Replies to post #165 on VORTEX AIMing

[lostcowboy]

Hi Conrad, while waiting for Don to answer you. Have you looked at the TA indicator Williams %R. http://stockcharts.com/education/What/IndicatorAnalysis/indic_williamsR.html I believe the formula is what Don used, but don't use the negative sign. . As far as the midpoint that would be (High price- Low price)/2+ Low price. You could use the 20% and 80% as your bands, or some other percent. As I remember it Don's spreadsheet did not do anything when the stock went out of the bands. I think the hardest thing to determine will be the time period to use. I think one should look at a chart and add all the cycle's up and get a average and then divide by two . I think that would give you the proper period to use.

PS: What gave Don the Idea of using that formula was this web site. http://www.directinvesting.com/moneypaper/invest/index.cfm I asked Don's help in finding the formula, they were using.

[DonCarlson]

Hi Conrad,

Sorry for the delay in getting back to you. Just a few moments ago I was trying to respond, but the message seems to have disappeared. I'll see if I can recall my reply.

Incorporated in the ABCs spreadsheet are a couple different methods for utilizing trading range multipliers. With both methods the range is continually being adjusted as new prices becomes available, so the price can never trade outside the trading range.

The A-Factor uses an exponential function and behaves much like you describe in your method.

The C-Factor uses a different algorithm, but also provides results much like you describe in your method.

The ABCs spreadsheet allows you to test using the A-C-Factors independently or in combination. There are also some other multiplier methods incorporated in the ABCs spreadsheet which are not as highly correlated with your Trading Range Multiplier, but they can also be be tested independently or in combination with the A-C-Factors. The most current version of the ABCs spreadsheet is dated 2-14-03.

Best Regards,
Don Carlson