MetaStock™ Zone Forum & FAQ Artykuły Linki Elliott Waves EasyLanguage™ Zone

A B C D E F G H I J K L M N O P R S T U V W Y Z #

Candle Shadow Support - Resistance
This is a custom - made Formula based on Candlesticks called CANDLE SHADOW
SUPPORT - RESISTANCE (by John D. Kontessis) Based on extensive study of the following books "Japanese Candlestick Charting Techniques", S.Nison, 1991 "Beyond Candlesticks" S.Nison, 1994 "Tehcical Analysis" X.E. Kourouklis, METAPUBLICATIONS (in greek language only) As we all know, one of the most important components of a candlestick is its shadow. A candle's shadow tends to get longer as prices get closer to support-resistance levels, as well as when they reach points of change in Trend (e.g. pullbacks or entry in ranging periods). As prices reach a Support level (or when building a support) the candles' lower shadows get longer. Consequently, as prices reach a Resistance Level (or when building a resistance) the candles' upper shadows get longer. The obvious problem that an analyst faces is that such subtle changes are difficult to discern and evaluate by naked eye only.

This problem can be easily solved by using the following two Formulas in Metastock's Indicator Builder. After Opening the "Indicator Builder", choose "New" and name the Formula :


CandleShadow Resistance

ShadowResistance:=If(OPEN<CLOSE,(HIGH-CLOSE),(HIGH-OPEN));
Mov(ShadowResistance,3,S);

{for not so short-term results, use: Mov(ShadowResistance,10,w)}

 

Now let's build the second Formula: After Opening the "Indicator Builder", choose "New" and name the Formula :

 


CandleShadow Support

ShadowSupport:=If(CLOSE>OPEN,(OPEN-LOW),(CLOSE-LOW));
Mov(ShadowSupport,3,S);
{for not so short-term results, use: Mov(ShadowSupport,10,w)}

 

So far we have built two Formulas, who, after measuring the shadows of the candles in our chart, they "draw" a 3-Day Mov.Average of the size of the shadows (or alternatively a 10day weighted Mov.Average).

The first Formula "CandleShadow Resistance" measures the upper shadow and the second Formula "CandleShadow Support" measures the lower shadow. You can always experiment with the type of Mov.Averages (simple, weighted, exponential etc) and the periods used so as to achieve the best "optical" results. Now let's see these Formulas at work. In an UPTREND : Higher Tops in "CandleShadow Resistance " and simultaneously lower tops in "CandleShadow Support" , state a weakness of the uptrend.(bearish signal). Lower Tops in "CandleShadow Resistance " and simultaneously higher tops in "CandleShadow Support" , state a strength of the uptrend. (bullish signal). In a DOWNTREND : Higher Tops in "CandleShadow Resistance " and simultaneously lower tops in "CandleShadow Support" , state a strength of the downtrend.

(bearish signal). Lower Tops in "CandleShadow Resistance " and simultaneously higher tops in "CandleShadow Support" , state a weakness of the downtrend. (bullish signal). At your disposal for any questions or comments. John D.

Kontessis

http://users.otenet.gr/~kontesis
www.delphi.com/kontessis
http://groups.yahoo.com/group/greekanalysts

Source / From: TOP
http://www.guppytraders.com

Equis and MetaStock® and MetaStock Professional® are registered trademarks of Equis International. Achelis Binary Wave®, The DownLoader®,
Expert Advisor®, OptionScope®, Quotecenter® and Smart Charts® are trademarks of Equis International, a Thomson Reuters company.

TradeStation® Pro, TradeStation® 2000i, OptionStation®, SuperCharts®, PowerEditor® and EasyLanguage®
are registered trademarks of TradeStation Technologies, Inc. Other names and marks referred to are the property of their respective owners.

All information provided on this website is for educational purposes only. Trading involves risk, including possible loss of principal and other losses.

Ten i inne materiały na tej stronie zostały zamieszczone zostały jedynie w celach edukacyjnych, nie ponoszę żadnej odpowiedzialno¶ci za ich stosowanie.

Gra na giełdzie i rynkach walutowych (FOREX) niesie ze sob± ryzyko poważnych strat finansowych!