Bias Reversal

[MR]

There is a tool in AGET called Bias Reversal. Since I don't think anything has been assembled here before on it, I thought maybe a little intro to it would be a good idea. Here goes....

[MR]

Price Momentum and Volatility

By using the price momentum and volatility, research has been able to identify certain areas where the market is setting up for a price reversal. The initial identification is actually for a change in bias, thus the name Bias Reversal.

[MR]

Markets can have small changes in bias and still continue to trade in the original direction. Therefore, once a Bias Reversal is detected, we need to see further changes in prices to confirm the signal. This is discussed on the following pages. When a change in Bias is detected, the software draws a triangle. If the triangle is pointed up, then a change in Bias to the upside is detected. If the triangle is pointed down, then a change in Bias to the downside is detected.

[MR]

In Advanced GET when you activate the tool called Bias Reversal, little "triangles" show up. They represent the changes in Bias detected by Advanced GET.

[MR]

A change in Bias does not guarantee a change in trend. But, when you are using other AGET tools/studies/methodologies to define a possible trade, a triangle (change in bias) showing up is very helpful to see.

[MR]

It can help build confidence in your trade setup. I really like the Bias Reversal tool because it is an easy to use, simple to define tool.

[MR]

Once the change in bias is detected, one or two bars are needed to confirm the signal. If the confirmation is not seen, the signal is considered "False" and a line is drawn above/below the triangle.

[MR]

To prevent the false signals from being displayed, select the 'Filter' button to 'On' in the Bias Reversal menu. If you see a False signal bar drawn on the Bias Reversal you can leave that signal alone and wait for the next one, or you can do like I do and put less weight on it.

If I have, for example, defined a good trade idea, a Bias Reversal is nice to see, even if it has a false signal warning attached to it.

[MR]

The Bias Reversal also has a Normal and Tight mode. The Tight mode is basically a filtering technique where the software has to obtain stronger signal to generate the change in bias.

[MR]

This is not intended to serve as detailed explanation on Bias Reversal.

I just wanted to introduce the topic so anyone out there who has experience with the AGET "Bias Reversal" tool can share their experiences here in this thread.

[soylent]

Thanks Mark -- I've missed all your commentary!

I think the hardest thing for me when I first used AGET was knowing which tools to use. I've tried / untried BIAS reversals but never really found them effective. I read 'you draw a trend channel from the last low pivot to the bias reversal and look for a break' but I never found it worked well.

Out of curiousity, which tools in AGET do you use for your decisions? After trying them all, here's what I found works:

- Elliott Waves: I use this for structure and concept. I don't trade on it because I think the stops are too wide for the amount of leverage I use. But, I like that it auto-calcs various possibilities quickly in all time frames and shows me 'here's what you're dealing with'. Incredibly powerful if multiple timeframes converge.

- Ellipse: In place of a standard FIB, I like the ellipse because it gives me a TIME or RETRACE target. I use NORMAL only.

- MOB: A good targeting system. Unless we are in heavy trend, I sell 100% @ MOB as a limit order.

- Moving Averages: I like the offset feature. I run 20% channels off the 50/100 to show me extreme conditions in high volatility stocks. e.g. Most big movers (e.g. MSTR) bounce off their 50-day and pulse to their 20% above before falling to 50.

- AutoTrend Channels: I don't use it on my main chart because it usually just annoys me. But, I have a bunch of small 'timeframe' views. I enable it on all those small charts to quickly show me when a trading range is setting up w/o manually looking @ the chart.

That's the 'best of AGET'. I've never been able to do much w/ XTL. Maybe that's a mistake on my part.

I combine all that w/:
- CCI: I use CCI to time low-risk entry points. I could use something else (RSI, obv, etc) but, I like that CCI can go to extremes whereas other tools are range-bound.

- ADX: I use ADX to help show WHEN those e-waves are setting up for their next trend trade. Using the elliot wave likelyhood / prediction for direction.

Oddities:
GET Stochastics: This has perplexed me since the first day. I swear if the 'False bar' shows up that is a CLEAR sign the rise is over. I don't know if the e-signal version is damaged but everytime the NFB is there... I was convinced for a while that NOT having the bar was a trend sign.

The rest of it I haven't been able to develop a plan for / it doesn't make much difference. The GANN stuff is interesting but I've never been able to find a way to use it.

-c

[MR]

what aget tools do i like?

Hi soylent!

Originally posted by soylent
Thanks Mark -- I've missed all your commentary!

... Out of curiousity, which tools in AGET do you use for your decisions? .... -c

What tools do I use? Good question.

Combinations of the Elliott Wave algrithym, the three Elliott Oscillators; the general cross-reference concept; Stochastics; MOB, Ellipse and XTL; Fibonacci calculations; some moving averages, such as what you discribed, plus the 6/4 DMA's; all the tools discribed over and over in the Type 1 and 2 discriptions, etc. TJ Web's.

[MR]

I also do like other tools as secondary applications, such as the Gann, Bias Reversal, the old Cycle routine in the EOD, Parabolic, Volume settings, a little RSI, CCI, ADX/DMI, MACD; Seasonals in the EOD use to be a favorite for commodity related products.

Let me think of some more....

[MR]

some more ideas

I will use tools also like the Bollinger Band, Donchian, Price Clusters and Trade Profile, but I have to usely turn them off after an analysis.

When I get to this level the chart is getting pretty goofy, confusing.

So I will use things like the pencil to draw in what I think are key areas of support/resistance, then toggle off these secondary, teriary lower level related tools....

[MR]

check out some EFS's

You know there are a lot of interesting EFS's being developed in eSignal that I would like to figure out how to adapt, but so far have only had limited time to play with other ideas.

Alex and Steve, Dave Loomis, Chris K have some really nice ones they developed. You might want to look at their EFS's when you get some time. I think they could really help you with their ideas too....