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How do you define "Bullish"?


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  #11 (permalink)
 
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 Fat Tails 
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sptrader View Post
Fat Tails - I find this interesting and I want to plot it in MC...your bullpower formula is " obtained as High[0] - EMA[0]"..

I know that H[0] is the current High (at least in MC it is) but what is the EMA[0] ? is it the current EMA of the highs ?

Sorry for not being explicit. The EMA is the current EMA of the closes with a period as selected.

You may also use the EMA of the median prices or the EMA of the typical prices. But you would certainly not use the EMA of the highs, as that would favour the bears.

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  #12 (permalink)
 
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 RedK 
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great feedbacks.. thanks all, love the defend territory concept (bear's vs bull's)

and yes, absolutely, bullishness would be period-relative. a stock can be bullish for the current short period (say 3 weeks or even 3 hours) but bearich from a longer timeframe perspective. i plan to build this into whatever bullishness indicator we settle on, so you can adjust the lookback periods (fast, slow or short vs long) and have the indicator calculate the relative bullishness.

@FatTails, idealy we would need to combine more than one view in the indicator. your view can be one: High[x] - EMA[x], where x is a short period (or # of periods).. calculate a bullishness component of it (say C1), then combine that with other bullishness compoenets (C2, C3, ..), give arbitrary weight to each (optional). i believe doing so, we can integrate "important factors affecting price behavior and bullishness - producing a generic final "bullishness index", that we can then use across different stocks/ETFs/Futures as a relative indicator of strength for the selected period..

hope i can interpret this mathematically correct.. the formula would be something like:
Bullishness Factor = (C1 * W1 + C2 * W2 + C3 * W3 ... Cn * Wn) / (Sum W's)
n is number of "components" of the index

simple form if all components have equal weights would be
Bullishness Factor = (C1 + C2 + C3 ...+Cn) / n
result then would be converted to a % index (from -100% to 100%)

here's a screenshot that may illustrate this better. in this attempt, i use a combination of FatTail's concept + an RSI score combined at equal weights. i used a very bullish and very bearish (IMHO) stocks, period 20 days (almost a trading month), looking at a full year. see how this test "bullishness Index" plays when compared to the regular RSI set for same period (20 days).. a crossing of 0 (the blue line) acts as a promising entry signal ..


more food for thought... all contributions appreciated,
RedK

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  #13 (permalink)
 
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 Fat Tails 
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RedK View Post
great feedbacks.. thanks all, love the defend territory concept (bear's vs bull's)

and yes, absolutely, bullishness would be period-relative. a stock can be bullish for the current short period (say 3 weeks or even 3 hours) but bearich from a longer timeframe perspective. i plan to build this into whatever bullishness indicator we settle on, so you can adjust the lookback periods (fast, slow or short vs long) and have the indicator calculate the relative bullishness.

@FatTails, idealy we would need to combine more than one view in the indicator. your view can be one: High[x] - EMA[x], where x is a short period (or # of periods).. calculate a bullishness component of it (say C1), then combine that with other bullishness compoenets (C2, C3, ..), give arbitrary weight to each (optional). i believe doing so, we can integrate "important factors affecting price behavior and bullishness - producing a generic final "bullishness index", that we can then use across different stocks/ETFs/Futures as a relative indicator of strength for the selected period..

hope i can interpret this mathematically correct.. the formula would be something like:
Bullishness Factor = (C1 * W1 + C2 * W2 + C3 * W3 ... Cn * Wn) / (Sum W's)
n is number of "components" of the index

simple form if all components have equal weights would be
Bullishness Factor = (C1 + C2 + C3 ...+Cn) / n
result then would be converted to a % index (from -100% to 100%)

here's a screenshot that may illustrate this better. in this attempt, i use a combination of FatTail's concept + an RSI score combined at equal weights. i used a very bullish and very bearish (IMHO) stocks, period 20 days (almost a trading month), looking at a full year. see how this test "bullishness Index" plays when compared to the regular RSI set for same period (20 days).. a crossing of 0 (the blue line) acts as a promising entry signal ..

Attachment 82644
more food for thought... all contributions appreciated,
RedK

Yes, there is a million ways to define bullish, and it is easy to create a whole flock of bullishness indicators to tantalize price. What counts in the end is the results it may generate.

