Forum Archive Index - December 2002

[Phaedrus <Phaedrus@techemail.com>]

Where FPH has been in a simple downtrend followed by a simple uptrend, FPA has 
been much more volatile, and has also been trendless for months at a time. This 
means that trend indicators such as moving averages are not applicable here. 
The same 40 day EMA that worked so well for FPH giving two good signals in a 
year, gives about 18 next to useless signals with FPA over the same period. 
Oscillators are therefore required here. Plotted below are the RSI and RVI - 
note how either is OK used on its own, but superior results are obtained by 
waiting for both to give a signal. 
The DMI is also plotted. While this is a trend indicator, use of its ADX 
component as a filter ensures that DMI crossover buy/sell signals are only used 
when a stock is actually trending. If the ADX is under 25, any crossover 
signals are ignored. The chart should be self explanatory - the large arrows 
are the DMI buy/sell signals. 
All indicators plotted here are using the MetaStock default period of 14 days. 
The performance of all these indicators is improved by using different periods, 
optimised for this stock. 

     Phaedrus.

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