Registered User
Joined: 4/18/2005
Posts: 4,090
|
I've been noticing several charts lately where the BOP is almost reversed. For example HMY and I've seen others as well. But I thought for grins just to check what by BOP settings were (as a Technitrader student settings are standardized and sent out on a disk so we are all on the same page).... Any way it really seems to show the flush of selling at the valleys.. and I've seen other charts like this.
SO I invertend the colors of BOP and the chart LOOKED better. And I got to thinking about it a bit.. had to be careful not to trip... but if the big money comes from the market in being contrary in some form or another to the rest of the market then maybee there is a case for leaving these "Unique settings in place". I mean one reason it's so difficult for smart money to beat the market averages is because they are the market.. we are a part of that but I envision most of us as little critters skirting between the big bohemouths and out personal market foot print is not that great untill we start trading thousands of shares in a single clip. I could be wrong.
I have read that hedge fund managers often get huge returns.. but I know mutual funds tend to be a bit lack luster for my taste... however I underperformed my money market in 07'... so I guess it's all relative.
Anyway .. is it me or are there allot of charts that show Green BOP at the top of a run and Red BOP in the bottom. I think BOP is not very useful in general as a short term indicator.. it tends to shine more when viewed in a longer context, again .. my opinion.
|
|
Registered User
Joined: 3/21/2006
Posts: 4,308
|
Scott, You just gave a good lesson on how BOP is suppoesed to work. The reason it is green near the top of a run is because that is where most of the buying is taking place and red on the bottom because less buying is taking place (Possably even distribution). What purpose can be served by reversing the color patterns??
You are correct I would not use BOP as a short term indicator. TSV, and Volume are best for this in my opinion. When you see sporatic green BOP formations that rise and fall in conjunction with TSV spikes, but price is steady, then to me this is a sign of accumulation and is more of a longer term pattern.
|
|
Registered User
Joined: 4/18/2005
Posts: 4,090
|
QUOTE (Apsll) Scott, You just gave a good lesson on how BOP is suppoesed to work. The reason it is green near the top of a run is because that is where most of the buying is taking place and red on the bottom because less buying is taking place (Possably even distribution). What purpose can be served by reversing the color patterns??
You are correct I would not use BOP as a short term indicator. TSV, and Volume are best for this in my opinion. When you see sporatic green BOP formations that rise and fall in conjunction with TSV spikes, but price is steady, then to me this is a sign of accumulation and is more of a longer term pattern.
I think a person can trade ANY stock proffitably if they take the time to get to know it and become comfortable with it. All we need are price swings. the thinking here was that by reversing BOP colors its a bit of a contrarian thing for the short term. Then again I havn't found bop to be terribly valueable in most casess lately on the short term... on those few charts where it's obvious that it's working in reverse one could just make note of that. buy working in reverse it's picking up a mass of selling at that bottom and buying at the top....
In the end Bob can be verry erratic as an indicator.. which I guess is part of it's strength. I like it alot in up trends and bottoming markets.. but I'm thinking I need to ditch my knee jerk reaction of skipping a stock with red bop for the sake of the red bop. I've seen some nicely proffitable situations despite the bop.
|
|
Registered User
Joined: 2/26/2007
Posts: 4
|
Hi Scott,
I haven't posted in a while just trying to learn having finished the technitrader course. This chart is interesting (HMY) due to the fact that last friday the South African power was turned off to the three largest gold mines HMY being one of them. It is clear from the BOP that many are selling HMY. Also AngloGold Ashanti Ltd., Harmony Gold Mining Co. Ltd. and Gold Fields Ltd. suspended all but emergency operations. Not sure if you were aware of this so, pardon if this info is redundant.
|
|
Registered User
Joined: 3/21/2006
Posts: 4,308
|
Scott, you had better jump on your kayak and go down there to check out this disterbing chain of events. Just watch out for the Queen marry..
