Here's something that was on a mail list yesterday. Ross's techniques are valid but his congestion definition is just a small part of it, actually something most people would overlook. From past reading I believe 4 consecutive bars of (opens or closes) within the range of any 1 bar is how Ross defines congestion. That same definition can be changed slightly to indicate trend. For instance the length of a series where either the open or close is beyond the range of the previous bar is an indication of trend strength or weakness.
Here's the congestion code below. I'd rather write something mself than figure it out but will probably look to it for ideas if and when I get around to it. Over the years I've saved tons of this stuff but like I said earlier I don't look back at much of it ...but sometimes it's a handy reference, so I always save it.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~`
How do I turn this code into a flag which prohibits trades? This is the
Ross Congestion paintbar.Thanks in advance.
Inputs:Option(1);
Vars:x(0),Counter(0),BarBack(0),Str("");
Counter=0;
For x=0 to 3 begin
If Option<=1 Or Option3 then begin
{Refer the closes in
the condition}
If (C[x]=L[BarBack]) and (C[x]<=H[BarBack]) then
Counter=Counter+1;
end;
If Option=2 then begin
{Refer the opens in the
condition}
If (O[x]=L[BarBack]) and (O[x]<=H[BarBack]) then
Counter=Counter+1;
end;
If Option=3 then begin
{Refer both in the condition}
If (C[x]=L[BarBack]) and (C[x]<=H[BarBack]) and
(O[x]=L[BarBack])
and (O[x]<=H[BarBack]) then Counter=Counter+1;
end;
end;
If Counter=4 then begin {If the condition is
true
plot the congestion
bars}
For x=0 to 3 begin
Plot1[x](H[x],"H");
Plot2[x](L[x],"L");
end;
end;
If Counter=4 then Barback=BarBack+1 else BarBack=4; {If the
condition
is true use the engulfing bar as reference}
