC to calculate the slope of n bars
b/ calculate slope/bar
c/ day normalize: multiply by the number of bars per day
Note: This gives me a slope that would translate into x% move for the day, if the slope would stay the same.

2. I assigned a minimum value for each MA that (in my view) would represent a trend.
For example, for MA20 @ 5min I assigned 2%, whereas for MA100 only .2%.

3. I calculate "weighted" slopes, where I give diferent weight to diferent MA's (10 to MA10, 100 to MA100 etc.)
For example SlopeMA0w2 = (10*SlopeMA10+20*MA20)/(10+20)
Note: The idea here is two folds if trend is still strong, a shallow change in MA10 would NOT change much the weighted slope, but this will happend at the end of the trend, when higher MA is not so strong anymore.

4. I display them all: from MA10 to MA100. The result shows obvious Re-Entry points (when trend is still strong but have a mild correction that affects only low level Ma's), and shows when the trend is about to end.

Note: I have an option to use either the slope, or the angle.

Note: I would recommend to include ADX in almost anything pertaining to trend detection. It is probably the best indicator for that. I also use CCI100 (is >100 it is a trend, don't try to go opposite).

Hope this will give some ideas.
Mihai

[Harndog]

Slope Chart

Mihai:
Can you please post a chart of your "slope system?"

Thank you,
Harndog

[wombat953]

mbuta
Many thanks...I am just starting to look into CCI, by chance, as part of my method of trend identification.
Here is the difficulty I am having with EMA as a trend indicator for EFS sinal based trading system. I have posted this elsewhere, also.
For example, one could use an EMA. So now what criteria do we apply? If the current value of the MA is greater than the prior, we have an uptrend and vice-versa. Or might we need two, or three (or more) successive values, such that the current is greater than the prior, and the prior is also greater than the one before that (and again vice-versa for a downtrend).
Is it necessary to close above(below) the MA? Should we be more cautious and seek two such closes? Should we seek a close by a certain distance (percentage) above (below) the MA line? What about the angle of the line, assuming this is measurable? Dr. Elder is ambivalent about the application of some of the jazzier filters to the simpler MA approaches (p.126, TFAL).

And what happens when - with a trend in place - we get a MA that is not higher(lower) than the previous one? Does this nullify the existing trend, so that we now have to wait for another 2 or 3 or more successively higher (lower) MA's? Or might it simply be a period of consolidation, a short-term retracement - the wave that goes against the tide - that signifies an overbought/oversold condition? But if, say, 3 successively higher(lower) MA's constitute our definition of trend, and it is nullified by a lower value (or a close below the MA), then we no longer have a trend, for the purposes of developing a consistent trading plan/system. How does one resolve this?

This last item is my main issue.....if we get an EMA value that conflicts with the prior trend. This is why I am investigating additional criteria such as slope, CCI, etc. to augment EMA as a trend identifier.
Thks
George

[mbuta]

If I findout how topost pictures, I will of course.

[eSignal_JasonK]

Hello Mihai,

There are some instructions for posting images/charts to the forums in the following thread that may be helpful.

How do I show a chart in this forum?.

[mbuta]

George,

Here are a few comments to the ssues you raised:

1. Moving averages are lagging indicators, so information is usually late.

2. There is not "BULLETT PROOF" trading system. The day it will be discovered the Stock Market ceases to exist.
ANY SYSTEM WILL GIVE YOU FALSE SIGNALS.

3. The way you "smooth" small variations is by using one or more MA of the indicator (Wizard is very good help), or use diferent "pace" for the indicator.
For example, I use:
MA3, Ma7 & MA14 of RSI14
ADX(3,14), ADX(7,14) & ADX(14,14)
BollingerBands, CCI BollingerBandsPercent have as source the MA3 of close.

Hope this will help.
Mihai

[mbuta]

I created a ShareFile Group and uploaded an example there. I will try to bring it here, so I can comment.