(I hope you know that I am just playing around, gotta have some fun)...
|
|
Registered User
Joined: 1/1/2005
Posts: 2,645
|
QUOTE (scottnlena) Anyway .. is it me or are there allot of charts that show Green BOP at the top of a run and Red BOP in the bottom.
Scott,
You might be interested in the BOP on the chart attached to PW's 01/30/08 note on BLUD. There is no scarcity of such charts.
Of course, if BOP was consistently wrong, it would be just as valuable as if it was consistently right.
Thanks,
Jim Murphy
|
|
Registered User
Joined: 2/13/2005
Posts: 368
|
QUOTE (bustermu) [QUOTE=scottnlena]Of course, if BOP was consistently wrong, it would be just as valuable as if it was consistently right.
Thanks,
Jim Murphy
That is the kind of indicators I look for, I look for correlation. If an indicator is wrong 90% of the time repeatedly, I can use the inverse of theat indication 
|
|
Registered User
Joined: 4/18/2005
Posts: 4,090
|
QUOTEIn the end Bob can be verry erratic as an indicator.. which I guess is part of it's strength. I like it alot in up trends and bottoming markets.. but I'm thinking I need to ditch my knee jerk reaction of skipping a stock with red bop for the sake of the red bop. I've seen some nicely proffitable situations despite the bop.
Who the heck is Bob? and why is he indicating so erraticaly?
sorry .. i'm realy trying to improve my typing and spelling.
|
|
Registered User
Joined: 4/18/2005
Posts: 4,090
|
QUOTE (sidewinder747) Hi Scott,
I haven't posted in a while just trying to learn having finished the technitrader course. This chart is interesting (HMY) due to the fact that last friday the South African power was turned off to the three largest gold mines HMY being one of them. It is clear from the BOP that many are selling HMY. Also AngloGold Ashanti Ltd., Harmony Gold Mining Co. Ltd. and Gold Fields Ltd. suspended all but emergency operations. Not sure if you were aware of this so, pardon if this info is redundant.
I was not aware of that..thanks. Shy of hiding in my basement with an aluminum foil hat I'm pretty out of the news loop. I don,t trade news and I didn't know they were a south american company. I"m not even shure who is wining the race for the presidential candidacy at this point. I know Obamma is irritating the hell out of me. Haven't heard his arguments yet but i've been invited to about a dozzen Obamma pep ralies.
It still makes me wonder why such selling in the heart of the valley and buying at the tip of the peak. I'm with Jim on this one.. if it would be consistant .. I'd just flip the colors and move on. Since we don't know how it's calculated all we can do is speculate about it. if we knew it was calculated from actual large lot transactions or something like that then we would KNOW that it's truely selling or buying. But BOP is affected by liquidity and is most likely another regurgitation of OHLC/VOL/Time displayed as a histogram There for prone to the same sorts of little errors and issues that the rest of indicators are. unless I missed some propoganda somewhere telling us other wise ?
|
|
Registered User
Joined: 1/1/2005
Posts: 2,645
|
Scott,
Thanks for your comments.
QUOTE (scottnlena) It still makes me wonder why such selling in the heart of the valley and buying at the tip of the peak.
For other users, it is obviously not buying and selling by "smart money" above, but buying and selling as indicated by BOP.
QUOTE (scottnlena) If we knew it (BOP) was calculated from actual large lot transactions or something like that then we would KNOW that it's truely selling or buying. But BOP is affected by liquidity and is most likely another regurgitation of OHLC/VOL/Time displayed as a histogram.
We know that BOP is not calculated "from actual large lot transactions or something like that" because that data is not available in TeleChart. It is calculated from the O,H,L,C,V time series because that is all that is available for such calculations.
As far as liquidity is concerned, if we multiply volume by 10 and divide prices by 10, BOP is unchanged. This can be seen by simultaneously observing the plots of SP-500 and SPY prior to 02/01/93.
