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PPO squeeze ADX Rate this Topic:
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danielfromcebu
Posted : Monday, March 18, 2019 9:24:26 PM
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Bruce, how do I write a PCF shown on my enclosed charts whereby the PPO and ADX makes a squeeze ...for all time frames...

Bruce_L
Posted : Tuesday, March 19, 2019 10:13:07 AM


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I don't know what PPO and ADX making a squeeze would be and the URL for your image is not publicly available on the internet. I think it is only accessible on your computer.



-Bruce
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danielfromcebu
Posted : Tuesday, March 19, 2019 10:28:29 AM
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Bruce PPO is like MACD..when you place the MACD as your indicator first and the ADX next it produces a squeeze when the price is oversold and the MACD starts to curve up while the ADX starts to curve down..I wish I could provide a picture but I don't know how...

Bruce_L
Posted : Tuesday, March 19, 2019 11:22:40 AM


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So is the ADX based on price or the PPO?



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danielfromcebu
Posted : Tuesday, March 19, 2019 11:29:13 AM
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Bruce it's all base on price..they are shown as two separate indicators...MACD on top and ADX in the bottom ... 

Bruce_L
Posted : Tuesday, March 19, 2019 11:45:56 AM


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PPO going up while ADX is going down would be something like:

XAVGC12 / XAVGC26 > XAVGC12.1 / XAVGC26.1 AND ADX14.14 < ADX14.14.1

I am not quite sure what you would want to use oversold (below zero (or some other arbitrary percentage) and/or below its moving average?), but if you just want to look for when either the PPO or ADX is first starting to change direction, we can add that.

XAVGC12 / XAVGC26 > XAVGC12.1 / XAVGC26.1 AND ADX14.14 < ADX14.14.1 AND (XAVGC12.1 / XAVGC26.1 <= XAVGC12.2 / XAVGC26.2 OR ADX14.14.1 >= ADX14.14.2)



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danielfromcebu
Posted : Tuesday, March 19, 2019 12:06:26 PM
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Thanks Bruce...Ill try it

danielfromcebu
Posted : Tuesday, March 19, 2019 12:55:02 PM
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Bruce tried both formulas and nothing comes out...

Bruce_L
Posted : Tuesday, March 19, 2019 1:04:33 PM


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That is kind of odd. I get 1159 symbols returning true for the first formula in US Common Stocks when set to a daily time frame and 307 for the second formula.

What WatchList are you scanning and what is the time frame?



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danielfromcebu
Posted : Tuesday, March 19, 2019 1:10:37 PM
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U.S. Stocks tried the Daily and 15 min and 5 mins....says there is an error

Bruce_L
Posted : Tuesday, March 19, 2019 1:30:45 PM


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Pleaes contact technical support.



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danielfromcebu
Posted : Tuesday, March 19, 2019 1:38:59 PM
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I'll copy and paste your formula and it works now...I did type it must myself...

Thanks

Bruce_L
Posted : Tuesday, March 19, 2019 1:58:16 PM


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You're welcome.



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Al_Gorithm
Posted : Tuesday, March 19, 2019 4:57:15 PM

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Hi Bruce,

Just dropping some 'squeeze talk' on you and anyone else that might be interested ... lol.

Lots of folks on the interwebs call it an 'ADX PPO Pinch" but plenty of others (including Wendy Kirkland) call it a 'Squeeze'.

The example below is pretty extreme (they're not always this obvious) but it's a good illiustration. If you plot the PPO in a pane directly above the ADX, the two plots will 'squeeze' (or pinch) together visually on a chart.

I just came across this thread ... will have to look at the PCFs later ... I've tried developing scans to identify this squeeze several times for Wendy in the past and wasn't quite able to nail it. It'll be interesting to see what Bruce's PCFs turn up.

I did, however, just recently develop a scan Wendy liked, which identified the last stage of a squeeze, which she calls a 'Sweet Spot' and is the subject of her latest book. It's not Carter's Sweet Spot, or anyone elses ... it's just her name for when the PPO plot and the ADX plot run in the same direction.

Wendy's been a StockCharts.com subscriber for years, and while she still uses it when shes writes, I was able to turn her on to TC2000 a couple of years ago. Loves TC2000 scanning. :)

Anyways, ... gotta go ... time to leave the office before rush hour.

Enjoy!

 

bcochrane
Posted : Tuesday, March 19, 2019 7:48:17 PM
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Al, thanks for your explanation. Based on your comments, I interpret tham to say we're looking for way oversold, but turning back up. I developed the following scan

  • PPO <0
  • PPO Cross up EAvg9
  • ADX New 10 day high
  • ADX > 20

Not exactly PCF syntax, but I suspect you'll get my drift. Today, the scan returns 13 possibilities from HC3000. I would defer to Wendy in that perhaps ADX criteria should be more than 20, and/or New high should be a longer period than just 10.

Any thoughts? Am I on the right track?