Ok.
What you have here is a 30min chart of SMH.
Indicators and Plots:
Price Pane: MAS10, MAS20, MAS50, MAS100 for 30min and BollingerBands for 60min interval.
Moving averages are colored to show slope levels above and under the chosen trend level (which is diferent for each one, see previous post). Buttons allow me to display other things as well, like: BollingerBands for 30min or Daily, Channel64 (see Advanced GET people), Pivots, Paint PriceBars, Paint Backgroung, Paint or not the MA.

First Pane: Normalized ADX3, ADx7, ADX14 of DMI14 and DeltaDI (PDI-NDI).
Normalized means: Divided by ADXTrendLevel, which I chose it to be 20.
ADX Colors: White = ADX<Min(PDI,NDI) - it is either a "no Trend" or "EntryWindow" indication. Red = ADX>ADXR - trend is accelerating. Yellow = ADX > Max(PDI,NDI) - usually an indication that Elliott Wave 5 is in progress.

Second Pane: MA3, MA7 and MA14 of RSI14.

Third Pane: The displayed option is OverBought/OverSold status for 30min, 60min, Daily (mainly a sum of Stochastic and BollingerBandPercent). The plots are colored with Stochastic Code: lime = vK>vD & vD> 20, red = opposite, yellow means OB/OS with vK signaling oposite direction.

Forth Pane is Oscilator 3/35 @ 30min and 60min.

Last Pane is Slope MA, the one you were interested in. The default setting for 30min are displayed:
Magenta = SlopeMA100
Histogram lime = (10*SlopeMA100+5*SlopeMA50)/(10+5)
Cyan = (2*SlopeMA20+5*Ma50)/(2+5)
Red = (SlopeMA10+2*SlopeMA20)/(1+2)
Slopes are in Angle.

I trade options and I use the 60min cycle as "swing cycle".
You can how the trend is defined my a combination of slopes
Also, you can see the Re-Entry Windows during trend (only red plot is negative), or Elliott Wave 4 correction, when also the cyan plot is negative.
An other thing this shows are some, "InTrendExitPoints", when red plot is the biggest.

Combine this with other indicators (OB/OS, BB, ADX, RSI, CCI, etc.) and you can create your own set of signals.

Good Luck!

[padhus]

Calculating Slope of exponential moving avg and painting the candle bar

Originally posted by Alexis C. Montenegro
yoda
The attached efs will paint the bar green if the slope is >0.5, red if <0.5 and black if in between.
You can adjust the slope filter values (separately for UP or DN) in Edit Studies
Alex

Hello Folks,

I am new to eisgnal. At the present time I use AIQ software and am considering building a second platform for redundancy and would like to know if the below mentioned logic is possible in Esignal before I purchase/lease the software.

1. STEXPMA10 - Short term exp moving avg set for 10 periods.
2. Calculate Slope of STEXPMA10 over the past 5 periods and plot it as a histogram.
3. Calculate Slope of STEXPMA10 over the past 10 periods and plot it as a histogram.

4. Buysetup1 if step-2 and step-3 values are greater than zero.

5. Buysetup2 if DMI > 0. ( Directional Movement Indicator)

6. BUY if Buysetup1 and Buysetup2 passed in the current bar and trigger an alert and also paint that candle green.

Pls note that I would like the rule/alert to be triggered and bar painted ONLY on the first instance of step-6. In other words on a 2 min chart if step-6 passed at 06:30pm and is valid till 07:10pm then I don't want all bars from 06:30 to 07:10 to be painted and don't want the alert to go on every 2 min. Instead the Alert is triggered at 06:30 and bar painted at 06:30 and when the next occurance happens after step-6 is false and then true thats when I would like the alert to be triggered.

to summarise
BUY if Buysetup1 and Buysetup2 passed in the current bar and was not true the previous bar. If someone can post a chart with this I would really appreciate it. Thanks again and looking fwd to build my second trading platform with esignal.

Thanks.

Cheers,Padhu

[chrisf95003]

Padhus,
THe platform is free, all you pay for is the datafeed. You can download the software from www.esignal.com and check it out. The only thing is you will not have data, but at least you can play around with esignals scripting language.

chris