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dear all,
the better reference is sison's "beyond candlesticks"
i have used it together with my wave analysis all
these while - some excerpts from my articles in the
edge malaysia are included at
http://arifin600000.tripod.com
all the best, happy hunting with the mystical samurai
tools - mind you its as sharp as the samurai swords!!
arifin latif
"malaysiankgb"
--- Michael Simmons <mjsimmons@xxxxxxxxx> wrote:
> Hi Chandrashekhar
>
> Thank you for your response to my query reference
> three line break signals.
>
> You ask me: "could u please explain in details which
> 3 line break signal u want to explore ?"
>
> The signals I am intererested in are as described by
> Steven B. Achelis in his book:
> Technical Analysis from A to Z. (which is also
> reproduced in it's entirety on the web site
> http://www.equis.com/Education/TAAZ.
>
> I have reproduced the page on the three line break
> below:
>
> THREE LINE BREAK
>
> Overview
>
> Three Line Break charts display a series of vertical
> boxes ("lines") that are based on changes in prices.
> As with Kagi, Point & Figure, and Renko charts,
> Three Line Break charts ignore the passage of time.
>
> The Three Line Break charting method is so-named
> because of the number of lines typically used.
>
> Three Line Break charts were first brought to the
> United States by Steven Nison when he published the
> book, Beyond Candlesticks.
>
>
>
> Interpretation
>
> The following are the basic trading rules for a
> three-line break chart:
>
> a.. Buy when a white line emerges after three
> adjacent black lines (a "white turnaround line").
>
> b.. Sell when a black line appears after three
> adjacent white lines (a "black turnaround line").
>
> c.. Avoid trading in "trendless" markets where the
> lines alternate between black and white.
> An advantage of Three Line Break charts is that
> there is no arbitrary fixed reversal amount. It is
> the price action which gives the indication of a
> reversal. The disadvantage of Three Line Break
> charts is that the signals are generated after the
> new trend is well under way. However, many traders
> are willing to accept the late signals in exchange
> for calling major trends.
>
> You can adjust the sensitivity of the reversal
> criteria by changing the number of lines in the
> break. For example, short-term traders might use
> two-line breaks to get more reversals while a
> longer-term investor might use four-line or even
> 10-line breaks to reduce the number of reversals.
> The Three Line Break is the most popular in Japan.
>
> Steven Nison recommends using Three Line Break
> charts in conjunction with candlestick charts. He
> suggests using the Three Line Break chart to
> determine the prevailing trend and then using
> candlestick patterns to time your individual trades.
>
> Example
>
> The following illustration shows a Three Line Break
> and a bar chart of Apple Computer.
>
>
>
>
>
> You can see that the number of break lines in a
> given month depend on the price change during the
> month. For example, June has many lines because the
> prices changed significantly whereas November only
> has two lines because prices were relatively flat.
>
> Calculation
>
> Line Break charts are always based on closing
> prices.
>
> The general rules for calculating a Line Break chart
> are:
>
> a.. If the price exceeds the previous line's high
> price, a new white line is drawn.
>
> b.. If the price falls below the previous line's
> low price, a new black line is drawn.
>
> c.. If the price does not rise above nor fall
> below the previous line, nothing is drawn.
> In a Three Line Break chart, if rallies are strong
> enough to display three consecutive lines of the
> same color, then prices must reverse by the extreme
> price of the last three lines in order to create a
> new line:
>
> a.. If a rally is powerful enough to form three
> consecutive white lines, then prices must fall below
> the lowest point of the last three white lines
> before a new black line is drawn.
>
> b.. If a sell-off is powerful enough to form three
> consecutive black lines, then prices must rise above
> the highest point of the last three black lines
> before a new white line is drawn.
>
_______________________________________________________________________
>
> The signals that I wish to scan for are:
>
> The White Turnaround and Balck Turnaround as
> described above.
>
> Regards
>
>
>
> Mike Simmons
>
>
> ATTACHMENT part 2 image/gif name=243.gif
> ATTACHMENT part 3 image/gif name=244.gif
___________________________________________________________
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