Replies to post #3574 on MDA - Market Direction Analysis (MDA)

[Namiar]

Here is an Excel Spreadsheet testing a strategy for 2 years. I used the 5 EMA-26 EMA of (Nasdaq Up Volume/Total Volume).

Everytime Joe SixPack sees the above calculation hit -18% or lower, he buys QQQ in AH at the closing price for the day.
He stays in the position until the calculation oscillates back into positive terrtiory.

You may need to scroll to the right to see the colored columns where I calculate the 5-26 oscillator, total portfolio value and date.

It looks like a 17% portfolio gain after 2 years. There were 9 total "plays", with 8 being successful.

http://home.attbi.com/~whauck/augie_data.htm


Warpfactor

[augieboo]

Warp,

Up Volume/Total Volume, Down Volume/Total Volume and Up-Down Volume/Total Volume should essentially give you the same reading though. Correct??

Basically, but I think that the percentage version will give a more accurate representation of what's going on, especially over longer time frames.

Here's my latest experiment, which I call the PNPVO, (for Percentage Net-Positive Volume Oscillator).

Here's how I calculated it:

1. Find the Percentage Net Postive Volume (PNPV) for each day, i.e., positive volume / (positive v + negative v + unchanged v)

2. Find the 13 and 21 day SMA for the PNPV

3. Apply a bastardization of the formula for the PVO, i.e., PVO = (13-day SMA - 21-day SMA)/ 13-day SMA)

This gives results in percentage terms, which I like, but I'm not sure if my mathematical reasoning is sound, i.e., I'm taking percentages more than once. (Perhaps our resident mathematician, MM, would comment?)

Anyhoo, it draws a fairly pretty chart:




MDA Thread #board-1320
Turnips Thread #board-1125
Trading Info #board-1220

[MechanicalMethod]

Up vol = 60
Dn vol = 40

Total vol = 100

up/total = .6
dn/total = .4
(up-dn)/total = .2

I haven't followed the conversation about volume closely and I'm not qualified to offer anything other than a wild guess about the relationship of volume to price. That being said, volume is something I gave up on long ago but would like to study again. I think it has a lot of potential to add value to a signal. I have to find some time to actually do the studies instead of just talking about them.

Meanwhile I'm impressed with your initiative and between you and Augie I know something good can come out of this.

[MechanicalMethod]

I subtracted the 26-DMA from the 5-DMA

That convergence divergence is the basis for MACD. But thinking along those lines is cool because it's out of the box, off the wall, and upside down. All of those qualities are necessary in my opinion in order to find the true nature of price dynamics.

Keep experimenting.