Replies to post #1605 on World Surveillance Group Inc (fka WSGI)

[lowtrade]

trimsprims

This maybe a good time for me to continue my post about "Multicollinearity", Anyone can't read more at the following link. About the most indepth explaination I found since the original post.

http://stockcharts.com/education/TradingStrategies/Multicollinearity.html

Technical indicators should be arranged in categories to keep from using too many from the same category. Here is a table that categorizes the indicators available at StockCharts.com:

Category
Indicators



Momentum

Rate of Change (ROC)

Stochastics (%K, %D)

Relative Strength Index (RSI)

Commodity Channel Index (CCI)

Williams %R (Wm%R)

StochRSI

TRIX

Ultimate Oscillator (ULT)

Aroon
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Trend

Moving Averages

Moving Average Convergence Divergence (MACD)

Average True Range (ATR)

Wilder's DMI (ADX)

Price Oscillator (PPO)
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Volume

Accumulation Distribution

Chaikin Money Flow (CMF)

Volume Rate of Change

Volume Oscillator (PVO)

Demand Index

On Balance Volume (OBV)

Money Flow Index
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The best way to quickly determine if an indicator is collinear with another one is to chart it. Make sure you have enough data on the chart to get a good indication. If they basically rise and fall in about the same areas, the odds are that they are collinear and you should just use one of them.