oscillator from MBA Thesis - Page 5

jjk2 · #41 (**permalink**) 11-21-2007, 06:04 PM

Quote:

The technical analysis-based indicator which was being descrlbed in
this thesls attempts to corne as an improvement on a battery of
alreadyexisting and well-known indicators: the Stochastic, the RSI,
the MACD, and the Momentum.

Each of the above-mentioned indicators - due to their design - have
instances during which they fail to generate accurate buy and sel1
signals. The Stochastic, for example, was designed to ideally trace a
sine-like curve, smoothly oscillating between a lower and an upper
boondary. In reality, however, the Stochastic often either ascends too
quickly ( Le. at a too steeper angle ) for a trading action to be
implemented, or, once ascended I descended, spends too much tlme
in an almost sideways state, languishing either at the bottom or at the
top of its trading range.

On the contrary, the RSI was designed in such a way as to generate
buy 1 seIl signals based on bullish and beatish divergences between
itself and the comrnodity's price. As a direct consequence of this, the
RSl's line usually traces a slowly sloping line ( Le. at an angle rarely
exceeding 10% ). Its plot, therefore, seldom finds itself in a potentially
useful overbought or ovenrold region. Ali-too-often, the RSI is found
vacillating in the middle of the trading panel, too high to be able to
initiate a safe buying signal, and too low to guarantee a tnistworüiy
selling signal.

However, the RSl's individual contribution to the timing of a trend is
quite signifmnt, as its line usually: generates a bullish divergence
right at the beginning of an upcoming significant bull market;
ascends in tandem with an important price rise; generates a bearish
divergence signaling a possible reversal of the trend; and, finally,
closely follows any major price decrease that the commodity under
observation may incur. Yoreover, the RSI can accurately register even
the most minute price oscillations in the underlying commodity to
which it is applied.

The Momentum behaves in a remarkably similar fashion with the RSI:
consequently, the reliability of its readings share many of the abovediscussed
strengths and weaknesses of the RSI.

The MACD, due tu its design based primarily upon Moving Averages,
tends to pertorm well when the market follows a welidefined and
rather lengthy price rise or descent: as is true with any Moving
Average-based indicator, the MACD fails to pick up minute price
oscillations, and acts rather confused when the commodity's price
incurs large swings that altemate in opposite directions.
The overall dependabllity of the four above-mentioned indicators is
negatively affected by the fact that - being al1 "price-based" in design

- excerpt from Technical Analysis Based Futures Trading System by Cerasella E. Aldea

either this pdf is corrupt or adobe is acting funny. some stuff is cut off it appears. but from my memory reading the paper, this is as close as the author got to explaning the formula. (yet no justfiication for mathmetical formula or derivation)

in terms of performing with other many indicators on forex-tsd:

yesterday i experimented with some of the non lagging moving average, jma, heiken ashi other trend indicators like brain trend.from my observation mba thesis thing, identifies buying and selling opportunities at least a bar ahead of one of the above mentioned indicators. they can be used as confirmation.

also, it appears usage of predtermined take profits is a viable solution to exit. its extremely difficult to decide when to exit. i think using heiken ashi or other xpma or nonlagma would be useful to see if price will move continually.

ocm1 · #42 (**permalink**) 12-27-2007, 03:51 AM

hi sirs,

i find out some bug. hope u can solve it ..

thank you

from ocm1

Quote:

Originally Posted by jjk2

UPDATE November 18, 2007

The MBA Thesis paper is finally available. plz send me a private message if you want the copy. if ur worthy i shall give u.

jjk2 · #43 (**permalink**) 04-07-2008, 06:26 PM

i will have look at this. altho i dont trade too much forex anymore./

jjk2 · #44 (**permalink**) 07-08-2008, 11:37 PM

for those of you continuing to pm me about this indicator. im just gonna say whats really on my minds, i apologize for not replying often. my last project was Boxplay - TWS API in Excel VBA

I have moved onto other stuff. i no longer actively daytrade. i focus on investments, security analysis, venture cap. its interesting googling mba oscillator thesis and see some of the responses on other forums.

here are my final thoughts:

after about a good 12 months on various forex forums, i realize 2 very important truths. evident by my lack of activity on any of the forums out there.

1) retail forex is fraud.
2) technical analysis without rigorous statistical approach is useless. the latter is useless as well.

Has the 12 months been a complete waste ? i was able to discover new things with computer, and learned about a whole different side of financial market. so its been all good.

what made me turn away from technical analysis is the sheer ignorance this field associates itself with. it reminded me of religion and myths.

In particular, this MBA oscillator what can I say, a big fraud. some of you have seen the paper. there is absolutely no math to back anything up in that paper. you have read the important excerpts i have posted. THAT is IT. there is NOTHING else on that paper that will ever explain why the hell the original student author would try combine RSI and macd together.

now before you flame me, think really carefully about what charting is. charting is dangerous because it makes you believe you have control, while you really dont.

good luck. out of the sample size of traders ranging in the tens of millions, there will always be a millionaire. you will look at him and say if i had the same traits, i can succeed.

they say the perfect slave is a man who thinks he is free.

nondisclosure007 · #45 (**permalink**) 07-09-2008, 07:44 PM

A little jaded?

I've been quite successful in technical trading in 4x. But then again, I always remember that there is only ONE truth about charts; charts are a GRAPHICAL REPRESENTATION OF VALUES, THAT'S IT! Your right, for those who think it is more, they shall fail. For those who remember this, they might succeed.

Quote:

Originally Posted by jjk2

now before you flame me, think really carefully about what charting is. charting is dangerous because it makes you believe you have control, while you really dont.

jjk2 · #46 (**permalink**) 07-14-2008, 01:51 AM

successful? how long is successful for you?

i am weary of such claims as this.

nondisclosure007 · #47 (**permalink**) 07-14-2008, 08:28 PM

3 years.
trades win/loss 1.03/1
USD dollars (profit) win/loss 401/1

Quote:

Originally Posted by jjk2

successful? how long is successful for you?

i am weary of such claims as this.

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