|
PureBytes Links
Trading Reference Links
|
Hi Max,
The MS interpretation of Chande's VIDYA indicator can be found under the
built-in VMA moving average. HOWEVER, EQUIS BOTCHED THE WHOLE CONCEPT AND
IT IS COMPLETELY SCREWED UP!
To see what I mean simply plot a SMA, EMA, and the VMA of any security
using the same "period" input for each. Logically, the VMA should be the
most sensitive, almost hugging the price bars. But as you'll notice MS's
VMA is the least sensitive. In fact, it's downright dead!
Further, the fact that MS even asks for a "period" input for the VMA is
dumb, since the "period" by definition is supposed to be VARIABLE anyway.
The only inputs required under Chande's formula definitions are for the
"volatility index" and a scaling factor. MS says it has fixed these as the
9-period CMO for the index with a scaling factor .78, so no inputs should
even be required. Finally, a quick glance at the built-in formula given in
the manual shows Equis didn't even get the scaling factor part right.
Fortunately, the VIDYA is pretty easy to build and in MS 6.5 the new
"input" function lets you play around with the scaling factor without
rewriting the formual each time. Changing the period of the volatility
index doesn't affect the average significantly. Nor does using different
variables for the index. Afterall, it only varies from 0 to 1 anyway.
I've discussed this with Equis tech support when 6.0 first came out, and
they've recluctantly agreed the VMA might be implemented wrong but
suggested I contact Chande myself to check. Yeah, right! Too bad, because
the VIDYA concept minimizes the time lag problems of a crossover system,
and lets you grab more of a price move.
Hope this helps,
Rick Mortellra
Tokyo Japan
> ----------
> > From: Max Turner <m.turner@xxxxxxxxxxxx>
> > To: metastock-list@xxxxxxxxxxxxx
> > Subject: Vidya and other Chande/Kroll indicators
> > Date: Sunday, September 28, 1997 8:07 AM
> >
> > List'rs
> >
> > Has anyone programmed the indicators from Chande and Kroll's book (The
> New
> > Technical Trader) into Metastock formulae? In particular I am
interested
> in
> > VIDYA and the Stops indicator at the end of their book.
> >
> > Nowadays many authors give the formulae but in this interesting book
they
> > give the general formulae only.
> >
> > Would appreciate any replies.
> >
> > Thanks in advance.
> >
> > Max
> >
> >
> > K
> >
|