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If any of you have wondered what a Price
Distribution Analysis of
Swing legs versus Fibonacci lines from same legs
look like then
take a look at a couple of things BobR
sent to my SwingMachine list.
Thought some of you might find this
interesting.
Clyde
- - - - - - - - - - - - - - - - - - - - - - -
- - - - -Clyde Lee
Chairman/CEO (Home of
SwingMachine)SYTECH
Corporation email: <A
href="">clydelee@xxxxxxxxxxxx 7910
Westglen, Suite 105
Office: (713) 783-9540Houston, TX
77063
Fax: (713) 783-1092Details
at:
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--- Begin Message ---
To: "swingmachine" <swingmachine@xxxxxxxxxxxxxxx>
Subject: [SM] Swinging PDA vs Fib Retracements
From: "Bob R" <bobrabcd@xxxxxxx>
Date: Sat, 24 Apr 2004 06:41:47 -0700
Cc: "Richard Karst" <karstr@xxxxxxxxxxxx>, "trader" <tradern1@xxxxxx>, "Marver, Joel" <joel.marver@xxxxxxxxxxx>, "Don Thompson" <detomps@xxxxxxxxxxx>, "Timothy Morge" <tmorge@xxxxxxxxxxxxxxx>
Delivered-to: mailing list swingmachine@xxxxxxxxxxxxxxx
List-unsubscribe: <mailto:swingmachine-unsubscribe@xxxxxxxxxxxxxxx>
Mailing-list: list swingmachine@xxxxxxxxxxxxxxx; contact swingmachine-owner@xxxxxxxxxxxxxxx
Seal-send-time: Sat, 24 Apr 2004 06:41:47 -0700
This chart by no means is a longterm exhaustive study of the comparison
between Price Distribution vs Fibonacci Retracements. What had been of
curiosity when looking at fibs was how to know which level price is going to be
favored on a retracement. The reasoning was that a price distribution
might hold the key to probability of retracement level. With Clyde's
latest Swinging PDA this sort of thing can be examined. The attached chart
includes a long swing and some shorter swings with fib retracements and
extensions and one inclusive PDA. With swing S1-2 having been complete,
the question becomes where are the probable retracements. Fib fans would
say 0.382, 0.5, 0.618. PDA fans would say the Value Area High, Point of
Control, or Value Area Low. So what happened? After the swing high
completed at b price cycled around the VA High(yellow line) several times before
dropping all the way down to the Point of Control at point "A", virtually to the
tick. It did slow down as it approached 0.382 but passed through and
favored the POC!!! three times rather than the 0.5. The smaller swings
will have to be compared on a more expanded chart. Continuing with the
larger picture the retrace from S3 to S4 the 0.5 and 0.618 were spot on.
Down to S5 the S1-2 0.5 was essentially a hit. Then the retrace
to S6 was another bulleyes for the Value Area High on Thursday and
Friday. Obviously it would take more studies to conclude that Price
Distribution can be helpful in swingtrading, but from this and other charts I've
looked at, it appears that fibs and PDA can compliment each other quite nicely
for obtaining targets. An expanded chart will be looked at next to compare
the PDA and Fibs.
bobr
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--- End Message ---
--- Begin Message ---
To: "swingmachine" <swingmachine@xxxxxxxxxxxxxxx>
Subject: [SM] Swinging PDA vs Fib Retracements part2
From: "Bob R" <bobrabcd@xxxxxxx>
Date: Sat, 24 Apr 2004 08:49:08 -0700
Cc: "Don Thompson" <detomps@xxxxxxxxxxx>, "Marver, Joel" <joel.marver@xxxxxxxxxxx>, "Richard Karst" <karstr@xxxxxxxxxxxx>, "Timothy Morge" <tmorge@xxxxxxxxxxxxxxx>, "trader" <tradern1@xxxxxx>
Delivered-to: mailing list swingmachine@xxxxxxxxxxxxxxx
List-unsubscribe: <mailto:swingmachine-unsubscribe@xxxxxxxxxxxxxxx>
Mailing-list: list swingmachine@xxxxxxxxxxxxxxx; contact swingmachine-owner@xxxxxxxxxxxxxxx
Seal-send-time: Sat, 24 Apr 2004 08:49:08 -0700
This chart displays an expansion of the shorter swings on the previous
post in order to compare the PDA and Fib retracements. The PDA uses the
new input Unit4Accum(5) so that the Price Distribution Analysis is referenced to
market generated swings rather than user specified time intervals. This
isn't to say that one method is better than the other as each has utility
depending on the trading application. The daily interval and intraday
time intervals are quite useful as is the weekly. Those are also
input options for the new input, Unit4Accum. After looking at
numerous PDA Swing charts one thing becomes obvious, and that is the PDA
profiles tend not to have normal distributions over the swing as they may be
inclined moreso on daily profiles with intraday data. Rather, they
are either bimodal with a distribution near each end of the swing, or with a
single distribution near one end.
In this expanded chart S1-2 is again the reference swing. Its Fib and
PDA levels are extended into swing S2-3. The first reversal point in
the S2-3 swing was at the 0.5 extension at point "a". Then a retrace to b
occurred at the point of control extension. Then the swing ended on a move
to "c" at the 0.618 level of swing S1-2.
Now for Swing S3-4. First retrace was to point "d" at the point of
control extension for PDA in S2-3. Then a retrace to point "e" vaue
area high for PDA in S2-3. Then essentialy a single print drop to the
0.236 extension of S2-3 at point "f".
S4-5 started off with a 0.382 retrace to "g" whre it worked for two
days, then the ES jammed on up to "h" with two wide ranging bars and
paused at the control point for S3-4. Then it worked higher to point "i"
which we saw from the previous chart was a longer term VA High level. On
this chart "i" is also just below the 0.786 extension of S1-2. It is also
the 0.786 of swing S1 - S4. This was followed by a retest of the point of
control at point "j".
The PDA is an historical representation of price psychology, and with that
in traders' and computers' memories learning from the past can be applied
in the future. With its point of control and vahigh and valow projected
into the next swing, it can be a "leading" indication for reversal points that
does not replace, but compliments the use of fib retracements and other tools
like PitchForks, anytime you are looking for a high probability S/R level.
enjoy,
bobr
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