AI
Friday, October 22, 2004 10:59:10 PM
AROON SETUP POST 1.............
Much of the time you will see my posted stock charts offer the below collection of studies: Aroon20; %r14; cci14; ss9-3; macd8-17-9; adi. There are multiple reasons for this particular combination, but this Aroon setup is one. This single post describes the basic signal for the Aroon setup. Some of you have seen or heard me discuss this, but probably not to the extent afforded the next day or two.
Of course, this setup has relative consequences. That is, a 60 minute chart lends rewards different than a daily chart, and so on. At the same time, users will often note the setup dominoes upward through chart durations. If a signal is realized in the 60 minute chart, the chances are fair to good it will be realized in the daily chart as well. Therefore, the scope of the trade can be weeks to months and perhaps longer using weekly or monthly charts.
The template uses three basic studies: aroon20, %r14, and macd8-17-9.
The basic signal is an aroon intersection; a %r crossover of -50; and a macd intersection on the same trend side of zero or a crossover of zero. All of these events MUST be in the same direction of trend and synchronized in time by no more than 6 periods (fewer if possible).
I have developed a few filters that improve the the setup accuracy. Some of those will be introduced later. I have written some advanced scans for StockCharts.com that I will share later too.
Below are two long signals for a cheapie, ASTM. You can see the better synchronized event produced more than the other. This topic is discussed in my book btw. If you don't know me, you need know now I am a huge proponent of synchronous events.
Anywho....... Here is the first offering of a mini-series on the aroon setup.
Much of the time you will see my posted stock charts offer the below collection of studies: Aroon20; %r14; cci14; ss9-3; macd8-17-9; adi. There are multiple reasons for this particular combination, but this Aroon setup is one. This single post describes the basic signal for the Aroon setup. Some of you have seen or heard me discuss this, but probably not to the extent afforded the next day or two.
Of course, this setup has relative consequences. That is, a 60 minute chart lends rewards different than a daily chart, and so on. At the same time, users will often note the setup dominoes upward through chart durations. If a signal is realized in the 60 minute chart, the chances are fair to good it will be realized in the daily chart as well. Therefore, the scope of the trade can be weeks to months and perhaps longer using weekly or monthly charts.
The template uses three basic studies: aroon20, %r14, and macd8-17-9.
The basic signal is an aroon intersection; a %r crossover of -50; and a macd intersection on the same trend side of zero or a crossover of zero. All of these events MUST be in the same direction of trend and synchronized in time by no more than 6 periods (fewer if possible).
I have developed a few filters that improve the the setup accuracy. Some of those will be introduced later. I have written some advanced scans for StockCharts.com that I will share later too.
Below are two long signals for a cheapie, ASTM. You can see the better synchronized event produced more than the other. This topic is discussed in my book btw. If you don't know me, you need know now I am a huge proponent of synchronous events.
Anywho....... Here is the first offering of a mini-series on the aroon setup.
There comes a time when you define the moment, or the moment defines you. - Tin Cup
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