How to measure the strength of a cross over ? Momentum ?

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  • 03/13/2019 at 10:20 AM #93512
    GraHal
    mancunian wrote:

    which is not an indicator but just a simple number

    Yes I can see your line of thinking, but as this number in this usage is a difference between 2 Indicators and is either – increasing, static or decreasing – then the number in this usage is an Indicator.

    It is an Indicator in this usage because it gives an indication of whether Price is rising, static or falling.

    03/13/2019 at 10:49 AM #93521
    GraHal

    You’ve got me on the same tack now!

    I agree that if the result of the Momentum calculation is a single figure then how does that give a sense of momentum?

    Momentum has to be a comparison one period with another or in relation to time.

     

    03/13/2019 at 11:10 AM #93523
    mancunian

    Thank you.

    Yes I understand that but e.g. two moving averages with values 100 and 90 at a point in time

    MaShort = Average[20]  result =100

    MaLong = Average[50] result =90

    then the difference is 100-90=10 which I understand will change with time and so will indicate what is happening with price just by computing my own simple subtraction without using in built PRT Momentum indicator

    but using the inbuilt function within PRT  “Momentum” surely Momentum(10) is incorrect syntax , calculates and means nothing as 10 is not an indicator but a number?

    The manual gives such an example:

    REM Calculate the short-term ma
    MaShort = Average[20]
    REM Calculate the long-term ma
    MaLong = Average[50]
    REM Determine the relative speed of the short MA to the long MA
    Speed = Momentum(MaLong – MaShort) * 100 / Close

    which surely is wrong?  The manual itself says the parameter for Momentum is an indicator and not a number!

     

    Surely the correct syntax is something like:

    Speed = (Momentum(Average[50]) – Momentum(Average[20])) * 100 / Close

    ?

    I am grateful for assistance as this is clear as mud from the manual and I am keen to measure the strength of cross overs

    03/13/2019 at 11:17 AM #93525
    mancunian

    Note if you want to specify what time periods e.g. 10 for Momentum to use I believe the manual should state

     

    Speed = (Momentum[10](Average[50]) – Momentum[10](Average[20])) * 100 / Close

     

    I do believe the manual is wrong and furthermore Momentum is used incorrectly in pre written built in examples in the platform itself in the Screener for bullish and bearish crossovers which is worrying.

    Maybe I am wrong but I don’t think so – feedback welcome.

    03/13/2019 at 12:04 PM #93529
    GraHal

    Just an idea … have you tried working your definition into an Indicator?

    Does it look logical on a Chart when compared to Price?

    03/13/2019 at 12:22 PM #93531
    mancunian

    Grahal.

    I will try and experiment.

    Maybe the manual is correct as maybe as in my earlier post this is how the calculation is performed:

    speed = MOMENTUM[12](malong–mashort)

    is calculated as

    (malongcurrent – mashortcurrent) -(malong12periodsago-mashort12periodsago)

    i.e. PRT looks up the 2 mavs separately twice at 2 different time points before performing the subtraction rather than just subtracting the 2 values straight away in which case it would be correct and work!

     

     

    1 user thanked author for this post.
    avatar GraHal
    03/13/2019 at 1:20 PM #93534
    GraHal
    mancunian wrote:

    I will try and experiment.

    Often If I don’t understand something rather than spend ages theorising and deliberating, I try and work it into an Auto-System and backtest it on various timeframes on the DJI and also to GRAPH various bits of code.

    It can be quite exciting when I get a fantastic equity curve and I think … I’ve made it! Only to realise that I forgot to add a spread of 4 (if 24 hours trading on DJI).

    Anyway who knows … your definition may be the birth of a new Indicator, and better than PRT Momentum (even if PRT one does prove to be correct? 🙂

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