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  #14 (permalink)
 
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 RedK 
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thanks FatTails. that's understood. we shouldn't try to re-invent the wheel here. if the group thinking can yield a new idea that can improve the way we trade and the results that would be great, otherwise, we stick to what we have today, if everyone believes it can't get better.

here's a different take on this, in one's regular chart setup, you would have few indicators that you trust, BB, some MAs, Oscilators, leading, lagging, ..etc.. that when align somehow, you get your signal and say "ha! now it's going up and time for me to jump in" .. these are your definition of bullish (on that timeframe you're looking for, which may be 2 hours using a 1 min chart, or a year using a daily chart). what are these ?

i got this from an article on trading on MA's: a Bullish is expected when 3 MA's of different length "align together" in that perfect order (fast-med-slow), AND the price average (HL2) or close at least 3 times above fastest ones. so we have:
  • EMA20 crosses above EMA40 AND
  • EMA10 crosses above EMA20 AND
  • Price Close (or HL2) keeps above EMA10 (position within a HiLoChannel)

again, this is only based on price. and what you would do is plot all these EMA's on the chart and watch them until you spot an alignment. if we put these in a formula (indicator), we have it calculate this for us, while the chart can be free from all these EMAs, to look at or to plot something that adds even more perspectives on it.

so what's your favourite bullish setup? can you express in 1, 2, 3 like above?
RedK

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  #15 (permalink)
 
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 Fat Tails 
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RedK View Post
thanks FatTails. that's understood. we shouldn't try to re-invent the wheel here. if the group thinking can yield a new idea that can improve the way we trade and the results that would be great, otherwise, we stick to what we have today, if everyone believes it can't get better.

here's a different take on this, in one's regular chart setup, you would have few indicators that you trust, BB, some MAs, Oscilators, leading, lagging, ..etc.. that when align somehow, you get your signal and say "ha! now it's going up and time for me to jump in" .. these are your definition of bullish (on that timeframe you're looking for, which may be 2 hours using a 1 min chart, or a year using a daily chart). what are these ?

i got this from an article on trading on MA's: a Bullish is expected when 3 MA's of different length "align together" in that perfect order (fast-med-slow), AND the price average (HL2) or close at least 3 times above fastest ones. so we have:
  • EMA20 crosses above EMA40 AND
  • EMA10 crosses above EMA20 AND
  • Price Close (or HL2) keeps above EMA10 (position within a HiLoChannel)

again, this is only based on price. and what you would do is plot all these EMA's on the chart and watch them until you spot an alignment. if we put these in a formula (indicator), we have it calculate this for us, while the chart can be free from all these EMAs, to look at or to plot something that adds even more perspectives on it.

so what's your favourite bullish setup? can you express in 1, 2, 3 like above?
RedK


My favourite bullish set ups:

(setup 1)

- yesterday's price (VWAP) was slightly above the VWAP from the day prior to yesterday
- today's price starts above yesterday's VWAP and retraces to the value zone between the two VWAPs or the pivot range
- I get a bullish signal from an oscillator

(setup 2)

- 2B pattern, alternatively first lower high or higher low

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  #16 (permalink)
 
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 RedK 
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thanks FatTails .. another great concept.. i haven't played much with VWAP so will put this on the "parking lot" for now..

here's a test study for TOS of the concept from my previous post on the 3 MA's, mixed with FatTails concept of Bulls vs Bears each defending their territories. don’t believe this represents “Bulllishness”
since it only represents pure price action and doesn’t take relative momentum or velocity or volume or any of these concepts that IMHO should be incorporated to express bullishness, so I just call it a “Trender” .. it’s like a step in the way.. in parallel I’ll give Bullishness more thoughts and await more feedback from more experienced traders than myself.

so it's like the first outcome of this "brainstorming thread", if you’re on ToS and like to experiment with new technical trading concepts, pls feel free to test this “Trender” and provide feedback until we’re happy with it and will post a final version to download section. it’s an open invite for the curious ones
https://nexusfi.com/download/vip_elite_circle/1237-download.html?view

in this Trender, we have 3 types of Bulls & Bears fighting to control the price :
  1. Weak Bull: when the price (close, HL2, HLC3) closes above fast EMA
  2. Med Bull: the Fast EMA crosses above the EMA of Length (Weak Bull already happened)
  3. Strong Bull: the price EMA of Length crosses above slow EMA (earlier bulls already in)

then you have the reverse for Bears ..
some visualizations added (slices, vertical lines) to "tell the story". I’m a fan of visualizations and colors as you can see . not for the beauty, but I believe that’s THE KEY that enables you to make a quick decision without having to view a jungle of candles & moving MA’s on a chart..