I know very little about BOP, but it is quite obvious that 16 day intervals are significant. If we overlay BOP with a Custom Indicator:
Center Zero Line: checked
Smoothing Average: 16 Simple
Indicator Formula:
V*(C-C1)
it will, at times, bring out the significance of 16 day intervals.
I do not know why "smart money" would tend to buy (or sell) for 16 day intervals?
Thanks,
Jim Murphy
|
|
Registered User
Joined: 4/18/2005
Posts: 4,090
|
QUOTE (bustermu)
I know very little about BOP, but it is quite obvious that 16 day intervals are significant. If we overlay BOP with a Custom Indicator:
Center Zero Line: checked
Smoothing Average: 16 Simple
Indicator Formula:
V*(C-C1)
it will, at times, bring out the significance of 16 day intervals.
I do not know why "smart money" would tend to buy (or sell) for 16 day intervals?
Thanks,
Jim Murphy
My TC is closed for the moment so I can't check out the indicator on BOP. The 16 day interval thing is interesting. I'd imagine it has somethign to do with mutual fund charters for adding new positions or it could by some anomolous noise that looks signifficant..... of course if it's signifficant it's signifficnt reguardless if wether or not we know the reason.
I've noticed that frequently BOP aplied to the indexes .. while it usually never triggers when it does is best read in the inverse.... Bop in deep declines tends to herald a reversal ..... NOt alwayse and not right then obviously. So my bigest contentino with BOP is that Technitrader presents it like a great indicator designed to uncover "INstitutional Activity"... but really it's just another damned indicator and subject to all the same potential innacuracies as all other indicators despite the fact that it's PROBABLY a mathematical aproach to a logical question that makes assumptions that may or may not be accurate.
I use BOP .. don't get me wrong.. I love it.. but I don't swear by it. given it's tendancy to aparent random and uncorrelated appearence on charts not knowing exactly what and how it's calculating it is IMO a considerable disadvantage.
I didn't intend this thread to turn into a BOP bashing fiesta. simply I recognize that either 1) if it's functioning, it's catchign buying and selling and that fact alone need to be read from a distance and considered in contest. OR 2) it may for some reason backfire on ocassion. Technitrader teaches that on super small cap stocks average traders that trade larger lots can trigger it ... so it's to sensitive. On large cap "Bluechip" stocks it tends to not be reactive enough as the number of shares dilutes it's ability to "detect". and it there for neede massive buying and selling to show up. I would guess this is the reason that bop some times seem to be incycle with the stock but out of cycle of how you would thinkg it's read. so looking for RED bop is what is wanted verses looking for green BOP. So if you looking at a recent decline that is part of a previous down trend or any other trend for that matter and begin to find BOP... i'm not certain it's necessary for it to be GREEN or RED for a considerable signal to be given. Because if it accepted that during declines panic selling escelates to exhaustion and rallies eventually exhaust but have some of the most absurd and speculative buying then you have a case for using BOP in a manner in which one might think is counter intuitive... IE: Sell oportunities at advances ith Green bop and consider buy oportunities after declines and Red BOP.
However there are also many charts when BOP is read in a longer term time frame and it highlights good bottoming formations in the process. the of course you want to look for green BOP.
I the end the only real point is that BOP needs to be taken with a grain of salt and considered what the message is that is being given, and is it an accurate message. The second we can't truely ever now but we can make the assumption that it's "doing it's Thing" just as Stochastics or Macd does. What it's thing is is the question then.
ANy maybee I should re read the basic info on BOP as I may have forgotten something. Or consider getting the video on BOP.
Thats enough ramble.
Scott.
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
"Who the heck is Bob? and why is he indicating so erraticaly?
sorry .. i'm realy trying to improve my typing and spelling."
------------------------------------------------------
I put my post as an email first. that allows use of the
spell checker.
I also still have it. Should the post not take.
Thanks
diceman
|
|
|
Guest-1 |