Thread: Digital Filters (basic explanation)
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Old 10-10-2005, 10:12 PM
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Main Principles for the Trading Algorithm Development Using the Digital Filters:

- Trade only in the direction of the prevailing tendency the direction of which is specified by "slow" adaptive trend line SATL;

- To consider dynamic characteristics of the "fast" and "slow" trend represented by the FTLM and STLM indicators;

- To use information on what area of the values (neutral, overbought, oversold, local maximum and local minimum) is the sum of prevailing market cycles (index of RBCI) in chosen by means of frequency range spectral analysis;

- To take oscillator signals as secondary ones in cases when trend indicators are evidence of the very marked bearish or bullish tendency availability;

- To take oscillator signals as main ones in cases when trend indicators give signals about absence of the very marked tendency;

- To use flexible system of protective stop orders based on the values of RBCI, PCCI indexes and volatility values of the "fast" market oscillations.
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