Things to Use to Gauge Trend Instead of MAs (pics)

[metalhead 10]

First pic:

TSI (True Strength Index) smoothed with an EMA. Candles colored according to the slope of this EMA.

 

Second pic:

Accumulation/Distribution smoothed with an EMA. Candles colored according to the slope of this EMA.

 

Discuss.

 

edit - fixed attachments

Edited July 24, 2008 by metalhead

[BlowFish 10]

Personally I like plain old price action dull as that may be. With lower highs all the way across the chart there is no need to even look at the lows!

[fifty2aces 10]

Generally I prefer price action (HHs + HLs or LLs + LHs), but I think trying to come up with an indicator approach is interesting, especially if you're looking to automate.

 

The charts posted look pretty nice, but you've picked trending conditions, and the hardest thing about making a trend indicator is staying out of the chop, which yours doesn't really account for. Even in the charts posted, there are areas where it would make more sense to say the trend is sideways, rather than switching between up and down every couple of bars. I think this is the key to making a trend indicator - it shouldn't be binary (up or down), it should have three outputs (up, down, or sideways).

[MC 10]

I 2nd the trending remark, how does it look in chop?

The other thing I note...it looks too much like the price action itself. There's no discernible edge I can see, at least from the screenshots themselves. How does something that tracks the price action that close give you any early usable clues?

[metalhead 10]

I think this is the key to making a trend indicator - it shouldn't be binary (up or down), it should have three outputs (up, down, or sideways).

 

I agree. I'm trying to come up with something like this using an AMA which goes flat during choppy times.

[metalhead 10]

I 2nd the trending remark, how does it look in chop?

The other thing I note...it looks too much like the price action itself. There's no discernible edge I can see, at least from the screenshots themselves. How does something that tracks the price action that close give you any early usable clues?

 

I wasn't saying this is a system or anything. I was just sharing an idea that people may not have thought of since everyone seems to use MAs to trends.