Al_Gorithm
Posted : Wednesday, March 20, 2019 8:57:42 AM

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Just grabbed coffee, so :) ...

I've read and exchanged emails with Wendy for years, but personally don't trade the ADX/PPO Squeeze, at least not yet. I'm more of a pullback guy, "buying dips" and "selling rips" until a trend is exhausted, and then I look for another opportunity.

A few thoughts ...

I've found Wendy's squeeze is like porn - hard to describe, but you'll know it when you see it. Lol. I'm only half-kidding. Wendy's a self-taught trader, and a visual person, and for years her only scans were "eyeball" scans. Even though I've developed a few scans for her, she still relies on her chart reading & experience. I'm just a newb and a software developer, so my mind works in algorithms (hence, the screen name) and scans and sorts and indicator parameters, etc.

That said, there are criteria to follow if you've read her stuff. She even breaks down the "lifecycle" of a squeeze into about a half-dozen or so stages: conception, birth, toddler, teen, adult (now commonly referred to as her "Sweet Spot") and expiration. The expiration of a bullish squeeze, btw, leads to the "conception" of a bearish squeeze ... Wendy trades both calls & puts.

I don't have my trading notes here at the office, but Wendy uses the PPO, ADX, +DI, and -DI to her lifecycle stages ... since I'm also a visual guy I created a spreadsheet matrix "cheat sheet" of all the stages and the criteria. Wendy liked it so much she included it in her just-published "Inevtiable Trend Moves" book. Even Wendy isn't fond of the title, lol ... think the publisher made that call. I personally think the word "inevitable" makes it sound like a get-rich-quick thing.

That book is only available on TradeWinds, I believe. But, ... Wndy also has a new book available on Amazon just published last month. I haven't seen it yet (getting my copy tomorrow) but it's a refresh of the original "Pink Book" she first wrote when she started trading for a living.

Hope that helps ... gotta run to a meeting. :)

Al_Gorithm
Posted : Wednesday, March 20, 2019 2:32:58 PM

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QUOTE (bcochrane)

Al, thanks for your explanation. Based on your comments, I interpret tham to say we're looking for way oversold, but turning back up. I developed the following scan

  • PPO <0
  • PPO Cross up EAvg9
  • ADX New 10 day high
  • ADX > 20

Not exactly PCF syntax, but I suspect you'll get my drift. Today, the scan returns 13 possibilities from HC3000. I would defer to Wendy in that perhaps ADX criteria should be more than 20, and/or New high should be a longer period than just 10.

Any thoughts? Am I on the right track?

Done with meetings, but in the middle of debugging some code. That said, I need a break to clear my head. :)

Yeah, if I had to describe the setup in one short sentence (for longs) it would be to identify tickers that were recently oversold (the more oversold the better) that are starting to turn back up. 

I didn't use parameters like "new 10 day highs" or "ADX > 20" in my scans, but that's not to say I'm right and you're wrong ... just different. As I metioned earlier, Wendy finds her trades with her eyeballs, so my scans were more like ...

  • Is the PPO rising? Falling? Has it just crossed its Signal Line?
  • Is the ADX rising? Falling?
  • Is the +DI above the -DI? Or vice versa?
  • Is the ADX above or below the +DI and -DI lines?

The different combinations/permutations determine what "stage in the lifecycle" the squeeze is in. 

I would experiment with the parameters and see what works for you. Everyone's different, and their mileage will vary.

If you're curious you can Google "Wendy Kirkland Automated Swing Trader" and it should pull up info on a MetaStock add-on she collaborated on for them. One of the links is a video where they pretty much explain the whole setup. But, ... the indicators are different - she uses the CCI in that one, and a few other differences, if I recall.

My point is there is more than one way to skin a cat, even for the same person. I can't speak for Wendy, but since she eyeballs her charts, I doubt she even uses the MetaStock add-on ... probably just a business deal.

If you've been to one of the TC2000 live classes the last few years, Michael Thompson tells a wonderful story relating eyeglass prescriptions to charts & layouts. I you and I swapped eyeglasses, neither one of us would see very well. :) ... same with charts, layouts, indicators, scans, etc ... everyone sees the market differently, so what works for Wendy may or may not work for you.

Hope that helps. Back to work. :)

 

bcochrane
Posted : Thursday, March 21, 2019 7:38:56 AM
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I under took the PCF development more as an intellectual exercise than anything else, also a bit to see if I could help Daniel, so I will continue to see how far I can take it.

Al_Gorithm
Posted : Thursday, March 21, 2019 8:28:05 AM

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Cool. Thanks. Good luck!

bcochrane
Posted : Saturday, March 23, 2019 8:47:51 AM
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FWIW I found a short Kirkland video describing this trigger, and while one example had more extreme numerical values than I have in my "draft" PCF, another had lower values. I'd leave them as they are to find candidates

Al_Gorithm
Posted : Saturday, March 23, 2019 11:10:34 AM

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Yeah, trading is definitely not a one-size-fits-all endeavor. :)

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