Trender itself is the average score of price compared to Hi/Lo MAChannel of fast length, and fast compared to Hi/Lo MAC of length, and length compared to Hi/Lo MAC of slow. so when you have an up-trend making that "perfect alignment" of price vs the MA lines, your score will be > 33 , and a perfect bearish alignment is below –33. this middle area is like a “no trend zone”.. but it’s so interesting to see the vertical lines (bulls & bears) as they come in and control the action into different slices..

Some scnarios where this Trender can be useful:
1 - identify a retracement vs a reversal (in strong bull territory, going back up, you can add to position) and keep riding the trend as it continue up, if you see the other guys coming in, then a reverse is soon, and you can exit (i was looking for an indicator for that)
2 - confirm a trend to ride
3 - ...others?


the code is documented if you like to follow the calc flow.. and provide feedback.
you enter a single Length or Period, fast is half of that, and slow is double. default is 20 period. change aggregation from the chart. HMA is used for smoothing. 3 default to avoid side-effect of too much lag.




pls keep your feedback going. both on the experimental Trender, and the Bullish setup. I’m sure the experience sharing will benefit everyone gain some new perspectives. no one has it all.

all the best,

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  #17 (permalink)
 
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 RedK 
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sorry if i forgot to mention, i have updated the "K_Trender" during the weekend to fix a typo, and add a weight for the fast price change.. i came to love that indicator and would love to hear feedback from ToS users on the forum who care to test it. the visibility of bears vs bulls of different strength, coming in to control & impact price action, and how the price responds is showing nicely, like a story. when it's used along with other indicators (like ADX/DMI or Momentum), adds a lot of clarity to price moves & trend (or trend-ending) prediction - it should come useful for stock, futures and forex (i think!) .. and different timeframe.

the update is posted on the same link (above post). found no need to keep the previous version.

further thought on original topic "bullish". to define "bullish" is like someone asking you to define "fast" or "speedy", right? we will need a reference, a known object that travels at a certain speed, so we can say "this thing is faster or slower by that much". the closest thing that came to mind is MACH (speed of sound).. where we can say " this plane travels at MACH 1 speed" or "car runs 0.8MACH" and so on. with this approach we don't need to go down the route of redefining units of distance, time.. etc

so i'm taking the concept forward in that direction. i'll try to research, in a practical and simple way, how to compare a stock moving up or down during a certain timeframe, with the most bullish/most bearish known ones.. and see where this takes it. don't want to burden the forum with what may seem to some as an academic discussion (not my intention - my goal is a simple view that makes me trade better and not lose good trends in the future), so if you're interested in this and curious to see how it plays out, pls PM. you don't need to know how to write ToS scripts, just curious enough to test a new indy. if you like ToS scripts on the other hand, i promise we'll have some fun with the thought exchange

all the best,
RedK

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  #18 (permalink)
 
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 RedK 
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no.. "bullish" is not "fast". it's more to do with price "relative position" to where is used to be in the past .. where each of us will have a different "past" to consider depending on the type of trader and time frame considered... with that thought, i'm back to pursuing "trend identification and capture", while i settled on something else for "Bullish" by calculating a score of net Relative Strength between a short and long periods..

with that, i have update my KR_Trender "or Rainbow_Trender" to something i can rely on, making new positions based on trend. if you're a trend or swing type trader and use ToS, go ahead and give it a shot.

full details/definitions/changes are posted in the elite download section here
https://nexusfi.com/download/vip_elite_circle/1244-download.html?view

pls keep this only on nexusfi.com (formerly BMT) and don't share outside. not claiming that i'm a good script developer, but would still like to keep the value of this (whatever it may be) to nexusfi.com (formerly BMT) members only. appreciated,

All the best,
RedK

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  #19 (permalink)
jamusued
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I simply look for higher highs and higher lows and price above 200 day EMA.

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  #20 (permalink)
 
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 RedK 
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great responses .. it encourages me to come back and ask, so how do you measure "Bullishness" for a given timeframe, if you wanted to? I was working on a study back then around this, and thought if I can answer that question, a simple concept that can be used in trading would present itself.

thanks all,
K

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