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Registered User
Joined: 12/7/2004
Posts: 13
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The following comment relates to Worden note of 1/21/05 about ROH.
TSV for me is the toughest of the indicators to interpret. While TSV 18 shows a neg div "as bad as you'll ever see", TSV 28 and TSV 10 do not, although both are below the zero line. Changing periods and/or arith/log yields different results most of the time. In this ROH example, changing TSV 18 from simple to log eliminates the divergence. From the January low, TSV rises with price and actually hits the zero line on Jan.18. So which one do I use, simple or log? I've purchased the Worden CD on TSV and have reviewed that several times, but it also says to look at different time frames and look at both log and simple. As I said earlier changing these parameters gives different results. I suppose the answer to my question is to look at TSV along with the other indicators but TSV has so many variables that I tend to ignore it altogether. Another confusing thing for me is that the CD says to look at 2 day and larger time frames (I know that daily is better at spotting tops). Then a daily Worden note pops up about a stock with TSV 67 on a daily chart. 67???? Why not 68 or 65.2?? Those numbers will give different results. Any help on this would be greatly appreciated.
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Registered User
Joined: 1/1/2005
Posts: 2,645
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NICSTEF,
I have now concluded that by "changing ... arith/log", you are not changing Arithmetic Scale to Logarithmic Scale, you are actually changing Simple Moving Averages to Exponential Moving Averages. Am I correct?
Thanks,
Jim Murphy
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Worden Trainer
Joined: 10/1/2004
Posts: 18,819
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Changing the log/arithmetic only changes the right hand scale of the chart. It will change the LOOK of the averages in the same way it changes the LOOK of the price. It will NOT change the nature of how the averages are calculated.
- Craig
Here to Help!
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Worden Trainer
Joined: 10/1/2004
Posts: 18,819
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NICSTEF...
Did you get a chance to read my response on the similar post you made in the thread linked below?
http://www.worden.com/training/default.aspx?g=posts&t=1978
Changing from log to arith scaling IN NO WAY changes the pattern of TSV. Are you plotting the indicator in the top window and looking for how the price crosses the TSV line? Are you looking in the top window with TSV up there and noting if price is displayed above or below TSV?
If so, you cannot look at it this way. Price and TSV, when both in the top window, are on seperate scales. If you watch the TSV video again you will notice Mr. Worden keeps TSV in the lower windoe and looks at several things but not if TSV is above or below the price line.
- Craig
Here to Help!
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Registered User
Joined: 12/7/2004
Posts: 13
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Yes Jim, you are correct.
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Registered User
Joined: 12/7/2004
Posts: 13
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Craig:
I am not plotting price and TSV in the same (upper window). I have TSV in the lower window all by itself, TSV 18. When my choice is exponential, TSV rises as does price from the Jan low to Jan 18. When I change TSV to simple, TSV shows a divergence. Price is rising to Jan 18, but TSV is falling.
Nick
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Worden Trainer
Joined: 10/1/2004
Posts: 18,819
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The indicator will change if you have it exponential or simple for the averaging of TSV. You mention:
QUOTEchanging TSV 18 from simple to log eliminates the divergence
I took this as you changing the scale to logarithmic, not the averaging type. Now I understand.
Changing the averaging type will change how the indicator plots. Set the period of the TSV to '1'. This is the raw TSV calculated. When you set the period you are averaging the raw TSV. A TSV of 18 is the same as a TSV of 1 with a 18-day moving average added to it.
I was confused by the "log".
- Craig
Here to Help!
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Registered User
Joined: 12/7/2004
Posts: 13
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QUOTE (Craig_S) The indicator will change if you have it exponential or simple for the averaging of TSV. You mention: QUOTEchanging TSV 18 from simple to log eliminates the divergence I took this as you changing the scale to logarithmic, not the averaging type. Now I understand. Changing the averaging type will change how the indicator plots. Set the period of the TSV to Ƈ'. This is the raw TSV calculated. When you set the period you are averaging the raw TSV. A TSV of 18 is the same as a TSV of 1 with a 18-day moving average added to it. I was confused by the "log".
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Registered User
Joined: 12/7/2004
Posts: 13
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Sorry for causing the confusion Craig. I'm a math guy and have too many years of Arithmetic/Geometric and Logarithmic/Exponential floating around in my head. I was not changing the scale in the upper window, just the averaging type in the lower.
My problem still is which averaging type to use. The Worden note that I mentioned regarding ROH uses simple. Why wasn't exponential used which shows TSV rising while price also is. DW notes that the stock might have trouble holding its head above 40. Recall DW also said "as bad a TSV divergence as you'll ever see". It doesn't look that bad when exponential is used. ROH closed yesterday at 48.62, up from 42.40 on Jan 21. I guess it's just flip a coin.
Thanks for all your help. Your comments about raw TSV especially were very useful.
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Worden Trainer
Joined: 10/1/2004
Posts: 18,819
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Things like using simple vs. exponential is a personal preference. Why did Mr. Worden use simple? Only he can answer that. I would guess it is just what he prefers.
Exponential will put more weight on the more recent data, simple gives equal weight to all of the data points.
Which should you use?
Which makes more sense to you is the answer. Which looks 'better' to you.....?
Play around with different periods and averaging types. You will find yourself drawn, over time, to certain settings. You have to play with them to discover which fits you.
- Craig
Here to Help!
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