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Paul,
Gladly! The spread is the PDI or positive directional index minus
the negative directional index or MDI. The result is an oscillator
which reflects the overall movement of prices, positive or negative.
Now, consider the type of signals we can get from such an
oscillator. We are looking at an oscillating sine wave. We have the
extremes and the obvious midpoint. We could trade the extremes which
is what you are doing with the binary or just from the midpoint. I
think the deciding factor is the overall length of the trend.
Shorterm the extremes might be better to trade from. Longterm the
midpoint might be a better way to trade. Using this for exits though
is a bit more precise.
Something to remember is that if you are in a longterm upward trend
you definately would not want to be in the trade if you had a
negative midpoint signal. Its like setting an exit point that says
there is no doubt that we are going negative so its time to get
out...a last chance warning.
The main reason I posted the indicator with the binary signals on it
was so you would have something to compare the binary wave to. Its a
very interesting concept.
Hope this helps,
Preston
--- In equismetastock@xxxxxxxxxxxxxxx, "Paul Harris"
<paul_vicmar@xxx> wrote:
>
> Preston
>
> In a previous message you mentioned the spread:
>
> "Most of the sell signals now are good with the exception of 1
which
> occurs when the spread is negative which should not be used."
>
> and in the last message:
>
> "Look at June 2006. The spread had already gone negative and again
we
> are almost on top of the next entry."
>
> I am not too sure what you mean when you say the spread had gone
> negative. Could you explain.
>
> PAUL
>
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