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Registered User
Joined: 6/24/2005
Posts: 38
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I have done a huge amount of searching in these forums and learned (stolen?) a great deal of information about wirting PCFs to come up with the following.
I set out to write a PCF (or custom indicator) to give buy signals based on Elder's tripple screen system (at least the first two screens). I decided to trigger a buy signal when the weekly MACD (12,26,9) was negative and rising (i.e. "Spring") and when the 2-day EMA of the Force Index is negative (essentlally Elder's criteria).
Here are the formulae I used:
Weekly MACD Histogram
2.19608*XAvgC45 - 2.66667*XAvgC60 + 0.470588*XAvgC130
Weekly MACD Histogram 5 days ago
2.19608*XAvgC50 - 2.66667*XAvgC65 + 0.470588*XAvgC135
The slope is obviously just the difference between the two, so ...
(2.19608*XAvgC45 - 2.66667*XAvgC60 + 0.470588*XAvgC130) -
(2.19608*XAvgC50 - 2.66667*XAvgC65 + 0.470588*XAvgC135) > 0
I recoginze that this is not truly a weekly MACD histogram, but I think it still meets Elder's intent of looking at one time frame longer than the Force index signal.
Now make sure that the MACD hist is negative.
2.19608*XAvgC45 - 2.66667*XAvgC60 + 0.470588*XAvgC130 < 0
The add the two period EMA of Force Index:
((C-C1)*V + 1/3*((C1-C2)*V1 + 1/3*((C2-C3)*V2 + 1/3*((C3-C4)*V3 + 1/3 * ((C4-C5)*V4 + 1/3 * ((C5-C6)*V5)))))) / (3/2 - 1/2*(1/3)^5) < 0
Put it all together:
(2.19608*XAvgC45 - 2.66667*XAvgC60 + 0.470588*XAvgC130) -
(2.19608*XAvgC50 - 2.66667*XAvgC65 + 0.470588*XAvgC135) > 0
and
(2.19608*XAvgC45 - 2.66667*XAvgC60 + 0.470588*XAvgC130) < 0
and
((C-C1)*V + 1/3*((C1-C2)*V1 + 1/3*((C2-C3)*V2 + 1/3*((C3-C4)*V3 + 1/3 * ((C4-C5)*V4 + 1/3 * ((C5-C6)*V5)))))) / (3/2 - 1/2*(1/3)^5) < 0
Revesing the <> wold give sell signals. I plotted both buy and sell signals using a % true custom indicator (buy green and sell red) and got some interesting results when I scrolled back throught some charts (obviously keeping in mind the third screen  ).
Any thoughts on the method or on the PCFs? I am looking for a relatively mechanical system to trade with while I learn discipline and money management. Once I am convinced that I can be trusted, I will move on to more sophistocated trading techniques.
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Registered User
Joined: 10/14/2005
Posts: 33
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puckster,
For the past 8 months, I have used the Elder 3 screen setup for daytrading very successfully. He uses a shift -3 3 EMA, a 5 SMA and a 13 SMA with the corresponding Stochastics.
Any thought on interpolating your formulas for intraday trading?
Thanks,
Craig
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Registered User
Joined: 6/24/2005
Posts: 38
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I don't do intraday trading, so I'll defer judgement to those more knowledgable, but it doesn't seem to me like the daily data available to PCFs would be useful for day trading.
I am interested to hear about anyone's success with various indicators and the triple screen method. Particluarly for short- to medium- term trades (several days to weeks).
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Registered User
Joined: 10/14/2005
Posts: 33
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I have not used his methods for swings but I have observed that my settings give signals for daily setups.
Thanks for the reply.
Craig Hardison
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Registered User
Joined: 6/24/2005
Posts: 38
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Oops! Found an error in my previous post (a most embarassing one, no less!). The formula for last MACD Hist one week ago was wrong and should be:
2.19608*XAvgC45.5 - 2.66667*XAvgC60.5 + 0.470588*XAvgC130.5 here is the rest of the formulae with it this error corrected:
2.19608*XAvgC45 - 2.66667*XAvgC60 + 0.470588*XAvgC130) -
(2.19608*XAvgC45.5 - 2.66667*XAvgC60.5 + 0.470588*XAvgC130.5) > 0
Now make sure that the MACD hist is negative.
2.19608*XAvgC45 - 2.66667*XAvgC60 + 0.470588*XAvgC130 < 0
The add the two period EMA of Force Index:
((C-C1)*V + 1/3*((C1-C2)*V1 + 1/3*((C2-C3)*V2 + 1/3*((C3-C4)*V3 + 1/3 * ((C4-C5)*V4 + 1/3 * ((C5-C6)*V5)))))) / (3/2 - 1/2*(1/3)^5) < 0
Put it all together:
(2.19608*XAvgC45 - 2.66667*XAvgC60 + 0.470588*XAvgC130) -
(2.19608*XAvgC45.5 - 2.66667*XAvgC60.5 + 0.470588*XAvgC130.5) > 0
and
(2.19608*XAvgC45 - 2.66667*XAvgC60 + 0.470588*XAvgC130) < 0
and
((C-C1)*V + 1/3*((C1-C2)*V1 + 1/3*((C2-C3)*V2 + 1/3*((C3-C4)*V3 + 1/3 * ((C4-C5)*V4 + 1/3 * ((C5-C6)*V5)))))) / (3/2 - 1/2*(1/3)^5) < 0
Sure am glad I caught that before one of the Jim's did.
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Registered User
Joined: 7/26/2005
Posts: 109
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I can not get this indicator to work. Can you
give more info on how to set it up.
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Worden Trainer
Joined: 10/1/2004
Posts: 18,819
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You need to create a CUSTOM PERCENT TRUE indicator in order to follow the poster's idea. Here is a video featuring the CPT.
Visually Backtesting Specific Symbols
- Craig
Here to Help!
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Registered User
Joined: 3/24/2005
Posts: 40
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Puckster, are you looking for buy signal on the weekly charts?
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